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World Onshore Pipelines Market Forecast 2015-2019

$7975 - $7975

Release Date

12-08-2015

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PDF

Geographical Coverage

Global

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Stuck in the Pipeline – Project Delays Hit Industry Outlook
Author, Matt Loffman, commented, “This represents a 14% increase on the previous five-year period. The substantial fall in oil
prices has weakened the onshore market, causing project delays and a focus on reducing costs for pipeline owners. Despite this,
the delays we have observed have a different complexion to other oilfield sectors and have been limited in large part to the North
America region.
“In general, the onshore pipeline construction market is fairly insulated from commodity price fluctuations when taking a global
perspective. There are delays relating to a reduction in the rate of growth in major non-OECD economies in addition to falling US
unconventional production figures. However these are offset to a large extent by major transmission lines and demand growth in
the Middle East and Latin America.”
Research Team Leader, Hannah Lewendon, concluded, “The team has performed a full refresh of the market model with the
latest DW data. The methodology has been revised and sense-checked through extensive consultation with industry in each
global region. On a regional basis the Middle East continues to be a bright spot where solid growth is anticipated. As other
developing regions increase their infrastructure footprint we expect pipeline construction to remain important.
“Other observable trends include a shifting towards large diameter lines over the past three years. This is expected to continue to
2016 but in 2017 and beyond, smaller diameter pipelines are expected to gain relative market share driven by maturing networks
within population centres of non-OECD countries and a return of US onshore production growth. Investment in LNG infrastructure
and a move towards gas as a power source is also a key factor in future pipeline construction. We anticipate 66% of installed lines
between now and 2019 to transport natural gas.”
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.

Key Trends

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).

Key Themes

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.

1 Summary & Conclusions 7
Summary ….. 8
Conclusions 9

2 Macro Drivers … 10
Population & GDP Growth Drive Energy Demand .11
The Energy Mix …12
Oil Price Volatility …..13
Regional Production – Consumption Balances …14
Challenges 15

3 Technical Review …. 16
Project Process …17
FEED: Overview ..18
FEED: Route Selection ..19
Limitations and Alternative Transport Methods .41

4 Supply Chain 42
Supply Chain Map 43
Line Pipe Contractors ….44
Key Contractors .46

5 Market Outlook 47
Methodology & Limitations .48
Global Market: Outlook & Key Trends ….49
Africa: Outlook & Key Trends .. 50
Asia: Outlook & Key Trends …..51
Australasia: Outlook & Key Trends …..52
Eastern Europe & FSU: Outlook & Key Trends ..53
Latin America: Outlook & Key Trends …..54
Middle East: Outlook & Key Trends ….55
North America: Outlook & Key Trends …56
Western Europe: Outlook & Key Trends 57

6 Major Project Overview … 58
Africa: Key Pipelines 59
Africa: Key Pipelines 60
Asia: Key Pipelines …61
Asia: Key Pipelines …62
Australasia: Key Pipelines …63
Eastern Europe & FSU: Key Pipelines 64
Eastern Europe & FSU: Key Pipelines 65
Latin America: Key Pipelines …66
Latin America: Key Pipelines …67
Middle East: Key Pipelines ..68
Middle East: Key Pipelines ..69
North America: Key Pipelines .70
North America: Key Pipelines .71
Western Europe: Key Pipelines ….72

7 Appendix 73
Data and Text Conventions 74

Table 1: Geographic Information Systems Software Packages 19
Table 2: General Material Selection for Pipelines in oil & gas Industry 24
Table 3: Pipeline Materials and their Typical Limitations 26
Table 4: Materials for Process and Utility Use 26
Table 5: Guidelines for H2S Limits for Generic CRA Classes 27
Table 6: Corrosion Resistant Alloy Types 29
Table 7: Organisations governing Pipeline Materials and Relevant Codes & Standards 32
Table 8: Structural Material Selection 33
Table 9: Common ASTM Steel Pipe Specifications 33
Table 10: Pipeline Control Systems 38
Table 11: Line Pipe Contractors 44
Table 12: Key Contractors 46
Table 13: DW Product Classification 48
Table 14: Global Market Outlook by Capex and Length 49
Table 15: Africa Market Outlook by Capex and Length 50
Table 16: Asia Market Outlook by Capex and Length 51
Table 17: Australasia Market Outlook by Capex and Length 52
Table 18: Eastern Europe & FSU Market Outlook by Capex and Length 53
Table 19: Latin America Market Outlook by Capex and Length 54
Table 20: Middle East Market Outlook by Capex and Length55
Table 21: North America Market Outlook by Capex and Length 56
Table 22: Western Europe Market Outlook by Capex and Length 57Figure 1: Global Expenditure 2010-2019 11
Figure 2: Global Kilometres Installed by Diameter Range Indexed to 2010 11
Figure 3: Global Market Outlook by Region 2015-2019 11
Figure 4: Global Population Growth & Energy Demand, 1965-2015 14
Figure 5: Historic Primary Energy Demand by Region 14
Figure 6: The Changing Energy Mix 15
Figure 7: World Liquids Production Growth, 2005-2014 15
Figure 8: Historical Brent and WTI Oil Prices, January 2007 – February 2015 16
Figure 9: Brent Annual Average Spot Price Forecasts, 2010 – 2020 16
Figure 10: Regional Balance in oil & gas by Region in 2010 and 2030 (mtoe) 17
Figure 11: US Steel Price, January 2004 – June 2015 18
Figure 12: FEED Components 21
Figure 13: GIS Data Sample22
Figure 14: GE PipeView Exchange Platform 23
Figure 15: Main Components of Pipeline Project Facilitation Tool 23
Figure 16: United States Interstate Natural Gas System Mainline Compressor Stations 25
Figure 17: Safe Operating Temperatures of 13 Chromium Stainless Steel 28
Figure 18: Limits for 13 Chromium in Sour Service Environment 28
Figure 19: Corrosion Resistant Alloy Types 32
Figure 20: External Corrosion Direct Assessment Flowchart (Part 1) 33
Figure 21: External Corrosion Direct Assessment Flowchart (Part 2) 34
Figure 22: Pipeline Components 37
Figure 23: Construction Process 40
Figure 24: GEOPIG 43
Figure 25: Onstream Combination Inspection Tool 43
Figure 26: Alternative Transport Methods 44
Figure 27: Onshore Pipelines Supply Chain 46
Figure 28: Global pipeline length installed annually 51
Figure 29: Global Market Outlook by Capex and Length 52
Figure 30: Annual Installed Length by Product 52
Figure 31: Global Historic and Forecast Capex by Region 52
Figure 32: Market Outlook by Capex and Length in Africa 53
Figure 33: Annual Installed Length by Product in Africa 53
Figure 34: Africa Historic and Forecast Length by Diameter 53
Figure 35: Market Outlook by Capex and Length in Asia 54
Figure 36: Annual Installed Length by Product in Asia 54
Figure 37: Asia Historic and Forecast Length by Diameter 54
Figure 38: Market Outlook by Capex and Length in Australasia 55
Figure 39: Annual Installed Length by Product in Australasia 55
Figure 40: Australasia Historic and Forecast Length by Diameter 55
Figure 41: Market Outlook by Capex and Length in Eastern Europe & FSU 56
Figure 42: Annual Installed Length by Product in Eastern Europe & FSU 56
Figure 43: Eastern Europe & FSU Historic and Forecast Length by Diameter 56
Figure 44: Market Outlook by Capex and Length in Latin America 57
Figure 45: Annual Installed Length by Product in Latin America 57
Figure 46: Latin America Historic and Forecast Length by Diameter 57
Figure 47: Market Outlook by Capex and Length in Middle East 58
Figure 48: Annual Installed Length by Product in Middle East58
Figure 49: Middle East Historic and Forecast Length by Diameter 58
Figure 50: Market Outlook by Capex and Length in North America 59
Figure 51: Annual Installed Length by Product in North America 59
Figure 52: North America Historic and Forecast Length by Diameter 59
Figure 53: Market Outlook by Capex and Length in Western Europe 60
Figure 54: Annual Installed Length by Product in Western Europe 60
Figure 55: Western Europe Historic and Forecast Length by Diameter 60

Publisher

Douglas-Westwood Ltd