Pipeline Outlook: Studies Indicate Strong Years Ahead

January 2011 Vol. 66 No. 1

The study finds the U.S. and Canada will need 28,900-61,600 miles of additional natural gas pipelines through 2030. New infrastructure will be needed throughout the U.S. and Canada and not just to move natural gas across long distances between regions. According to the study, all regions will need natural gas infrastructure to serve growing demand and/or shifts in demand. Even regions with mature production basins will continuously need additional development.
North America accounts for 19,260 miles of planned pipeline miles and 8,839 miles of pipelines under construction. More than 4,600 miles of the planned pipelines represent projects in Alaska and Canada. They include the 364-mile Beluga to Fairbanks (B2F) gas pipeline that calls for a 24-inch line extending from Cook Inlet to Delta Junction and a 12-inch line from Delta Junction to Fairbanks. The project will be a spur pipeline to a major Alaska natural gas pipeline, when one is built, to move gas into south-central Alaska markets, with a connection at Delta Junction or Glenmallen.

2020 for Alaska
Although both of the Alaska natural gas pipeline projects planned by TransCanada and ExxonMobil and BP/Conoco Phillips (Denali) have held open seasons, neither is expected to begin service until around 2020.

Another project involves a 700-mile NGL pipeline planned in Texas by DCP Midstream. The route of the DCP Sandhill Pipeline runs from West Texas fractionation and storage sites along the Texas Gulf Coast including Mont Belvieu.

DCP says this system should relieve capacity constraints affecting producers in these regions. The DCP Sandhills Pipeline, with an estimated 2013 in-service date, will have a target capacity of 130,000 bpd.

As to construction activity, the most significant North American construction project is TransCanada’s U.S.-Canada cross border Keystone XL Gulf Coast Expansion Project. The route of the 1,661-mile, 36-inch crude oil pipeline begins at Hardisty, Alberta and extends southeast through Saskatchewan, Montana, South Dakota and Nebraska. It incorporates a portion of the Keystone Pipeline (Phase II) through Nebraska and Kansas to serve markets at Cushing, OK before continuing through Oklahoma to a delivery point near existing terminals in Nederland, TX to serve the Port Arthur, TX marketplace.

The $7 billion Keystone XL Expansion is scheduled to begin operations in 2012.