Burgeoning U.S. production of crude oil, natural gas and natural-gas liquids is spurring thousands of construction projects—from site-access roads to pipelines to LNG export terminals—and keeping engineers and contractors with appropriate experience busier than they have been in years.

That was a key takeaway from ENR's second annual Energy Construction Summit, a one-day conference in Houston that convened energy-sector owners and the design and construction professionals that make their projects a reality.

The conference featured speakers and panelists who discussed the markets for rail, barge and storage facilities; pipelines; petrochemical plants; export facilities; and the growing number of facilities that will super-cool natural gas into a liquid and load it on ships for delivery to Asian and other overseas markets.

DIAZ

Javier Diaz, senior energy analyst for LNG at Bentek Energy, told attendees that demand for LNG export terminals is driven by the new abundance of low-cost natural gas in the U.S. and the rising energy demand in China, India and other international markets—Japan being the largest.

Diaz said he expects at least six and possibly as many as nine LNG export terminals to be built in the U.S. Two or three LNG export terminals are likely on Canada's West Coast, too.

Bechtel has been building the first four "trains"—or liquefaction units—at Cheniere Energy's Sabine Pass LNG project in Cameron Parish, La., since 2012; the first train is expected to begin liquefying gas by the end of next year.

Work is just beginning at the Cameron LNG project in Hackberry, La., and the Cove Point project in Cove Point, Md., and will begin within weeks at the Freeport LNG project in Texas. A joint venture of CB&I and Chiyoda International Corp. is building the Cameron LNG project and a JV of Kiewit Corp. and IHI E&C International is building Cove Point; a JV of CB&I and Zachry will build the Freeport project.

Several presenters at the energy summit expressed concern that the demand for pipefitters and other skilled craftspeople may well outstrip supply and that labor shortages could lead to wage escalation and project delays.

DEDMAN

Steve Dedman, senior vice president at Zachry Holdings Inc., acknowledged that the skilled-labor market will tighten and that annual wage hikes "in the double-digit range" are possible and even likely, particularly in 2016-18, when construction activity is expected to peak. Still, the construction industry has always found ways to overcome challenges, and rising wages will be a boon to a new generation of craftspeople, he said.

In addition to tens of billions of dollars in LNG export projects, owners are planning to invest even more on scores of new petrochemical plants, such as ethane crackers to convert the now-plentiful natural-gas liquid (NGL) into ethylene—the basic building block for many chemicals and plastics—for domestic consumption and export. Also planned are tens of billions of dollars in new or upgraded oil, gas and NGL pipelines as well as facilities to move oil and NGLs by rail or barge.

FARACA

Tina Faraca, vice president of engineering and construction at Spectra Energy, listed 13 pipeline projects the company is working on; taken together, Spectra's full or partial shares of the projects are valued at up to $6.5 billion. Spectra's largest single project is the $3.2-billion Sabal Trail natural-gas pipeline, which Spectra and NextEra Energy are developing jointly.

Sabal Trail, which will be capable of delivering one billion cu ft per day of gas from west-central Alabama to near Orlando, will consist of 480 miles of 36-in.-dia pipe, 22 miles of 24-in.-dia pipe and five compressor stations, Faraca said, adding that the project is expected to begin transporting gas by mid-2017.

During the panel discussion on rail, barge and storage facilities, Brad Rinehart, vice president of Matrix Service Co., said the midstream and downstream energy sectors will be investing $80 billion a year on infrastructure through 2020 and $60 billion a year in the five years following 2020—all to keep pace with the growing and changing needs of the energy and petrochemical industries.

In one of the conference's two keynote speeches, Scott Duncan, vice president of investment banking at Houston-based FMI Capital Advisors, said the unprecedented volume of energy-related construction work will challenge engineers and contractors. "Project schedules are condensing, and complexity is increasing," he said, noting that concerns about cost "are taking a back seat to quality, safety … and on-time delivery."

In the other keynote, Charles McConnell, executive director of Rice University's Energy and Environment Initiative and, before that, assistant secretary of energy for fossil fuels in the Obama administration—said that while the U.S. should continue to develop competitively priced renewable-energy sources, the nation's focus should be on developing fossil fuels and further reducing their negative environmental effects.