Industrial Info Sees Growth in Pipeline Projects in 2017
Years of high oil prices and growing demand for pipelines culminated in strong growth and a slew of new midstream plans in 2014--only for oil prices to crash in 2015 and 2016, dramatically reducing the outlook for new pipeline projects. But this year offers hope that the industry is recovering, as spending and project numbers already have surpassed their levels for all of 2016, according to Industrial Info's project database.
The turnaround can be attributed to the Oil & Gas Pipeline Industry's natural building cycle, which is returning to a period of large-scale, long-haul project proposals. Meanwhile, Industrial Info has been increasing its global coverage of pipeline maintenance activities.
Uncertainty overshadowed the energy markets in 2015, as producers found their ventures to be less than economical amid low oil prices. As a result, production was forecast to decline, stripping away producers' need for new or increased market access, and putting into question the demand for pipeline takeaway capacity. This followed 2014's boom in new pipeline development, with heavy spending and project numbers, due to multiple, large-scale projects plans.
With new pipeline projects garnering little support in 2015, the following year saw even fewer new projects proposed as the market waited for a return to profitable prices. As such, 2016 was a low point, with only $13 billion across 332 new projects proposed.
Early in 2017, oil prices crested at $50 per barrel and several new, large-scale projects were announced in the pipeline industry as confidence blossomed. Plains All American LP (NYSE:PAA) (Houston, Texas) announced it would build an $80 million long-haul loop for its Basin system that would carry Permian Crude oil from Midland, Texas, to Cushing, Oklahoma. For more information, see Industrial Info's project report.
In the natural gas liquids (NGL) sector, a new player, Permico Energia LLC (Houston), announced an ambitious, $2 billion grassroot pipeline plan to carry 175,000 BBL/d of NGL from the Permian Basin and Eagle Ford Shale to Corpus Christi. Kinder Morgan Incorporated (NYSE:KMI) (Houston) announced its $750 million Gulf Coast Express Pipeline Project, which would carry natural gas from Waha, Texas, to Agua Dulce, Texas. For more information, see Industrial Info's reports on the Permico Energia and Kinder Morgan projects.
For more information and updates, please subscribe to the IIR blog.