Year in Pipelines: The Future Outlook of Pipeline Projects

2024 is shaping up to be an interesting year for the pipeline project landscape. North America is expecting an increase in pipeline miles set for construction, but several factors may affect the completion rate of those construction projects. Several cancellations have already started the year with questions to be answered about the fate of necessary pipelines. In addition, interest in emerging fuels may also affect the pipeline landscape for the remainder of the year.

Going into 2024, what pipeline construction is on the horizon?

According to?a recent analysis published by the Pipeline Gas Journal, North America is experiencing a 9.5% increase in pipeline construction. There are approximately 8,700 miles under construction with around 11,100 miles planned in total for the current year. This construction will take place in areas such as the Permian Basin and Haynesville. Parts of Louisiana and Texas that are related to the LNG (Liquefied Natural Gas) growth markets will also be a part of this pipeline network expansion project.

These new projects vary from new and expanded gathering systems. They contain plans for long-haul pipe construction, compression expansions, and so-called "last-mile" pipe connections for large transmission systems to specific areas and facilities.

Looking ahead to the future, the United States will have to tackle the issue of its aging pipeline infrastructure. A majority of the nation's pipelines are now considered vintage, as they were constructed before 1960-70 and were made with outdated processes (Source: PHMSA). Because the infrastructure for emerging fuels is not in place yet, the pipeline replacement process will have to meet the demands of the current energy industry at some point.

How have pipeline project cancellations affected plans going into 2024?

Despite the increasing demand for the pipeline network's expansion, cancellations can still get in the way of the project's development. Recent events, such as the pause in LNG approvals for pending projects, can put a hold on construction progress.

This has proven to be true with?the?Calcasieu Pass 2?(CP2)?project, which would be the largest export terminal in the United States. Venture Global, the developer of the project, has recently been pushing the government to approve the project, as it has significant commercial backing internationally.

Additionally, the outcomes of this year's upcoming elections can significantly impact the U.S. government's attitude toward new and even planned pipeline projects. The end of 2024 will definitely sway the future of pipeline projects, but the exact effect and its direction is still to be determined.

How are emerging fuels like carbon and hydrogen affecting pipeline project plans?

As new innovations continue to influence the industry, the energy sector will evolve alongside those changes. Projects such as Carbon Capture, Utilization, and Storage (CCUS) are especially gaining traction, but challenges like the issue of?eminent domain?present pressing issues. Because of this, new projects for CCUS have faced delays, despite enthusiastic interest from companies and governing bodies.

Meanwhile, hydrogen continues to be a point of interest, both on the national scale and globally. Europe has shown the most movement in shifting toward utilizing hydrogen as a clean energy source. The region is witnessing a surge in new construction pipeline projects for hydrogen transportation as a result. At the same time, LNG expansion in Europe has seen a 44% increase in regassificiation capacity, solidifying the continent's LNG demand in the global energy market.

Navigating the Future of the Industry

As construction projects move forward and demand for energy sources continues to rise in North America, the industry will eventually have to face the reality of replacing outdated infrastructure and meeting the demands of a rapidly evolving energy network. The emerging presence of fuels presents both new opportunities and challenges that must be addressed alongside the progress of these construction projects.