In the oily Bakken shale play in northwest North Dakota, various new projects are planned to find alternatives to moving liquids by truck, driven by economics as well as civic concerns about road damage. The effort is also a preventative measure to the challenges of harsh winters, which have limited trucking to alarming degrees in the past.
Many projects are new railway facilities, critically needed while construction of new pipeline take-away capacity is under way.
In the Rocky Mountains, new infrastructure is needed to move increased oil, gas and liquids production to market.
In fact, Hart Energy is putting together a new midstream conference, to be held in Denver, Colorado, in early November of this year, specifically to address those issues for producers and midstreamers who need to coordinate with one another to avoid over-or under-capacity issues. Stay tuned to Midstream Business as we move forward with that event.
In Texas, the Eagle Ford shale play continues to please producers, but all infrastructures, from pipelines to storage and Cushing, continue to worry those managers looking for profitable markets for their products.
In the northeast, gas production abounds as drillers continue to process wet gas from the Marcellus shale play to take advantage of natural gas liquids (NGLs) linked to nicely priced oil. Also, many producers continue to drill in the dry-gas areas to hold leases. Additionally, the Utica play is beginning to ramp up, and new processing capacity plans are under way there.
This era of change is being repeated in most of the nation's shale plays as production of oil, NGLs and gas continues to outpace the development of midstream infrastructure.
Increasingly, many exploration and production operators are getting involved in take-away infrastructure. See "Great Expectations" in this issue for further information on their thinking.
According to recent reports by industry insiders, some producers are "pretty aggressively" building their own midstream infrastructure as an attempt to avoid existing or potential bottlenecks. At some point, the industry can expect to see systems put on the A&D market, once production is flowing.
From a cost-of-capital standpoint, the self-buildouts are advantageous to own through MLPs, such as those formed by Chesapeake Energy Corp. and Anadarko Petroleum Corp..
The $300-billion in investments in an unprecedented midstream infrastructure building boom has the potential to produce thousands of jobs during the next two decades as the flow of U.S. energy from unconventional resource plays continues.
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