U.S. GAS PIPELINES SHIFT CONSTRUCTION FOCUS

The U.S. gas pipeline industry is changing the focus of its construction efforts. The American Gas Association says efforts are moving away from main line megaprojects toward construction of extensions, laterals, loops, and compression. AGA Pres. Michael Baly, said, "Natural gas pipeline construction during the second half of this decade is likely to take a very different form from that of the first half.

May 22, 1995

2 min read

The U.S. gas pipeline industry is changing the focus of its construction efforts.

The American Gas Association says efforts are moving away from main line megaprojects toward construction of extensions, laterals, loops, and compression.

AGA Pres. Michael Baly, said, "Natural gas pipeline construction during the second half of this decade is likely to take a very different form from that of the first half.

"Construction of long line systems is less likely in the near term because of increasing integration of the interstate pipeline network. The result will be decreasing construction expenditures, reflecting the industry's commitment to be more efficient and cost competitive.

"Pipeline construction will increasingly encompass projects such as main line extensions and lateral facilities to access specific customers. The additional capacity needed to keep pace with continuing increases in natural gas demand will come from construction of pipeline looping, increased compression, and addition of storage facilities."

AGA said the shift in focus will lead to further declines in pipeline construction outlays through at least 1996. Spending was projected at $3.4 billion in 1994, $2.9 billion in 1995, and $1.2 billion in 1996.

Baly said, "Although it appears the industry's pipeline construction expenditures have peaked for now, our significant investment in the system during the last 5 years to construct new facilities, along with development of more efficient uses of the pipeline and storage system, is helping to bring about increases in natural gas deliverability that will continue for the remainder of the decade and into the next century."

U.S. gas pipeline construction projects totaling more than $6.1 billion were proposed, under way, or completed in 1994.

AGA identified 18 storage projects that were placed into service during 1994, representing 130 bcf of additional working gas capacity.