Natural Gas Infrastructure Investments and Capital Renewal

Continental natural gas prices are higher and more volatile than ever before. Reducing prices and curbing volatility will require adequate investments in natural gas infrastructure. Natural Gas Infrastructure Investments and Capital Renewal looks at ways to promote the required investment in infrastructure, focusing in particular on the role of the regulated natural gas utility in underwriting access to gas supply.

Document Highlights

Continental natural gas prices are setting records: they are high and they are volatile. Stemming rising prices and reducing volatility will require adequate natural gas infrastructure—pipelines, liquefied natural gas regasification facilities and storage facilities. Natural Gas Infrastructure Investments and Capital Renewal looks at ways to promote the required investment in infrastructure, focusing in particular on the role of the regulated natural gas utility in underwriting access to gas supply. Among the paper’s conclusions:

1. meeting the increasing demand for natural gas requires enormous commitments of long-term capital to expand infrastructure and to upgrade or renew existing, aging systems;
2. underwriting large additions to infrastructure capacity requires long-term contracts signed by shippers and/or equity investment on their part;
3. natural gas utilities have an important role in underwriting capacity additions; and
4. predictable and stable regulatory policies could help reduce the risks and costs associated with infrastructure investments.