Senior Staff Writer
US production from unconventional oil and gas production is driving demand for midstream infrastructure, and more consolidation of midstream companies is likely, the Deloitte Center for Energy Solutions said in a report released Nov. 19 at the 2013 Deloitte Oil & Gas Conference in Houston. Growing midstream infrastructure needs could require more than $200 billion in additional investment by 2035, Deloitte said.
The use of hydraulic fracturing and horizontal drilling pushed US production in 2012 to its highest level in 16 years. Consequently, producers need more pipelines, gathering systems, and processing plants. During 2006-12, midstream companies invested almost twice the amount as they did during 1992-2006, Deloitte said in a report entitled “The rise of the midstream: Shale reinvigorates midstream growth.” Yet despite this rise, producers in the Bakken formation of North Dakota and the South Texas Eagle Ford liquids play still need more midstream services. The US Energy Information Administration estimates 35% of the Bakken natural gas production was flared or otherwise not marketed because of the insufficiency in the infrastructure required to store or transport it. In the Eagle Ford, rail shipments are increasing for lack of enough pipelines to handle production volumes, much of which is now being moved by rail and truck.
Read more: http://www.ogj.com/articles/print/volume-111/issue-11c/general-interest/deloitte-us-shale-production-boosts.html