10,300 MILES OF NEW U.S. TRANSMISSION LINE SEEN

A pipeline industry study predicts 10,300 miles of gas transmission line will be laid in the U.S. during the next 5 years.

Energy & Environmental Analysis Inc., in a study commissioned by the Ingaa Foundation, surveyed North American gas pipeline and storage companies.

It figures the construction projects will cost $12.06 billion in 1993-97, compared with $16.05 billion in 1988-92 when 13,411 miles of gas pipeline were laid.

The study said, "The decline in expenditures can be attributed to the fact that pipeline capacity is coming more in line with current and expected future natural gas demand nationally and regionally, necessitating less capacity expansion."

Canadian construction in 1993-97 will total 1,570 miles, costing $3 billion (Canadian), while Mexico will add 350 miles of pipeline during the same period. That will boost North American construction to 12,200 miles of transmission line during the study period.

Much of the construction related to Mexican gas consumption is expected to take place in the U.S., which will supply much of the incremental load during the next 5 years.

Construction plans represent 4% of the 331,130 miles of gas transmission line in operation in North America at the end of 1992.

U.S. companies will spend $2.22 billion during the next 5 years to increase underground storage, adding working gas capacity of 500 bcf.

"The expected growth in underground storage is due to the changing structure of U.S. gas markets and growing gas demand, particularly for electric Generation, which tends to require more gas storage due to uncertain, fluctuating loads."

Canada is expected to add 13 bcf of storage in 1993-97.

The study noted two major uncertainties facing the gas market.

"A faster than expected growth in gas demand would lead to greater need for transmission and storage capacity than reflected here, while a lower than expected growth in demand would have the opposite effect."

There is regulatory uncertainty due to the Federal Energy Regulatory Commission's orders to unbundle interstate transmission services and allow risk sharing for new construction.

"Critical decisions affecting how much future pipeline and storage capacity will be needed by end users and how it will be paid for are still being resolved."

The survey did not include all companies involved in transmission and storage, and those included did not always have projections for all 5 years, requiring the extrapolation of data.

The Interstate Natural Gas Association of America formed the Ingaa Foundation in 1990 to sponsor research on methods to advance the use of natural gas in North America.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.