Predicted growth puts the focus on pipeline expansion
HOUSTON—A new study suggests that Texas will require more than 10,000 miles of new pipeline infrastructure in the next 30-plus years to achieve its full potential for gas and oil production.
Research published by IHS Markit predicts that gas production from three major producing regions in the state—the Permian Basin, the Eagle Ford Shale and the Barnett Shale—will peak from 2030 to 2040 at just under 35 billion cubic feet per day. However, this projected growth is contingent on a pipeline infrastructure with the capacity to handle it, something that does not currently exist.
Todd Staples, president of the Texas Oil and Gas Association, said much of the new infrastructure construction will need to take place coming out of the Permian Basin, driven by the expected growth of crude oil production, as well as the additional natural gas and natural gas liquids production associated with it. The study forecasts that Permian natural gas production will increase to approximately 24 Bcf/d by 2030, while Permian NGL production is expected to expand to almost 2.2 million barrels per day by 2040.
Most of the natural gas produced in Texas is associated gas from oil fields, suggesting that the largest portion of any new pipeline project would be devoted to oil. In fact, the study notes that oil pipelines could account for 47 percent of the total capacity. Twenty-nine percent would carry natural gas, while the remaining 24 percent would be used for NGL.
Along with the pipeline infrastructure required to transport oil, gas and NGLs from the Permian Basin, additional infrastructure will be required on the other end of the pipe, particularly along the Gulf Coast, Staples said. “You’re going to have to have a volume of infrastructure to meet the needs of the growing manufacturing sector,” he pointed out.
That will mean new or expanded processing plants and refineries, as well as ports capable of supporting the transport of these products around the world.