Bulktransporter 463 Mg4204

Infrastructure issues could interrupt oil & gas production

May 6, 2014

As US oil and natural gas production continues increasing and shows no signs of abating in the near future, several recent examples demonstrate how existing infrastructure is being pushed to its limits--primarily in the pipelines and terminals sectors.

At the end of March, Industrial Info's North American Project Spending Index showed planned 2014 project starts of $8.03 billion in the terminals Industry and $27.25 billion in the pipeline sector, an increase of 10.8% and 42.9%, respectively, from the corresponding period of 2013, demonstrating the increasing need for new capital projects in these sectors.

Some of the most discussed examples of the shortcomings of infrastructure include the high amount of natural gas flaring in North Dakota, which burned off approximately 36% of 1.06 billion cubic feet per day of natural gas production in February; and tightening crude oil storage capacity in the Gulf Coast region as the bottleneck at the Cushing OK oil hub is eased.