May 19, 2020 – S&P Global Platts
Feature: Uneven impacts expected as capex cuts trickle down to gas pipelines
By Maya Weber & Harry Weber
New York — Billions of dollars in spending cuts by producers and pipeline operators likely will reshape what and when natural gas midstream infrastructure is developed over the next several years.
But the deep capital expenditure cuts and broader energy market woes are likely to carry uneven ripple effects for interstate natural gas pipeline projects, according to a range of analysts…
Read the full article here: https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/051920-feature-uneven-impacts-expected-as-capex-cuts-trickle-down-to-gas-pipelines
… Another large player, Enbridge, has said it is deferring about $1 billion in capital spending into next year, with about half tied to permitting issues and half in coronavirus construction delays.
Michael Webber, managing partner of investment research firm Webber Research & Advisory, has argued that most projects are slipping even if developers are not yet talking about it. "In a sense, the pandemic may give some an excuse to delay or cancel projects that were headed that direction anyway," he said.
The impact really depends on what the market thinks about the duration of the demand loss, said Rick Smead of RBN Energy.
"If it's short and demand comes back soon enough to work off storage balances so that oil and gas prices can get back to reasonable levels pretty quickly, I wouldn't expect it to have a material impact on the pipelines that are already committed for the next couple of years," he said.
