Onshore Pipelines Forecast – Operations and Maintenance Activity to Boost Spend
Now in its 6th edition, The World Onshore Pipelines Market Forecast 2017-2021 from Douglas-Westwood (DW), considers the prospects for the onshore pipelines construction business and values the future capital expenditure (Capex) and operating expenditure (Opex) markets through to 2021 by key component/segment, region, pipeline product and diameter.
The publication provides an outlook for a sector that has been negatively impacted by the sustained low oil price environment, whereby reduced investment in early feasibility and front-end engineering and design (FEED) work is expected to impact the latter years of the forecast period. However, overall expenditure is expected to be bolstered by greater installation activity in the near-term, due to projects that were sanctioned prior to the downturn.
As a result, DW expects total onshore pipeline Capex over the forecast period to increase slightly to $203 billion (bn), a rise of 5% compared with $194bn over the preceding five-year period. Pipeline additions are predicted to increase overall, compared to 2012-2016, though many regions will see declines during the forecast. Global installed kilometres (km) over the forecast will total over 276,000km, representing an increase of 2% compared to the previous five-year period.
North America and Asia remain the highest volume markets, together accounting for approximately 53% of global Capex over the forecast period. Australasia, having seen a large increase in installations over recent years due to the number of LNG projects in the area, is expected to see a significant decline in Capex as a number of these projects begin operations mid-forecast. Eastern Europe & FSU is expected to be the most resilient pipeline market, with 2021 expenditure of around $5.6bn seeing only a 7% decline from $6bn in 2017, owing to key pipeline projects such as Power of Siberia 1 and 2.
The operations and maintenance market has a more positive outlook, as the majority of regions already possess a large installed base of pipeline. Total Opex is expected to be approximately $132bn over the 2017-2021 period, compared to $114bn in the preceding five years, representing a 16% increase. Unlike Capex, this sector is somewhat sheltered by stringent pipeline regulations and the need to continue operations. North America will see the greatest operations and maintenance expenditure – 37% of total Opex during the forecast – due to the region having the largest installed base. More than half of the $10.5bn Opex expenditure in North America will be associated with pipeline operation costs (covering routine expenditure associated with the day-to-day operation of the pipeline facility, including monitoring, routine pigging, and cleaning), due to ageing infrastructure and more stringent pipeline regulations, whilst a quarter of it will be linked to station costs.
The World Onshore Pipeline Market Forecast 2017-2021 presents a ‘bottom-up’ (pipeline-by-pipeline) analysis of the sector with extensive industry interviews to give a granular and realistic evaluation of current and expected activity in the sector. This report analyses the current pipelines under construction and planned using the DW in-house database and external sources, and has extrapolated future installations using regression analysis to accurately capture the onshore pipeline Capex and Opex markets.
The Report includes:
- Regional forecasts – Capex and Opex within each region, including examples of notable projects and operators, as well as key countries within the region.
- Key drivers – discussion of factors encouraging onshore pipeline market growth including oil & gas supply and demand, commodity prices, major challenges to installation activity, and the changing energy mix and move towards gas for power generation.
- Supply chain – detailing key contractors regionally within FEED; line pipe; flow assurance, fittings & components; welding, integrity management, specialist providers (inspection, corrosion etc.), component manufacturers & suppliers, as well as key contractors within the O&M supply chain.
- Key projects – for each region, detailing the developers, countries involved, product, length, diameter and capacity.
- Capex cost breakdowns – individual market forecast for line pipe, right-of-way, fittings, stations and construction.
- Opex cost breakdowns – individual market forecast for operations, integrity management, technical & land management support and stations.
- 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?
DW’s market forecasting is trusted by sector players worldwide, with clients including the world’s top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms.
An essential report 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 proven approach includes:
- Unique and proprietary data – updated year-round from published sources and insight gained from industry consultation.
- Detailed methodology – the report is drawn from DW’s in-house database, as well as external sources, which enable the forecasts to be constructed on a project-by-project basis, taking into account factors such as progress to date, project size, location and other complications. Regression analysis has been used in order to provide an accurate representation of the market over the forecast period.
- Comprehensive market forecasts – examination, analysis and 10-year coverage of expenditure.
- Concise report layout – consistent with DW’s commitment to delivering value for our clients, all our market forecasts have a concise layout consisting of industry background and supporting materials condensed to enable quick review with ‘speed-read’ summaries of key points throughout.
