Based on several studies, the midstream sector will require at least an additional investment of $17 billion by 2020 to bring rising supplies of Marcellus shale natural gas to markets in the northeast U.S., a senior executive told an audience at Hart Energy’s DUG-East Conference and Exhibition in Pittsburgh.

Randy Crawford, senior vice president of EQT Corp. and president of the midstream, commercial and distribution division, said midstream infrastructure is the critical link to moving natural gas to critical markets.

“Natural gas is fast becoming the world’s dominant fuel of this century. It is our future,” he said.

Only five years ago, many energy analysts believed the U.S. was facing a potential shortfall of natural gas, and the industry responded by building several LNG import terminals to offset this expected shortfall.

But since the development of the technology to draw natural gas out of shale formations, the U.S. market has been flooded with additional supplies of natural gas. Prices have flattened as a result.

The Marcellus shale is a large part of the shale revolution, with an estimated 489 trillion cubic feet (Tcf) of natural gas, the second-largest gas field in the world, at the doorstep of the biggest market in the world. Current production from the Marcellus is around 4 billion cubic feet (Bcf) per day. Many analysts expect production from the Marcellus to double to 8 Bcf per day by 2014 and to increase to around 11 Bcf by 2015.

Crawford said the impact of this significant amount of incremental supplies of natural gas on the U.S. market is clear: natural gas prices have fallen relative to crude and their absolute price is less than half of that seen in European markets.

EQT has constructed an additional 1,200 miles of pipe and 110,000 horsepower during the last four years to cope with the growing amount of natural gas it has developed from its wells in the region.

Since 2008, Marcellus production has begun to rapidly displace a growing portion of the supply from the Gulf Coast and Rockies into the Northeast. By 2015, Marcellus production will be capable of displacing all other sources of natural gas into the Northeast, making the development of the midstream sector in the region critical.

To make this transformation possible, the region needs a more developed north-south header system to link major interstate transmission lines. To this end, EQT has invested to expand its Equitrans header system, which lies atop the Marcellus fairway with links to five interstate pipelines, Crawford said.

A more developed header system will allow EQT to consolidate the acreage of multiple producers to captures, to implement economies of scale and realize cost savings. This will allow the region to move larger supplies of natural gas to market at a reduced cost. “There is a need for additional pipeline header systems that connect multiple interstate pipeline systems to open up the acreage,” he said. “Leveraging economies of scale will help us lower overall costs.”

One of the lessons EQT has learned while expanding its operations in the Marcellus is the importance of the environment to neighbors in the region. As a result, EQT makes ample use of existing rights of way, sound barriers and sound reduction technology, emission controls, waste heat recovery and other technological developments. Many of these environmental benefits require additional investment, but the payoff comes from good relations with satisfied landowners.

“Preserving the environment is good business and quite frankly, our neighbors expect and deserve thoughtful development plans,” he said.

In addition to expanding its header system, EQT has re-engineered its Equitrans, its FERC-regulated pipeline which was originally constructed to transport natural gas into Pittsburgh. The pipeline now exports Marcellus gas to a broader market throughout the Northeast, Crawford said.