A new report entitled “North American Midstream Infrastructure through 2035: Leaning into the Headwinds” and conducted by ICF International on behalf of the INGAA Foundation has found that the United States and Canada will require annual average midstream natural gas, crude oil and natural gas liquids midstream infrastructure investment of about $26 billion per year, or $546 billion (real 2015$) total over the 21-year period from 2015 to 2035, a new study finds.
Natural gas infrastructure makes up over 60 percent of the needed energy infrastructure in the report, with total investments of between $290 billion and $376 billion ($333 billion midpoint) required from 2015-2035. Natural gas infrastructure includes gathering and transmission pipelines, compressors, laterals, gas-lease equipment, processing, gas storage and LNG export facilities.
Meanwhile, between $137 billion and $190 billion of crude oil infrastructure (gathering pipeline, lease equipment, mainline pipeline and pumping, storage laterals and storage tanks) and between $43 billion and $55 billion of new NGL infrastructure (transmission pipelines, pumping, fractionation and NGL export facilities) will be required in the next 20 years.
The report also projects $24 billion in capital spending for incremental integrity management and emissions in the natural gas midstream space over the next 20 years. The report’s High and Low Cases project natural gas prices to average below $3 per MMBtu through 2017. In the High Case, Henry Hub gas prices rise to between $4.00 and $5.50 per MMBtu after 2020; the Low Case prices average 15 percent lower than the High Case between 2020 and 2035.
In the High Case, electric load grows at 0.9 percent per year from 2016 to 2020, and at 1.0 percent per year after 2020. In the Low Case, electric load growth increases by only 0.3 percent per year throughout the projection. The report assumes U.S. Gross Domestic Product growth at an average 2.6 percent in the High Case. In the Low Case, U.S. GDP grows at 2 percent per year from 2016 through 2025 and rebounds to 2.6 percent thereafter. ICF assumes oil prices remain depressed through 2017, but rebound with an Asian economic recovery and slower development of North American oil supplies. In each case, oil prices recover to a longer-term price of $75 per barrel, but the pace of recovery is much slower for the Low Case.