January 2025, Vol. 252, No. 1
Features
Construction Report: Trump Policies, Thirst for LNG Could Bolster Expansion
By Michael Reed, Editor-in-Chief
(Editor’s note: Due in large part to the expanded data sets available through Global Energy Infrastructure, this year’s P&GJ Construction Report has been expanded to two parts. Part 2 will appear in the February issue.)
(P&GJ) – While the global thirst for LNG continues to drive pipeline construction globally, the real questions for the new year concern a second Donald Trump presidency in the United States. Early analysis from those in the industry suggest the change of administration will be good for midstream.
At the top of the “wish” list that owners and operators expect to come true, based on Trump’s announced policies, would be the stream-lining of the U.S. approval process for oil and gas pipeline projects. Another would involve updating Department of Energy (DOT) regulations in a way that would facilitate LNG transport and limits states’ ability to block pipelines.
While this is a heavy workload, the fact that Republicans will control both the Senate and the House for two years will give the administration’s goals a substantial boost, though the advantage in the latter Chamber will be a narrow one.
Obviously, each of these Trump initiates would have major implications outside the U.S., as well.
Still, the sector, which is historically conservative, will be weighing the costly possibility of successful legal challenges to its potential projects. If the changes to the approvals process are not handled carefully it could leave companies vulnerable to court challenges.
There is also the realization that market demand over the long haul is what really drives construction of midstream projects.
Overall, it comes as no surprise that during the past few years, and on into the near-future, we will continue to see LNG initiatives garner the bulk of the attention worldwide. Still, one must keep in mind that LNG terminal construction drives new pipeline construction, as well.
While this is increasingly true in Europe, where new pipelines are being developed to support new entry-points for gas, it’s also true in the United States, where new pipelines are needed to supply the liquefaction plants on the other side of the LNG supply chain. As LNG infrastructure continues to develop, pipeline construction will grow with it.
Similarly, thousands of miles of hydrogen pipeline are in development already, particularly in Europe, as the drive toward net-zero energy matures, and hydrogen potentially finds a bigger role in the energy mix. This, too, will bring additional opportunities for pipeline construction and related work.
It appears that traditional pipeline construction, which had remained relatively strong in recent years, could be in line for greater expansion, particularly in the United States and in some relatively newer gas markets.
India in particular has remained robust among global markets in terms of pipeline construction, as it expands gas access to hundreds of millions of people. Argentina is also moving aggressively as it begins to develop its shale resources. In our opinion, there is still plenty of space to develop fossil fuel pipelines.
North America:
NORTH AMERICA
Pipeline Miles Under Construction: 9,115
Pipeline Miles Planned: 11,689
Total: 20,804
U.S. Projects
U.S. – Permian
When we talk about pipeline construction in the United States, all eyes turn toward the Permian and Haynesville basins where Gulf Coast LNG exportation drives new projects in Texas and Louisiana.
While most of the Permian Basin natural gas pipelines built in recent years have targeted LNG export markets south of the Houston area, two proposed intrastate projects have emerged within the last couple of years that will deliver Permian Basin gas to the Texas-Louisiana border region.
In a recent boost, natural gas pipeline capacity in the Permian Basin is set to grow with the start of the Matterhorn Express Pipeline.
The pipeline, backed by EnLink Midstream and other stakeholders, will add 2.5 Bcf/d of takeaway capacity, transporting gas from the Permian to near Houston, Texas.
Matterhorn, a joint venture involving Whitewater, EnLink Midstream, Devon Energy, and MPLX, aims to ease the bottleneck in natural gas transportation from the Permian, where production has more than doubled since 2018. This ongoing surge has been driven mainly by associated gas from oil operations.
Beyond Matterhorn, three additional pipeline projects are underway, totaling 7.3 Bcf/d in new capacity:
- Apex Pipeline (2 Bcf/d): Expected to enter service in 2026, it will transport gas from the Permian to Port Arthur, Texas, operated by Targa Resources.
- Blackcomb Pipeline (2.5 Bcf/d): Set to connect Permian gas to Agua Dulce in south Texas by 2026, operated by Whitewater Midstream.
- Saguaro Connector Pipeline (2.8 Bcf/d): This pipeline will move gas to the U.S.-Mexico border, linking with the Sierra Madre pipeline by 2027-28.
Other announced projects could add 7 Bcf/d of capacity between 2025 and 2028, targeting markets in Mexico and along the Texas Gulf Coast.
Additionally, Targa’s 562-mile Apex pipeline went into service in October, and will eventually has a current capacity of about 300 MMcf/d, which could eventually rise to 2.5 Bcf/d. It runs from West, along the Louisiana border near Sabine Pass.
U.S. – Haynesville
Historically, as a predominantly dry gas basin, activity in the Haynesville shale has been limited by low natural gas prices. However, its fortunes were reversed when higher prices and ever-increasing demand forecasts were tied to nearby LNG plants. Several natural gas pipeline projects are in-development to connect Haynesville gas producers to Gulf Coast LNG exporters.
One major recent success has been DT Midstream’s three stage Louisiana Energy Access Pipeline (LEAP) expansion. The existing LEAP Gathering Lateral Pipeline is a 155-mile, 1.2 Bcf/d line stretching from the Haynesville to the Gulf Coast region. Phase 3 was brought online ahead of schedule in June 2024, adding 200 MMcf/d of capacity.
Momentum Midstream’s New Generation Gas Gathering (NG3) project, is under construction and nearing completion. It runs from the Haynesville to coastal Louisiana LNG markets, with 275 miles of additional natural gas gathering pipelines with 2.2 Bcf/d of capacity.
Additionally, Williams is expanding natural gas capacity and increasing market access. This includes the 1.8 Bcf/d Energy Gateway (LEG) project, which is currently under construction and designed to move Haynesville natural gas to several Gulf Coast markets.
All charts and graphs: https://globalenergyinfrastructure.com/
U.S. Expectations: Significant planned or proposed pipeline mileage is expected to start construction over the next three years in the United States. This should be bolstered by the Republican victory in Washington, D.C. However, 86% of projects are concentrated in the South Central region of the country, largely in Texas and Louisiana, and that will likely be the case in coming years. The bulk of these projects are associated with a single source of demand, LNG export terminals along the Gulf Coast.
The U.S. currently has about 90 mtpa of LNG export capacity, with an additional 80 mtpa under construction. 141 mtpa of new capacity is considered planned and an additional 115 mtpa has been proposed.
Nearly all this new capacity will continue to be located on the US Gulf Coast and to supply it many large pipeline projects, connecting production in the Haynesville and Permian to the coast. These include the Louisiana Energy Access Pipeline, the Permian Highway and the NG3 project. Further LNG export capacity FIDs will drive additional pipelines, such as the Apex and Warrior pipelines, to start construction.
Currently, LNG terminals in the United States are not moving forward due to the Department of Energy pause on the issuing of export permits. That is expected to change soon after Trump takes office.
In the rest of the country, U.S. pipeline development continues to be severely hampered by regulation, particularly in the northeast. Connections direct from the Marcellus and Utica shale formations to demand centers on the east coast of the United States have largely not materialized but that has potential to change due to the Trump administration’s position on pipeline approvals and regulation.
Mexico
Mexico is committed to its push for significant expansion of its natural gas pipeline network to meet rising demand. The country’s energy ministry, Sener, has called on the state-owned pipeline manager, Cenagas, to propose new projects to expand gas storage capacity and connect to privately developed pipelines.
Mexico is developing 31 mtpa of LNG export capacity on its west coast. And – in an unusual move for an LNG exporter – these projects are planning to import most of their feed gas.
The Sierrita, Samalayuca-Sasabe, Ojinaga-El Encino and Topolobampo pipelines will transport this feed gas to the new LNG facilities. Large potential new projects in the region are the Saguaro Connector and Sierra Madre pipelines, which awaits the full sanctioning of a proposed LNG export terminal.
The pipelines would deliver natural gas to Mexico Pacific’s, in-development, 14.1 mtpa Saguaro LNG export facility on the Gulf of California coast. Additionally, Gasoducto Centauro del Norte has signed an agreement with Mexico’s Federal Electricity Commission to develop, build and operate a 258-mile gas pipeline in the north of the country.
In the south of Mexico, TC Energia’s Southeast Gateway pipeline will have a capacity of 1.3 Bcf/d and span about 475 miles (770 km).
From Coatzacoalcos, in the Veracruz state, the line will continue on to Paraiso, Tabasco, where it will interconnect with other pipelines securing the supply of natural gas to the Yucatan Peninsula. Another major planned project is the Properidad Pipeline stretching over 200 miles along the southeast coast from Salina Cruz to Tapachula. This pipeline was introduced in the nation’s 2020-2024 Natural Gas Plan and remains in development.
Additionally, the Federal Electricity Commission (CFE) and Energía Mayakan, from Engie, signed an agreement for the expansion of the Mayakan gas pipeline, with the objective of guaranteeing the transportation of natural gas for the generation of energy demanded by the Yucatan Peninsula.
The expansion of Mayakan will allow the natural gas transportation capacity to be doubled, going from 250 MMcf/d (7 MMcm/d) to 567 MMcf/d (16 MMcm/d), through the construction of a 435-mile (700-km) gas pipeline.
In addition to promoting the interconnection with the Puerta del Sureste gas pipeline, which provides natural gas by sea from Brownsville, Texas, to Tuxpan and Coatzacoalcos, in Veracruz; and Paraíso, Tabasco, which will interconnect with Mayakan in Cactus, Chiapas.
Engie’s project would take gas from state oil company Pemex’s Cactus processing plant in the state of Chiapas and direct it to Valladolid, in the state of Yucatán.
Mexico Expectations: Mexico’s gas demand is forecast to increase by an average of 1.27% annually from 2024 to 2029. Cenagas, which oversees Mexico’s (6,422-mile)10,336-km Sistrangas natural gas pipeline network, is expected to submit expansion proposals several proposals for unspecified projects.
There’s a focus on connecting Sistrangas to privately developed pipelines like the Southeast Gateway and Cuxtal II to address energy shortages in southeastern Mexico
Several pipeline projects are in development or under consideration:
- The Reynosa bypass pipeline, a $129 million project, is expected to begin operations in July 2025. It will connect Sistrangas to major U.S. pipelines, increasing gas supply to northern Mexico
- TC Energy is developing the Southeast Gateway pipeline, a 445-mile (715-km) offshore natural gas pipeline in southeast Mexico. The project’s cost estimate has recently been reduced, and with mechanical completion of all major offshore facilities completed, there are expectations for the project to be in service in early 2025.
Canada
In Canada, one of the biggest positive developments for energy infrastructure developers in recent years the relationship between the pipelines and the First Nations peoples, who are beginning to embrace the economic opportunities that pipeline can offer.
The growing technical and financial participation by First Nations represent a true change in the relationship between Canada’s Indigenous leadership and midstream projects that has been years in the making.
One of the clearest indications of that evolving perspective was the creation of the First Nations Major Projects Coalition (FNMPC) in 2016, a coalition of more than 130 of Canada’s First nation communities that have committed to work toward economic advancement through such projects as TC Energy’s Coastal GasLink pipeline.
The Coastal GasLink project has involved the construction and operation of a 48-inch, 416-mile (670-km) pipeline from near Groundbirch, in northeastern British Columbia, to the Shell-led LNG Canada Export Terminal, which also is scheduled for completion this year, near Kitimat, B.C. From there, the LNG will be exported to Asian markets.
Canada Expectations: The Canadian government is continuing to support the balancing of pipeline development with environmental concerns and Indigenous rights.
Meanwhile, the government drafted regulations that would require oil and gas producers to limit greenhouse gas emissions by 35% of its 2019 levels, which if implemented, would likely deter investments in Canadian projects.
Current ongoing and under construction projects in Canada include:
- Fortis’ Eagle Mountain Pipeline, a 29.2-mile, 24-inch line from Coquitlam, to Woodfibre, British Columbia, is under construction.
- Gazoduq’s 466-mile 42-inch pipeline from northeastern Ontario to Saguenay, Quebec
- Enbridge’s West Coast Connector, a 528-mile 48-inch line from Cypress, British Columbia, to Prince Rupert, British Columbia.
- Two parallel 215-mile gas pipelines from the Montney gas reserve to Alberta were recommended for approval by the federal energy regulators in October 2023.
South & Central America
SOUTH AND CENTRAL AMERICA
Pipeline Miles Under Construction: 4,935
Pipeline Miles Planned: 10,373
Total: 15,308
Background: South America will continue to be an active region for pipeline development in the coming years with the biggest milestone for South American pipelines within the past year was the completion of the first stage of the Nestor Kirchner Pipeline in Argentina.
Argentina
The Nestor Kirchner pipeline will bring to market the nation’s Vaca Muerta shale gas. Located in western of Argentina, the Vaca Muerta reservoir is estimated to hold 300 Tcf of recoverable gas reserves. Argentina is currently a net importer of gas, but development of the reservoir promises to satisfy the country’s domestic demand and leave a large surplus available for export.
The Nestor Kirchner pipeline began development in 2018 and the first phase of the project, a 290-mile section of 36-inch pipe, was opened this last summer. While the pipeline will eventually operate at a capacity 6.6 Bcf/d, at the moment capacity will be limited to 3.5 Bcf/d.
This first section links Vaca Muerta production to the Buenos Aires province, where most of Argentina’s domestic gas demand is located. The second section of the project will carry gas farther north to the Santa Fe province, where it can supply customers in northern Argentina.
As part of the project, Argentina is also reversing the flow of the Gasoducto Norte (Northern Pipeline), currently set up to receive gas from Bolivia. Bolivian gas production is falling, and Bolivia and Brazil are both potential markets for Argentina’s gas.
Combined with the flow reversal, a 93-mile interconnector between the Northern Pipeline and the Central East Pipeline will ensure additional Vaca Muerta gas has a route north to Argentina’s neighbors.
Construction on the second phase of the pipeline has yet to begin. State-owned Energia Argentina is expected to launch tenders for its construction soon, and it is hoped the second phase will be completed in March of 2026.
Also in Argentina, the state-owned company Energía Argentina has signed a memorandum of understanding with Petrobras for three years in order to transport gas from Vaca Muerta to the provinces of northern Argentina.
This work consists of reversing the flow direction of four compressor stations of the North Gasduct in Ferreyra and Deán Funes in the province of Córdoba; Lavalle, in Santiago del Estero; and Lumbreras, in Salta, of the Northern Gasoduct operated by the Argentine company TGN.
At the end of April, the welding of the 36-inch pipes began in the municipality of La Carlota (Cordoba), where the gas pipeline for one of the main works of the 76-mile (122-km) project, called the Tío Pujio-La Federal Integration Gasduct, begins. Carlota, which allows linking the Central West Gasduct with the North Gasduct.
Bolivia
Background: The state oil company YPFB confirmed that it is expanding the Sucre-Potosí Gas Pipeline (GSP) Phase II. The construction of the GSP Loop, Río Pilcomayo-Mariaca section, will allow an increase in capacity from 10.3 MMcf/d to 13.6 MMcf/d.
This project will increase transportation capacity to satisfy the growing market demand in the Potosí region brought on largely by the construction of a cement plant. The new 10-inch, 8.6-mile (14-km) loop pipelines in the Río Pilcomayo-Mariaca section.
Brazil
Background: The Brazilian company Gasmig said it has begun to build the expansion of the Central-West Gasduct, an infrastructure that will allow an increase in its extension of approximately 186 miles (300 km). That will increase of 23% in the company’s current network.
The project’s natural gas consumption potential is 8.1 MMcf/d (230,000 cm/d).
The gas pipeline will connect eight mining municipalities: Betim, Divinópolis, Igarapé, Itaúna, Juatuba, Mateus Leme, São Joaquim de Bicas and Sarzedo. Together, these cities represent 7% of the gross domestic product (GDP) of Minas Gerais and have about 1 million inhabitants.
State-owned oil company Petrobras has significant plans to expand the nation’s pre-salt projects and infrastructure by investing nearly $40 billion in pre-salt projects and infrastructure over the next five years.
Colombia:
The CEO of Ecopetrol, which is working with the government of Venezuela to reactivate the Antonio Ricaurte gas pipeline. Venezuelan state natural gas company PDVSA and Cenit, a subsidiary of Ecopetrol, have already completed initial assessment for the 124-miles (200-km) pipeline to establish the conditions of the gas pipeline.
Ecopetrol has estimated that the rehabilitation of the gas pipeline would take between 10 and 12 months and would cost $300 million. In addition, there is currently a contract in force between Ecopetrol and PDVSA for gas on pipeline.
The CEO of Ecopetrol stated that solutions are being sought to lift Ofac restrictions for the eventual transaction of gas from Venezuela to Colombia, probably through a private agreement between the two companies.
The Antonio Ricaurte gas pipeline has a transportation capacity of 450 MMcf/d (12.7 MMcm/d), which represents 45% of Colombia’s consumption.
The pipeline has a length of 140 miles (225 km), connecting the eastern coast of Lake Maracaibo in Venezuela with Punta Ballenas in Colombia’s Guajira, of which 56 miles (90 km) passes through Colombian territory and has been abandoned for 10 years.
Chile
The state oil company ENAP confirmed it is working with a government organization that assesses the environmental impact of projects in advance of building a natural gas pipeline in Magallanes.
The Environmental Evaluation Service (SEA) agreed to begin the project’s assessment, designed to transport natural gas to the Clarencia Measurement Center.
The new infrastructure, in the municipality of Primavera in the region of Magallanes and Chilean Antarctica, would bring natural gas from the Sara Compressor Station to be delivered to the Clarence Measurement.
The gas pipeline will be made up of carbon steel pipes with an external coating of three-layer polyethylene, with a diameter of 6 inches and an estimated length of 35 miles (56 km). A fiberoptic cable will also be installed for the transmission of electrical signals and control data.
Colombia-Venezuela
With Colombia facing potential gas shortages by 2027, there is renewed interest in reviving the 139-mile (224-km) Trans-Caribbean Gas Pipeline, which had been suspended in 2015. It would connect Venezuelan gas fields to northwest Colombia.
Peru
There are ongoing efforts to build gas pipeline infrastructure in southern Peru, including a potential new LNG plant in Ilo. A Bolivia-Peru gas pipeline has also been discussed.
South and Central America Expectations: There are several important oil and gas pipeline prospects expected to begin or complete construction in South and Central America between 2025 and 2027.
In Argentina, the Vaca Muerta Sur Pipeline is a 434-mile (700-km) greenfield pipeline project by YPF to transport crude oil from the Vaca Muerta basin to Punta Colorada on Argentina’s Atlantic Coast. Phase 1 would connect Vaca Muerta to Allen, with Phase 2 completing the route to the coast.
Also, a Vaca Muerta to Brazil pipeline would connect Argentina’s basin to southern Brazil and São Paulo, connecting Brazil’s national pipeline system and allowing distribution nationwide. The timeline for the project has not been specified.
Part 2 of the Construction Report, centering on Europe, the Middle East, the Asia Pacific, Australia and Africa will be published in the February 2025 issue.
Comments