More gas, oil midstream project deferrals likely as sector strain grows, experts say

摘要

As North American midstream companies cut spending and the risk of production shut-ins looms, industry experts said that the sector can expect rolling project deferrals among oil and gas transportation projects and beyond. Pembina Pipeline, ONEOK and Phillips 66 have publicly announced they will suspend or postpone pipeline, processing and export projects as part of their strategies for weathering the oil price collapse. Royal Dutch Shell’s decision to walk away from the proposed Lake Charles LNG project in Louisiana cast fresh doubt on commercial sanctioning prospects as Energy Transfer moves forward as the sole developer. But more midstream delays appear inevitable as the oil price war between OPEC and Russia forces drillers to reconsider output and the COVID-19 pandemic suspends construction timelines, sector analysts said. “We expect additional project deferrals [within] every major oil basin in the US declining over the course of 2020 and near-term shutin risk accelerating,” energy investment bank Tudor Pickering Holt & Co.’s Colton Bean wrote in an email. “While Permian projects constituted a disproportionate share of the total industry backlog, deferrals will not be limited to the wellhead or basin takeaway as declining associated gas production also reduces the need for downstream NGL infrastructure.”