Stuck in the Pipeline – Project Delays Hit Industry Outlook
Now in its 8th edition, the World Onshore Pipelines Market Forecast 2015-2019 from Douglas-Westwood, considers the prospects for the onshore pipelines construction business and values the future markets through to 2019 by key component, region, pipeline type and diameter.
A substantial fall in oil prices since July 2014 has negatively impacted the onshore pipeline market, although project delays are almost exclusively in North America. The pipeline market itself is well-cushioned from short-term commodity price fluctuations with projects typically responsive to long-term demand and supply trends, both within and between regions.
Douglas-Westwood (DW) expects onshore pipeline expenditure to grow modestly to $220bn between 2015 and 2019, an increase of 14% compared with $193bn over the preceding five-year period. An increasing volume of pipeline installations is expected in most regions, supported by continued product demand growth in both new and existing population centres, new and increasing hydrocarbon supply, and a shift in energy demand preferences towards gas.
North America and Asia remain the highest volume markets, together accounting for approximately 45% of global Capex. However, fastest growth is anticipated in the Middle East. In total DW expects almost 309,000km of line pipe to be installed. This represents an increase of 11% compared to the previous five-year period.
With an anticipated 35% increase in global energy demand between 2010 and 2040, natural gas is expected to significantly increase its share of the energy mix – growing by 65% over the same period. This trend, observable in our previous edition of this report, is progressing as expected, driven in large part by non-OECD demand growth and technology advancements, including in liquefied natural gas.
Investment in new infrastructure to support LNG and unconventional gas developments will be a major factor shaping future demand for pipelines. Outside the major oil province of the Middle East, gas pipelines accounted for 62% of km installed over the past five years with this figure expected to increase to 66% for the 2015-19 period.
We have seen lower steel prices and greater manufacturing capacity become available. Lower levels of near-term activity among tubular goods providers have released manufacturing capacity for line pipes. Lower than expected economic growth in Asia and reduced activity in North American unconventional production is expected to support this scenario in the short-term.
The Douglas-Westwood Approach
- Industry consultation – discussions with a wide range of companies including: operators, EPC contractors, equipment manufacturers, engineering consultancies and private equity firms.
- Unique and proprietary data – detailed by project in our in-house databases. Updated year-round from published sources and insight gained from industry consultation.
- Methodology – our forecast is drawn from our in-house databases, which enables the forecasts to be established on a project-by-project basis; taking into account factors such as progress to date, project size, location and any other complications.
- Market forecasts – by region, product (gas & liquid), diameter and key components (line pipe, right-of-way, fittings, pumping & compression stations and construction).
The Report covers all key commercial themes relevant to players across the value chain in the onshore pipeline sector:
- Regional forecasts – Capex within each region, including examples of notable projects and operators within the region and countries with most activity.
- Key drivers – discussion of factors encouraging onshore pipeline market growth including the energy needed for industrialisation in emerging economies, increase in population and GDP per capita, the surge in transportation demand and the move towards gas for power generation.
- Supply chain – detailing key contractors regionally within FEED; line pipe; flow assurance, fittings & components; welding, operations & maintenance.
- Key projects – for each region, detailing the developers, countries involved, product, length, diameter and capacity.
- Cost breakdowns – individual market forecast for line pipe, right-of-way, fittings, pumping & compression stations and construction.
- Technical review – of the project process from pre-FEED, FEED through to engineering, procurement & construction (EPC) and operations & maintenance.
Why purchase the World Onshore Pipeline Market Forecast?
The World Onshore Pipeline Market Forecast 2015-2019 is essential for equipment manufacturers, onshore construction companies, steel mills, pipeline operators, oilfield service companies, government agencies, financial institutions and oil & gas companies who need quality, up-to-date information and commercial insight to assist with their strategy in the pipeline sector.
Our forecasts of activity in the onshore pipelines sector over the period 2015-2019 are driven by thorough scrutiny of identified fields/prospects within the Douglas-Westwood oil and gas database.
Consistent with Douglas-Westwood’s commitment to delivering value for our clients, all our market publications have a concise layout comprising industry background and supporting materials, condensed to enable quick review with ‘speed-read’ summaries of key points throughout.