Midstream Oil and Gas Markets Growing Across North America

With producers from the United States and Canada racing to meet rising global demand for oil and natural gas, the midstream sector is experiencing rapid growth.

In fact, through 2015, nearly half of the estimated $30 billion being spent on oil and gas infrastructure will go toward the development of midstream-related projects such as pipelines, storage sites and LNG export facilities.

Among the many factors fueling this growth, the most prominent has been the recent surge in North American natural gas production. By 2020, Canadian crude output is expected to reach nearly 5 million barrels per day and natural gas production — which experienced a drop-off over the past five years — is expected to rise to almost 18 billion cubic feet per day by 2035.

The use of new and advanced drilling and completion technologies has also given producers the capability to gain access to basins and reserves that were at one time considered inaccessible. Horizontal drilling and multi-stage fracturing, in particular, have both played key roles in the recent production surge.

A great deal of the current midstream infrastructure across the United States simply does not align geographically with the shale deposits where gas is being extracted from; thus prompting the need for a larger and more advanced transport network to connect drilling sites with refining facilities.

In the midst of all this activity, many midstream firms across North America have been able to achieve a great deal of financial success as they take advantage of the pressing need to keep infrastructure on pace with the soaring production demand. And with many oil and gas investors shifting their interest from large corporations to smaller and more intermediate firms, this recent trend is expected to continue.