The market for the Gulf of Mexico oil and gas midstream market is expected to register a CAGR of more than 1.32% during the forecast period of 2020–2025. Factors, such as increasing investment in the sector and increasing production of oil are expected to boost the demand for the Gulf of Mexico oil and gas midstream market during the forecast period. However, the area is marred by cyclones, which is one of the major concerns for the midstream infrastructure, and this, in turn, is likely to delay the projects in the coming years.
- The Gulf of Mexico has an extensive pipeline network all over the coast. New pipelines are in the proposal stage and are expected to be completed in the forecast period.
- Exploration and production of oil and gas fields in the region are expected to become an opportunity for the companies working in the oil and gas midstream industry as more pipeline and storage infrastructure may be required in the near future.
- An increase in investment in the region is expected to boost the growth of the entire oil and gas sector in the region.
Key Market Trends
Pipeline Sector to Witness Growth
- The oil production in the Gulf of Mexico increased, by 3.87%, to 1,983 thousand barrels per day, in January 2019 from 1,909 thousand barrels per day in January 2018. An increase in the production of oil increases the need for better midstream infrastructure and thereby is expected to boost the midstream industry.
- In 2018, Texas City Terminal Pipeline is a proposed natural oil pipeline in Texas that will run from a proposed offshore oil terminal to Texas City, Texas, the United States. It is expected to have a length of 128.7 kilometers (80 miles) and is expected to come online during the forecast period.
- In 2018, Transcontinental Gas Pipeline is an operating natural gas pipeline that has a capacity of 15,580 million cubic feet per day and has a length of 16,415 km (10,200 miles). It is one of the most important pipelines in the country because it covers a very large distance from the Gulf of Mexico to New York City Area and provides crude oil to different locations all over the eastern part of the United States.
- Therefore, factors, such as increasing oil and gas production, coupled with upcoming projects, are expected to boost the midstream sector in the years.
Increase in Investment to Drive the Market
- The natural gas production in the Gulf of Mexico decreased, by 5.63%, year on year, to 80810 million cubic feet, in 2018 from 101925 million cubic feet, in 2015. The natural gas in following a trend of decreasing production, which restrains the market.
- In 2019, Freeport-McMoRan LNG Terminal was a proposed LNG export terminal in the United States. The expected capacity of the terminals is 24 million metric ton per annum and is expected to be completed by 2022. As of 2019, the terminals are under construction.
- In 2019, one of the largest terminals in the region is the Ingleside Energy LNG Terminal, which is an LNG export terminal located at the Port of Corpus Christi in Ingleside, Texas, United States. The capacity of the LNG terminals is approximately 1 billion cub feet per day. The LNG Terminals provide for the capacity of export of LNG to countries all over the world.
- The Gulf of Mexico oil and gas midstream industry is expected to grow slightly in the forecast period due to the increase in the investment in the region.
The Gulf of Mexico oil and gas midstream market is moderately consolidated. Some of the major companies include Williams Companies Inc, Exxon Mobil Corporation, Occidental Petroleum Corporation, Royal Vopak NV, and Enagás SA.
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