Poll Results Expose Risks to Natural Gas Pipeline Projects
Midstream operators and their upstream customers are counting on new natural gas pipeline capacity to reach markets, but several risks threaten project completion. The Permian region is expected to see a significant increase in takeaway capacity with projects like Energy Transfer's Hugh Brinson and WhiteWater's Blackcomb pipeline adding over 5 bcfd by late 2026. However, pipeline construction costs have hit record levels, FERC's permitting reforms are still being implemented, and capital markets remain cautious.
Oil & Gas Journal polled its readers to gauge the biggest risk to project completion in the next 24 months. The poll found that 40% of respondents identified permitting delays as the largest risk, even with FERC streamlining efforts underway. A smaller percentage (27%) cited a potential crude oil price drop reducing associated gas volumes as the main concern.
The risk of steel and material cost inflation eroding project economics was also a significant concern for 20% of respondents. Tightening of finance terms was seen as the biggest risk by 13%. The poll was evenly split between financial services/capital providers and those in consulting roles.