Association lowers oil and gas midstream infrastructure investment projections

In a new report, INGAA sees $4 billion less spent per year over the next 20 years.

By Bob Vavra April 20, 2016

The decline in global oil and natural gas prices have caused the Interstate Natural Gas Association of America (INGAA) to revise its investment projects downward for midstream infrastructure over the next 20 years.

While the INGAA expects $26 billion in annual infrastructure investment over the period concluding in 2035, that is a $4 billion annual decrease than its 2014 report, or $80 billion less over the 20-year projection. The 2016 report, "North American Midstream Infrastructure through 2035: Leaning Into The Headwinds" reflects the industry challenges over the past two years.

"We saw a need to reexamine infrastructure needs in light of significantly lower commodity prices," said INGAA President Don Santa in a press release. "While E&P activity may dip temporarily because of lower prices, we still will need significant capital investment, particularly in natural gas midstream infrastructure."

The report found that 60% of the infrastructure upgrades would need to occur in the natural gas sector, which includes gathering and transmission pipelines, compressors, laterals, gas-lease equipment, processing, gas storage, and liquified natural gas (LNG) export facilities.

The report noted that the rest would be split between crude oil infrastructure and natural gas liquid (NGL) needs.

Another telling sign for the industry is that the INGAA’s report includes two scenarios for the market’s recovery. Both are based on a return to $75/bbl oil prices, but the best-case scenario has that occurring by 2017 thanks to the growth in Asia and slowing U.S. supplies, while the other scenario has that recovery going "much slower," according to the report.

Despite the report’s expectation of a slower rebound in the market, the INGAA is putting an optimistic face on the data, noting the infrastructure improvements that would take place would add up to $861 billion in value in the U.S. and Canada and create as many as 425,000 jobs, primarily in midstream operations in the Southwest and Northeast of the U.S. and in Canada.

"This report shows a vibrant natural gas market in the future, and this creates the need for additional midstream infrastructure to deliver affordable natural to consumers," Santa said in a press release. "The good news is that the natural gas industry has a proven track record of constructing and financing this level of infrastructure."

To view the full report, go to the INGAA Website at

Original content can be found at Oil and Gas Engineering.

Author Bio: Bob is the Content Manager for Plant Engineering.