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US poised to lead global oil pipeline growth through to 2024

first_img Around 4,900km of oil pipeline growth is expected in the US by 2024 The US will dominate global crude oil trunk and transmission pipeline growth over the coming years, accounting for around a quarter of all new capacity through to 2024.Pipeline length additions totalling almost 4,900km in the country have either been approved or are currently pending approval, according to research firm GlobalData – far more than any other country.By 2024, new extensions globally are expected to exceed 17,000km, with US additions to more than double those of nearest rivals Russia and Canada, which will install 2,040k, and 1,443km respectively over the period. Oil price recovery boosts prospects of US pipeline growthWith West Texas Intermediate (WTI) crude currently resurging towards $60 per barrel for the first time in more than a year, there is growing optimism of an approaching recovery for the US oil industry, after a year in which the pandemic caused huge market disruption.US producers who were forced into strict capital discipline and operational cutbacks over the past 12 months are now looking forward to friendlier economic conditions, as prices recover and accelerating vaccine rollouts raise the prospect of demand growth for their products.“The Covid-19 pandemic has resulted in project delays and capex cuts in the US crude oil transmission pipelines segment,” said GlobalData oil and gas analyst Soorya Tejomoortula.“However, the sector is expected to gradually recover from the pandemic impact if the recovery of crude oil prices continues, and any potential ramp-up of production by the US shale producers in the near future.”The new administration of President Joe Biden has taken a more circumspect approach to the US oil industry than its predecessor as it plots a transition to a low-carbon economy, although policies introduced so far to pause new leasing for production activity on federal lands is unlikely to affect near-term growth prospects too heavily.Among the major pipeline projects on the horizon in the US is Jupiter, a transmission network planned to carry crude from drilling sites in the Permian Basin to storage terminals along the Gulf of Mexico.Jupiter will span 1,094km connecting these two key regions of US oil activity, with first operations expected to begin in 2023.The Capline Reversal project is another important part of the growth prospects in this midstream sector in the US. The pipeline formerly carried crude oil from production sites in the Gulf of Mexico to refineries in the Midwest, but is now being re-engineered to switch the direction of travel from the Midwest to the Gulf of Mexico. After a year in which the pandemic disrupted operations and project planning, recovering oil prices will encourage a surge in US pipeline growthlast_img read more