In this episode of the Pipeline Technology Podcast, Mike Reed, editor-in-chief of Pipeline & Gas Journal, joins to discuss the 2024 construction outlook for pipelines.

Emphasizing the ongoing significance of LNG projects, particularly in the Permian and Haynesville regions, Reed provides specific details on major projects like the Rio Bravo Pipeline and ADCC pipeline.

The conversation extends to developments in Mexico, challenges faced by projects like Tellurian, the rise of carbon capture projects, and the growing interest in hydrogen projects, notably in Europe. The episode also touches on Canada’s energy infrastructure, global scenarios, and the substantial pipeline infrastructure build-out in the Asia Pacific region, particularly in India.

2024 Construction Outlook Show Notes, Links, and Insider Terms

• Michael Reed is the Editor-in-Chief of Pipeline & Gas Journal (PGJ). Connect with Michael on LinkedIn.
• Pipeline & Gas Journal is the essential resource for technology, industry information, and analytical trends in the midstream oil and gas industry.  For more information on how to become a subscriber, visit pgjonline.com/subscribe.
• Liquefied Natural Gas (LNG) is natural gas that has been cooled to a liquid state (liquefied), at about -260° Fahrenheit, for shipping and storage. The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state in a natural gas pipeline.
• FERC (Federal Energy Regulatory Commission) regulates, monitors, and investigates electricity, natural gas, hydropower, oil matters, natural gas pipelines, LNG terminals, hydroelectric dams, electric transmission, energy markets, and pricing.
• Hydrogen Gas is a clean energy carrier that can be used to store, move, and deliver energy produced from other sources. Hydrogen can be produced from a variety of domestic resources, such as natural gas, nuclear power, biomass, and renewable power like solar and wind. These qualities make it an attractive fuel option for transportation and electricity generation applications. It can be used in cars, in houses, for portable power, and in many more applications.
• Global Construction Outlook 2024

2024 Construction Outlook Full Episode Transcript

Announcer: The “Pipeline Technology Podcast,” brought to you by “Pipeline & Gas Journal,” the decision making resource for pipeline and midstream professionals. Now your host, Russel Treat.

Russel Treat: Welcome to the Pipeline Technology Podcast, episode 41.

On this episode, our guest is Mike Reed, editor of the Pipeline & Gas Journal. We’ll talk to Mike about the January 2024 Pipeline & Gas Journal article entitled “The 2024 Construction Outlook.” Mike, welcome back to the Pipeline Technology Podcast.

Mike Reed: Hey, Russel, thanks for having me. It’s good to be here again.

Russel: I’ve asked you to come on and talk about the construction outlook. Before we go there, maybe you could remind the listeners who you are and what you do.

Mike: Yes. My name is Mike Reed. I’m the Editor-in-Chief of Pipeline and Gas Journal. What we do and what I do is basically keep track of pipeline projects, things that might lead to pipeline projects, and infrastructure related to pipelines. Basically, pipelines are what we do.

Russel: All things newsworthy and informational about pipelines.

Mike: That’s right.

Russel: Great. Let’s just dive right in. What is hot in North America around pipeline construction in 2024?

Mike: Well, to start off, and I don’t want to sound like a broken record, but similar to the last couple of years, in that a large part of midstream work is still revolving around LNG activities. US projects are moving gas to the Gulf Coasts to supply liquefaction plants, and similarly in Europe to support entry points so they can produce some LNG.

In support of that, much of the US activity, this has been the case even before the war in Ukraine, is taking place in the Permian and Haynesville.

Chief among those reasons, I guess are pretty obvious to people in the industry, is that the access to the facilities, which are in Texas and Louisiana, not only are they easily accessible or as easily as you’re going to get, but they don’t require crossing state borders.

The two states involved have been pipeline friendly for years. Not crossing state borders certainly simplifies the permitting process for both pipelines and infrastructure related.

Russel: Certainly, both Louisiana and Texas, where most of this activity is occurring, are oil and gas and pipeline friendly.

Mike: Exactly.

Russel: More-so than some other parts of the country, so there’s a lot of activity there. Are there any specific projects of note that ought to be talked about?

Mike: Yes. Here’s something interesting. It was only a couple of weeks ago. EIA released some figures that showed there are currently 20 billion cubic feet a day of natural gas capacity under construction, partly completed, or approved for delivery of natural gas.

This is just to five US LNG export terminals that are currently under construction. Each of those has at least one or more pipelines currently being developed. Those would be the Plaquemine in Louisiana, Golden Pass, one in Port Arthur, I think the Corpus Christi Stage 3, and Rio Grande also, specifically related to that capacity I mentioned that we’ve already spoken about.

Rio Bravo Pipeline, which is being constructed of two 138 mile pipelines with a combined capacity of 4.5 Bcf/d to deliver natural gas from the Agua Dulce supply area to Rio Grande LNG terminal in Brownsville would be one, a fairly big one.

WhiteWater Midstream is building ADCC, which is a 40 mile pipeline with capacity of 1.7 Bcf/d. It’s scheduled to deliver natural gas to Corpus Christi Stage 3. That one originates at the end of the Whistler Pipeline near Agua Dulce hub in Nueces County, Texas. That would be in the Eagle Ford region.

There’s about seven or eight others. In Louisiana, for example, there’s the East Texas Transmission Venice Extension Project. It only extends 3 miles of pipe, but it boosts capacity by 1.3 Bcf/d. This replaces an older segment, and delivers gas to the Plaquemine LNG terminal.

Russel: You’re listing a lot of specifics here, Mike. I guess the key takeaway for all of this is between the Haynesville, the Permian, and the Eagle Ford…You’re basically drawing an arc from northwest Louisiana straight west to the Texas New Mexico border, and then straight south to a little east of El Paso, in that arc?

Mike: Right.

Russel: There’s a lot of natural gas, and there’s a lot of pipelines being built either to move new gas to market or to debottleneck some of that infrastructure in order to get gas to these LNG plants?

Mike: Right. Some of the stuff I just went over is a lot more understandable in writing. Like I said, there are 10, maybe 12 that I’m aware of that should be coming online within a year or two at the least, and they’re pretty solid projects. That’s basically what’s going on at the moment.

Russel: I would say they have a high likelihood of getting done because you’re not hearing about them in the national media.

Mike: Exactly. That is exactly right. They’re solid companies, they’re solid projects, and they will most likely get done.

Russel: What about new LNG plants? What’s the outlook for that?

Mike: At the moment – I’m trying to think of the name of it – Haynesville, for example, one major project is the DT Midstream. That’s three stages. It’s being done by Louisiana Energy Access Pipeline expansion.

The existing LEAP gathering lateral pipeline is 155 miles, probably about 1 Bcf/d. What they’re doing with that one is, I think they’re going to get 80 percent or 90 percent of that through compression and things like that. The expansion will be 1.9 Bcf/d.

Stage 1 is expected to be in service at the end of this year. Stage 2, the first quarter of next year. I think Stage 3 is the third quarter of next year. That’s a pretty good size project.

Momentum is currently developing the New Generation Gas Gathering Project, which involves a fairly substantial pipeline, 275 miles, in excess of two Bcf/d. That is expected to be completed in 2024.

Russel: I know that there is activity going on in Mexico as well, and that there are pipelines being planned to get the gas from the US to some LNG facilities in Mexico. Isn’t the west coast of Mexico providing gas to the Pacific more so than the east coast of Mexico?

Mike: Yeah, it is. Here’s something that’s fairly recent, at least as far as any news about it.

We got word last December that Grupo Carso S.A.B through its subsidiary, Gasoducto Centauro del Norte – pardon my Spanish, or lack of it – signed with the CFE to develop and build a gas pipeline in the north of Mexico. This is pretty substantial because the pipeline is said to probably require a length of 260 miles. That’s a relatively new development.

I think the biggest potential new project is the Saguaro Connector Pipeline. The pipeline will deliver natural gas to Mexico’s Pacific coast, which is in development. They’re saying that would be about a 14 mtpa facility on the Gulf of the California side. Yeah, there are a few being developed in Mexico as well.

Russel: What’s interesting in the things we’re talking about is we’re not talking particularly about Tellurian, which is hard to forecast with all the difficulties they’ve had in terms of getting their funding to do their construction. I guess your outlook’s not really considering that as a project that you would expect to see completed?

Mike: It’s tricky. I don’t want to just come out and say I don’t really expect it to be completed, but there’s a little more hesitancy for the market to accept that one right now.

Russel: That’s probably a fair way to say it. Certainly, they have an excellent team put together and they’ve got a lot going on, but there’s been more challenges for them and a lot of changes going on.

Mike: Exactly.

Russel: As compared to how some others are executing projects, they’re in a different place.

Mike: Sure.

Russel: I wanted to point out that that’s one we didn’t talk about. There’s lots of other stuff that’s still being looked at and potentially planned that we hadn’t talked about. What other things beyond LNG are going to affect the picture for North America?

Mike: There’s a good amount of interest in carbon capture. There was an interesting development in the D J Basin recently concerning CO₂ pipelines.

Tallgrass Energy’s Trailblazer Pipeline Company announced that it’s going to progress with its plans to transport. The company recently received a FERC permit granting its permission to convert its 400 mile Trailblazer natural gas pipeline to CO₂ pipeline.

There are plans to ship CO₂ from the Archer Daniels Midland Company corn processing plant in Nebraska, through Colorado Tallgrass, as permanent underground storage in Wyoming. They expect to be online this year and to be able to transport more than 10 mtpa. I think I will see more projects along those lines.

To take a look at it a little differently though, there’s, I feel, a key difference between conversion projects like this versus building pipelines. In the Midwest, plans to build major greenfield CO₂ pipelines have not fared anywhere near this well. A couple of Navigator CO₂ ventures recently threw in the towel on a 1,300 mile project which would have crossed five states.

I’d like to point to that one for a moment. There have been a couple that seem to be progressing pretty well, although slowly. I think that most of the problem here has to do with landowners, particularly farm country type landowners who are not happy with the mention of eminent domain orders.

For something this long, this many states, I don’t feel like this type of project is as feasible as a shorter project that stores the commodity closer to home.

Russel: I would definitely agree with you about that. I did a prediction episode and I talked about CO₂, and that’s exactly what I said. I don’t think you’re going to see projects at scale get approved. I also think you’re going to have a hard time getting anything that’s much new construction for CO₂ approved.

Taking and repurposing existing infrastructure, some of those may have some success. That, in my opinion, remains to be seen. It’s not the technology that’s the issue. It’s the public acceptance of the projects, getting them permitted.

Mike: The word “pipeline” always has a problem, unfortunately.

When you throw in terms like “eminent domain,” to the extent that it has political support within some of these areas where farmland can make some money off of this, but where the farmers are coming out in opposition, as are the local people, the political support you might be getting from some elected officials, that evaporates pretty quickly when they look around and see they’re not going to be getting re elected.

Russel: That’s right. Public opinion matters for sure in this domain.

Mike: Right. I think within a shorter distance, storage within the state, and keeping the whole project within the state, is a lot more likely to succeed.

Russel: What about on the liquid front? Are we seeing anything on the liquid front in North America, projects of note?

Mike: Russel, on that point, nothing’s coming to mind of note that hasn’t been out there for a while and is experiencing the types of problems it’s been experiencing for a while. I would have to go with no, unfortunately.

Russel: Maybe it’s a bit of an unfair question, Mike, because that’s my take as well. I’m not hearing about anything new. I do think that, to our point earlier, the projects that are getting less press are the ones that are more likely to get done.

Mike: Exactly.

Russel: I don’t know how you do that and do anything of size. That’s certainly a challenge.

I want to talk a little bit about hydrogen, as well. There’s a whole lot of conversation about hydrogen that’s gone on in the last year, particularly about hydrogen blending. Is there anything going on in the hydrogen domain related to new pipeline infrastructure?

Mike: That remains primarily in Europe, and something fairly recently out of Germany. Germany, as with the other EU countries, hydrogen engine has just been transported almost exclusively as compressed gas through special pressure containers on trucks.

Usually, for those interested in this kind of thing, they’re pressurized at 200 and 300 bar. There has been a major step taken in order to have what they’re calling “an efficient H2 infrastructure” in place by 2032.

PTJ has been told by folks with the Association of Transmission System Operators there, which is an industry association, that a recently published draft for the German hydrogen core network would include – what is it? – over 6,000 miles of pipeline, which I believe is 9,700 kilometers.

This would amount to, they are saying, 60 percent of these pipelines being newly built pipes and 40 percent repurposed. When I thought about this thing a couple of years…a year or two ago, I was under the impression that the number would probably end up being a lot more repurposed in this, so that’s potentially some pretty big news for hydrogen.

Russel: That’s big, and I think too, the nature of the regulatory environment in Europe is quite different. They have more ability to get projects done, although they have a lot more regulatory oversight on those projects as they’re done, as compared to the US for people.

Mike: Right. When they get to the point of doing something like this, there’s usually a national mandate behind it.

Russel: Exactly. That’s interesting. It’ll be interesting to see how that plays out and how those projects prove up. It would be very interesting.

Mike: In Europe, they are building out a fair amount to get their LNG shipped after it shows up at export terminals. That isn’t so specific to pipelines, but it points to the fact that there is demand for gas to be converted to LNG.

Russel: Yeah, certainly. It’s driving a lot of projects in the US to get gas to LNG facilities, than it’s driving projects, particularly in Europe, to get gas gasified and distributed to end users. It’s interesting. That’s something that we’ve been predicting for a couple of years and it’s certainly playing out, and accelerating if anything.

Mike: From ’22 to ’23, Europe has had, and I think more than 44 percent increase, just in LNG regasification capacity, which is a pretty staggering amount.

Russel: I would concur. What about the rest of the world? What major projects of note are going on elsewhere?

Mike: Our neighbors to the north, Canada, had some developments. One of the biggest positives for energy infrastructure going forward in Canada is that the First Nations are beginning to embrace economic opportunities the pipelines and export projects can offer. That’s been a fairly large boost, I believe.

The Coastal GasLink project which involves, as pretty much everybody knows, 48 inch 400 mile plus pipeline, the word on it is scheduled to start shipping sometime this year. Things probably look good for the Trans Mountain Pipeline, but probably not on the schedule it anticipated.

They had been talking about March of 2024 to begin shipping, but they’ve had some issue involving construction and they want to use a smaller dynamic diameter pipeline for about a 1.5 mile portion of the rail. It’s been rejected by Canadian regulators, and the company last I heard had said that could potentially push the project back for two years. That’s what I’m seeing in Canada.

Africa, in the Middle East, also, the projects basically are continuing to languish for the most part. Africa, for example, reports…our total, our data shows that Africa was looking at 15,000, closer to 16,000 miles of pipelines is planned for Africa, but in contrast to that, only about 2,800 miles of pipeline are currently under construction.

The biggest to that is the almost 900 mile East African crude oil pipeline, which is scheduled to come online in 2025. I personally have my doubts about that. Probably the most active places are in the Asia Pacific. That would be in large part due to infrastructure being built in China and India.

In particular, India is seeing an enormous pipeline infrastructure build out as their economy strengthens, or at least that part of the economy strengthens. They’re projecting a six to seven percent increase in the next year. They have in excess of 13,000 miles of pipeline currently planned, including major gasification efforts.

Russel: If you were going ask me the question, “Where’s the biggest opportunity for energy businesses in the next 25 years?” I would say, India.

Mike: I think so, too. They’ve got a few things to get squared away, but as opposed to other regions, yes. There’s some potential for Africa, but the stability of the governments puts off…If you start talking about major infrastructure that takes four or five years to get going and the government is shaky, that’s a lot of money to put forward without that much guarantee.

Russel: You’re exactly right. If you think about the African continent and India, you’re talking about relatively the same amount of geography, order of magnitude wise. You’re talking about a much larger population in India than in Africa. You’re talking about better governance in India than Africa. Africa’s a bunch of individual nation states, where India’s a single nation state.

India is working hard to modernize its economy, much like China was 15-20 years ago. If I were going to make a 25 year bet, that’s where I’d put my chips.

Mike: India is still working pretty hard to modernize just gas distribution to the extent that some of what they have isn’t in very good shape. That’s a lot of work. A lot of people live there, as you said.

Russel: It’s a big place. It’s a very big place. Mike, anything else you want to add to this conversation before we start to wrap up?

Mike: Not so much. I would just say, for more specifics, catch our article, which probably explains things in a more coherent manner than I just did. No, that’s probably about it.

Russel: The article’s in the January edition of Pipeline & Gas Journal, correct?

Mike: It is in the January edition.

Russel: Awesome. I would encourage anybody who’s interested to go there to read because there’s a lot of specific details that, Mike, like you said earlier, it’s easier to capture that in writing sometimes than in a conversation.

Mike: It is, and there’s diagrams. I can’t really show anybody a diagram right now.

Russel: This is an audio podcast, so we do have certain limitations.

Mike: Exactly.

Russel: I appreciate your time. Thanks for the update, and we’ll look to read the article.

Mike: Thanks a lot, Russel.

Russel: I hope you enjoyed this month’s episode of the Pipeline Technology Podcast, our conversation with Mike.

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If there’s a Pipeline & Gas Journal article where you’d like to hear from the author, please let me know on the Contact Us page at PipelinePodcastNetwork.com, or reach out to me on LinkedIn. Thanks for listening. I’ll talk to you next month.

Transcription by CastingWords