Proposed pipeline spending activity for the oil and gas industry in 2007 is estimated to be nearly $11.3 billion, according to research by Industrial Info Resources, a marketing information service company.
The projects scheduled to start construction include the transportation of natural gas, crude oil, refined products, NGL’s and other products.
According to the analysis, the spending is spread across 93 pipeline related projects, with an average capital value of $120 million.
This level of proposed spending, the highest seen to date in the U.S., is more than double the $5.62 billion in pipeline proposals scheduled to begin construction in 2006.
Industrial Info Resources reports that most of the proposed capital spending will take place in the Rocky Mountain Region, with expenditures of almost $5.7 billion. Most of this activity is designed to export increasing natural gas production in the region to markets in the Midwest and the Northeast.
Proposed capital spending on pipelines in other regions includes the Great Lakes with $1.17 billion, the Midwest with $1.1 billion, the Northeast with $1 billion, and the Southwest with $963 million.
Due to the increase in pipeline proposals, there is a growing trend for pipeline owners to sign engineering, design, environmental and construction contracts earlier than usual. Pipeline companies are trying to get contracts signed earlier to avoid the possibility of not being able to start projects because these services are not available.
Some companies, who are proposing projects as late as 2008 and 2009, have already chosen engineering and E+P+C capable firms. If the economy proceeds at a steady pace, this trend will continue well into the future, according to the Oil & Gas Pipeline project analysis.