North America Midstream & Energy Infrastructure: Midstream Sound Bites: You‘re Irreplaceable

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North America Midstream & Energy Infrastructure: Midstream Sound Bites: You‘re Irreplaceable

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17 Jun 2026 00:00:00 ET │ 9 pages

North America Midstream & Energy Infrastructure

Midstream Sound Bites: You’re Irreplaceable

CITI’S TAKE

In this edition of Midstream Sound Bites, we’re taking a look at the cost to

replace all ~200k miles of US interstate natgas pipelines. It’s a common

and recurring topic among investors. While a very theoretical analysis

(replacing the entire system is not realistic), the aim is to highlight the

value of assets in the ground. After analyzing >1mm data points including Spiro DounisAC

pipeline mileage and diameters across the US, we estimate the cost to +1-212-816-6926

replace the entire network is over $1 trillion. Within our coverage, DTM, spiro.dounis@citi.com

ENB, ET, KMI, TRP, and WMB account for ~2/3 of this value. Interestingly,

Douglas Irwin

this replacement cost equates to >90% of the combined enterprise value

+1-212-816-9525

for these companies and leaves very little value attribution for all their douglas.irwin@citi.com

other assets. Using replacement cost as a reference point implies over two

turns of EV/EBITDA upside from current levels to value criticality of that Charles Bryant

pipe in the ground. +1-212-816-3284

charles.bryant@citi.com

It’s Going to Cost You. We conservatively estimate the cost to replace the entire US

interstate natural gas pipeline network to be over $1 trillion, which does not include

storage, gathering, distribution, or intrastate pipelines. On average, we valued the

network at ~$240k per inch-mile based on recently announced greenfield projects

and some added costs for Northeast pipelines given the terrain and challenged

history.

More than the Enterprise Value in Some Cases.