As a result of global warming, oil and gas companies are shifting focus toward natural gas from coal as a source of energy generation. Natural gas produces less carbon dioxide compared to coal; driving the growing demand for it. Its global demand is expected to reach 342 billion cubic feet per day, or bcfpd, in 2015 from 298 bcfpd in 2007. Oil and gas pipeline companies are expanding their operations in accordance with the shift. Three companies from the oil and gas pipeline industry, which are expanding their operations to meet the demand of natural gas, are discussed in detail.
Rising oil prices an advantage
Oil and gas field services include the gathering and processing of raw gas. The company’s field services reported EBITDA of $88 million in the first quarter of 2013, down 5.8% quarter over quarter. The decrease was due to the lower price of NGL, but most of the price reduction was offset by high production volumes. With the rising demand for oil products, the company is increasing its 2013 volume to 10.8 trillion British thermal unit per day, or TBtupd, from 10.3 TBtupd in 2012.
Additionally, WTI crude oil prices will rise to an average of $90 per barrel this year from $78 per barrel last year. Both of these factors are expected to increase the EBITDA to $376 million in 2013 from $279 million in 2012.
Expanding with growing demand
This method will be used in Canada for the first time by Williams Companies, Inc. (NYSE:WMB). The company will spend approximately $855 million on this facility. The new facility will be in service by the end of 2015. Its polymer-grade propylene capacity is expected to increase to 1.6 billion annually which will serve the growing demand.
