Global Pipeline and Midstream Industry Outlook 2024: Energy Exports to Drive Growth

We view the outlook for the Pipeline and Midstream Sector (the Sector) to be neutral. We expect oil and gas prices to soften in 2024; however, we expect excess supply to primarily drive the softening. Consequently, we expect asset utilization in the Sector to remain strong as rising energy exports drive up oil and gas production in North America. Additional tailwinds include consolidation among oil and gas producers, which should improve counterparty risk profiles, stabilizing interest rates and moderating inflation.

-- Asset utilization levels in North America were quite robust in 2023 as oil and gas production reached record highs in 2023, primarily driven by an increase in energy exports, and we expect energy exports to drive asset utilization and growth in 2024.

-- We expect financial risk profiles of companies in the Sector to remain relatively Stable and companies in the Sector to be fairly disciplined in their approach to capital investment and focus on projects that generate contracted cash flows.

-- We expect investment in low carbon business to accelerate aided by financial support from governments.

-- We expect the trend of financial participation from Indigenous groups in major midstream and pipeline projects in Canada to continue to gather momentum as companies look to gain social licence from the communities where projects are located.

“We expect credit ratings in the Sector to be relatively stable and any changes in ratings to be primarily driven by Company-specific factors rather than Sector-specific issues,” said Ravikanth Rai, Senior Vice President.