What Energy Security Means for Midstream Energy Companies and Potential Credit Implications

Geopolitical rifts, rising energy costs, and energy supply disruptions have brought a renewed focus on energy security globally. The solution to energy insecurity is sourcing diverse and dependable supplies of energy. World energy supply lines are being redrawn, migrating away from unpredictable and politically motivated sources of supply to more trustworthy and reliable sources. Renewable energy consumption is on the rise globally as the cost of renewable power generation has been falling, and rising oil prices accelerate the transition to renewable power sources. Natural gas continues to play a key role in being a stable part of the supply mix and a reliable bridge fuel to supplement intermittent wind and solar power. Energy security also requires reliable energy infrastructure to provide energy transportation and connectivity and to meet near- and long-term energy needs.

Key Highlights

-- Countries and companies are looking for long-term sustainable solutions to diversify their energy sources with cleaner, affordable, and reliable forms of energy.
-- In formulating an energy strategy, a concentrated portfolio is not the ideal situation for energy reliability and security, and countries heavily dependent on a single source of supply run the risk of disruptions.
-- Renewable and natural gas power generation can play a key role in providing additional electricity generation capacity to meet the growing global demand.
-- A diversified energy platform requires a reliable infrastructure of pipelines, processing, storage, export terminals, and the capacity to transport renewable and biofuels.
-- Pipeline and midstream energy companies are well positioned to provide the necessary infrastructure to support energy security and the green energy transition and are scaling up their renewable energy platforms.

“North American midstream energy companies are well positioned to pursue growth opportunities to support global energy security and transition needs,” said Ram Vadali, Senior Vice President of Natural Resources and Pipelines, Global Corporate Finance. “The infrastructure expansions required to support global energy security and energy transition and the essentiality of the service provided by midstream energy companies should be favourable for their growth and credit profiles.”