New oil and gas gathered at shale plays already has had a significant impact for pipeline construction companies — and if the U.S. government permits more companies to export liquefied natural gas, pipeline construction companies could hit new highs.
A report from consulting firm within the energy industry, estimates that between 2013 and 2017, companies are expected to spend $216 billion on onshore pipeline projects.
The new estimate is an increase of 12 percent compared to onshore pipeline expenditures during the past five years.
Due to the rising global energy demand, oil and gas production is expected to increase, the report said.
Because of this increase in production, companies around the U.S. are already investing in more pipelines to transport oil and gas from shale plays to refineries on the Gulf Coast. For example, Tenaris SA (NYSE: TS), a Luxembourg-based steel pipe manufacturer that has its North American headquarters in Houston, just reveled Feb. 15 that it would spend up to $1.5 billion on a new steel pipe plant just outside of Houston. The driving force behind this plant was increased oil and gas production in areas such as the Eagle Ford Shale play in south Texas.
However, other countries besides the U.S. are hankering for natural gas produced in U.S. shale plays. If the U.S. approves more permits for LNG to be exported to these areas, this could increase the demand for pipelines even more than the current demand.