Spurred on by production from prolific unconventional shale basins and tight sands, as well as anticipated market growth from electric generation and industrial sectors, as much as $210 billion in investment in pipelines, storage and midstream infrastructure will be required over the next two decades to meet long-term supply and demand needs, a new INGAA Foundation report estimates.
The study, which was released Tuesday, expects natural gas infrastructure investment requirements to range from $133 billion to $210 billion over the next 20 years, primarily to attach increased domestic gas production from expanding shale plays and tight sands to the existing pipeline network. Anticipated market growth from power generation and industrial customers, as well as the potential to connect vast Arctic resources and liquefied natural gas (LNG) supplies to the grid, also will be key drivers for addition investment, it said.
By 2030, the United States and Canada will need approximately 29,000 to 62,000 miles of additional gas pipeline and 370-600 Bcf of incremental storage capacity in order to accommodate market requirements, according to the foundation’s “Natural Gas Pipeline and Storage Infrastructure Projections Through 2030” study. The majority of storage capacity additions are projected to be high-deliverability salt cavern storage, which would essentially double current capacity, the study said.
The INGAA Foundation report also sees interregional pipeline capacity growing significantly in the years ahead. Pipeline capacity between major areas throughout the U.S. and Canada currently is 130 Bcf/d. The study sees this interregional transport capacity increasing between 21 Bcf/d and 37 Bcf/d, driving development of additional pipeline and storage capacity.
Interregional natural gas transport capacity will be needed even without a growing North American gas market due to shifts in the location of gas production, according to the study.
Aside from pipeline and storage facilities, other infrastructure requirements will include 6.6-11.6 million hp of new pipeline compression by 2030; 15,000 to 26,000 miles of new gathering pipelines; 20-38 Bcf/d of new natural gas processing capacity; and 3.5 Bcf/d of additional LNG terminal capacity, it noted.
“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, which was formed by the Interstate Natural Gas Association of America (INGAA), which represents interstate gas pipelines.
“Under virtually any market scenario for natural gas, significant and continuous investment in additional infrastructure will be required over the next two decades as a result of shifting supply dynamics — creating and sustaining thousands of jobs in the process,” said INGAA President Donald F. Santa.
Under the study’s base case projection, annual gas consumption in the U.S. and Canada is projected to grow 18% to 31.8 Tcf by 2030 from about 26.8 Tcf now. Approximately three-fourths of the market growth will come in the power sector, the study said. It noted that the gas demand by the power generation sector will largely determine the rate of growth in the entire gas market.
The entire study can be accessed at www.ingaa.org/cms/31/7306/7828.aspx.
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