Permian Gas Wave Sparks Biggest Pipeline Buildout Since the Shale Boom
Growing domestic and export demand for Permian’s natural gas is pushing pipeline developers to invest in new pipeline capacity in the U.S. Gulf Coast.
Chemical and manufacturing industries and data centers looking for reliable energy supply drive increased domestic consumption, while the booming LNG exports from the Texas and Louisiana coasts, and at least half a dozen new export plants expected to start up by the end of the decade, are prompting new-built or expanded links to feed gas to the LNG facilities.
With a favorable in-state regulatory landscape in both Texas and Louisiana, and with the Trump Administration supporting the U.S. energy dominance, it’s no surprise that many projects for new or expanded pipelines are on track to enter into service in the coming months.
Next year, a total of 12 projects for new or expanded gas pipelines are set to be completed in Texas, Louisiana, and Oklahoma. These projects are set to boost the U.S. Gulf Coast region’s capacity to transport natural gas by 13%, per data compiled by Bloomberg on the basis of EIA estimates.
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That would be the biggest expansion of pipeline capacity in one year since the dawn of the shale gas boom in 2008.
There has never been a better time to be in the business of building natural gas pipelines in the United States, executives at pipeline giants say.
U.S. natural gas supply is rising, domestic and export demand is soaring, and the U.S. federal regulatory landscape has shifted dramatically in favor of new oil and gas infrastructure projects.
Companies have committed $50 billion worth of investments in new gas pipelines that would add 8,800 miles of new pipeline in the United States, energy consultants Wood Mackenzie say.
Unlike in previous cycles of massive gas pipeline expansions, when producers led pipeline investment to reach demand markets, this time the buildout is being led by LNG exporters, utilities, and data centers, WoodMac noted.
In the past, “Pipeline development was the unsung hero connecting low-cost resources to markets,” the energy consulting firm says.
“Now we're seeing a fundamental shift: demand pull from LNG exporters and power companies is driving new pipeline investment, moving away from the traditional producer-led model.”
U.S. LNG exports are surging to record highs, with more export projects expected to start up by the end of the decade.
America’s electricity demand is also soaring, thanks to the onshoring of manufacturing and the sky-high energy consumption of data centers.
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