Investments In Natural Gas Infrastructure Needed To Meet Projected Growth

January 2010 Vol. 65 No. 1

Projected growth in North American natural gas supplies and market growth in the U.S. and Canada will require billions of dollars of additional investment in pipeline, storage and other midstream infrastructure through 2030, according to a new study released by the INGAA Foundation Inc.

The Natural Gas Pipeline and Storage Infrastructure Projections Through 2030 study anticipates a $133 to $210 billion investment in infrastructure over the next 20 years (between $6 and $10 billion per year), primarily to attach increased domestic natural gas production from unconventional shale basins and tight sands to the existing pipeline network. Anticipated market growth from the electric generation and industrial sectors as well as the potential to connect vast Arctic resources and LNG supplies to the grid also will be key drivers for additional investment, according to the study.

“The domestic supply picture for natural gas has been redrawn and experts agree we now have more than 100 years of technically recoverable gas in the U.S. and Canada,” said Gary Sypolt, chairman of the INGAA Foundation. “This study spotlights what this sea change in domestic supply will mean for investment in additional pipeline, storage and midstream infrastructure.”

The study projects that by 2030, the U.S. and Canada will need approximately 29,000 to 62,000 miles of additional natural gas pipelines and 370 to 600 billion cubic feet of additional storage capacity, in order to accommodate market requirements. Insufficient infrastructure development could lead to price volatility, reduced economic growth and diminished delivery of gas supply to consumers who need it most.

Other infrastructure needed from 2009 to 2030:

  • 6.6 to 11.6 million horsepower of new gas transmission pipeline compression;
  • 15,000 to 26,000 miles of new gathering pipelines;
  • 20 to 38 Bcf per day of new natural gas processing capacity; and
  • 3.5 Bcf per day of new LNG import terminal capacity.

The complete study prepared for the INGAA Foundation by ICF International can be accessed at http://www.ingaa.org/cms/31/7306/7828.aspx.