Douglas-Westwood has recently inaugurated its North American Pipeline Database Service (PDS). The PDS identifies $22 billion worth of pipeline spend for the construction of over 23,000 miles of pipeline between 2014 and 2020.
Some highlights from our Q3 quarterly update: Spectra Energy’s $1.2 billion New York-New Jersey Line, the first natural gas transmission pipeline to be built in Manhattan in 40 years, was placed in service in November. The line was running at capacity within one day of operation, and is expected to substantially lower energy costs in New York and New Jersey. Enbridge’s Flanagan South is under construction, intended to relieve the Cushing crude oil glut. Similar projects include TransCanada’s Gulf Coast Pipeline and the twinning of the Seaway Pipeline owned by Enbridge and Enterprise Products Partners. Many companies have additionally chosen to reverse existing pipelines to divert crude that would otherwise flow to Cushing. Magellan Midstream, for instance, reversed a segment of its Longhorn Pipeline earlier this year, and is already planning on spending $55 million for a 50,000 bpd expansion of the line by 2014. Such projects had been responsible for plummeting inventory levels at the Cushing Hub since May of this year. But even more may be required: US shale oil saw fantastic production growth since late summer, and stocks there are once again on the rise.
No less striking is growth in the Marcellus, which has risen to 18% of US dry gas production. On paper, its share could rise to 25% by 2017, an increase of 6 Bcf / day from current levels. On top of this comes the Utica, which pipeline operators are now treating as a play with Marcellus-scale potential.
The pipeline construction business has some good times ahead.
Neha Rustagi, Douglas-Westwood New York
+1 (212) 786 7509 or Neha.Rustagi@douglaswestwood.com