Publications

- December 1, 2013: Vol. 6, Number 11

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Pipefitting: Long-term investors covet midstream oil and gas infrastructure in North America, but the opportunity is by no means a passive investment

by by Drew Campbell

 

North America’s oil and gas market is experiencing something it has not seen for decades — a glut, and infrastructure is needed to help relieve the pressure. That is both good news and bad news for infrastructure investors. The good news is their capital is in high demand.

This demand for capital applies to new projects, or greenfield investments, as well as investments in existing, or brownfield, assets where investors might have a more difficult task. Certain risks associated with new-build projects are expected, but existing brownfield assets are often perceived to be the safer, lower-risk play. And that assumption could spell trouble in this market.

The landscape of North American oil and gas infrastructure is changing rapidly — it is a new Wild West in many ways with discoveries and boom towns, public policy and regulation that are playing catch up, and hopes of sustained long-term economic growth pinned to these new markets

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