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Tickers in this Article: D, ETP, WMB, EEP, EOG
A recent study by an industry trade group estimates that spending of as much as $200 billion over the next 20 years is required to provide the infrastructure to enable development of new oil and gas resource bases in North America. IN PICTURES: How To Make Your First $1 Million

North American Shales
The explosion in activity related to developing the shale plays in North America has sparked the need for infrastructure to gather, process and transport the resources to the end user. These midstream assets are having a hard time keeping up with the development of the Haynesville, Marcellus Shale and other plays in North America.

The Interstate Natural Gas Association of America estimates that anywhere from $133-210 billion is needed through 2030 to build this infrastructure. The report says that from 29,000-62,000 miles of extra natural gas pipelines and 370-600 billion cubic feet (Bcf) of new storage capacity would be required to meet the additional supply of natural gas that the industry is developing.

More Power
Additionally, millions of horsepower of compression will be needed, and thousands of miles of gathering pipelines as well. The report also incorporates the need for infrastructure for Liquefied Natural Gas (LNQ) and Arctic natural gas pipelines.

Dominion Resources (D) already operates a pipeline network of 14,000 miles in the North Eastern U.S. One project it is working on is the Keystone Connector, which will have capacity of 1 Bcf per day to service the Marcellus Shale. The company is also improving the LNG facility at Cove Point.

The Keystone Connector is being built with Williams Companies (NYSE:WMB). Williams Companies also has several of its own projects under way, and plans on spending $1.18 billion to bring five projects into service through 2010.

Transfer of Power
Energy Transfer Partners, L.P.
(NYSE:ETP) is building the Tiger pipeline across Louisiana to Texas, to service the Haynesville Shale. The pipeline is expected to be on line in 2011 and add up to 2.0 Bcf of capacity.

Enbridge Energy Partners (NYSE:EEP) already has an extensive pipeline network for both crude oil and natural gas. The company is currently expanding the network in North Dakota to serve the Bakken Shale. The project will cost $200 million, and add 80,000 barrels per day of capacity. The expansion is expected to come on line in the first quarter for 2010.

Still Not Enough
This won't be enough for some. EOG Resources (NYSE:EOG) said during its second quarter earnings conference call in August 2009 that it would use railcars to ship part of its crude oil to Oklahoma. The action will ease any infrastructure issues for the company, and also avoid the Clearbrook, Minnesota hub, which is not favored by the company due to its size and differential in price.

The Bottom Line
The industry is moving forward with the twin responsibility of developing the large North American oil and gas resource base, and building the infrastructure to process it and bring it to the end user. This is an expensive and lengthy process, but an important one for the exploration and production industry. (For a primer on the oil industry, refer to our Oil and Gas Industry Primer.)

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