Oil and gas companies in the United States and Canada will have to invest $641 billion in midstream crude oil, natural gas and natural gas liquids infrastructure through 2035, or roughly $30 million per year, a new report by ICF International has concluded.
The analysis, commissioned by the International Natural Gas Association of America (INGAA) Foundation, estimated that over the past 10 years North America has invested approximately $10 billion per year in such infrastructure. However, as production of crude oil and natural gas continues to soar, investments will have to increase threefold to allow for the adequate transportation of production.
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More than $14 billion annually will have to be allocated to new infrastructure to accommodate natural gas supplies, as well as to link newly developed plays with new facilities and existing infrastructure. Overall, 35,000 miles of new pipelines and 303,000 miles of gas gathering lines will be required, the analysis estimated.
ICF economist and author of the study Kevin Petak commented that the industry was in a period of strong growth and the years through 2020 will be of critical importance in terms of expenditure and investments. The projected level of investments will also be good news for the North American economy. Investments in midstream oil and gas infrastructure will create 432,000 jobs and about $300 billion in tax revenue in the United States and Canada, the report said.