LONDON -- The global recession has impacted the offshore oil and gas industry and the related pipeline market through the softening of energy demand and a reduction in available credit. Infield System’s fifth edition of the Global Perspectives Pipelines & Control Lines Market Update Report To 2014 highlights the return of liquidity and the signs of pick-up within the market and forecasts a steady growth of 6% over the next five years.
Since 2008, operators’ short-term strategies and forecast spends have been downgraded with the weakening energy demand and lack of available credit. The global recession has had many impacts on the market -- the industry will still feel the effects of this ‘downturn’ for the short-term future. However, there is still much potential for growth in the next five years and more, Infield says.
Pipeline and control line installations have mirrored the trends of the greater offshore oil and gas industry. Infield expects pipeline and control line capital expenditure to exceed $269 billion over the next five years. This equates to 79,799 km (49,585 mi) of lines, of which 55,900 km (34,735 mi) will be pipelines, and 23,899 km (14,850 mi) will be control lines. Combined, pipeline and control line installations are expected to see relatively steady growth in the next five years, equating to a compound annual growth rate (CAGR) of over 6%. The previous five years did not see such a high growth due to the downturn. While a global pick-up is expected, in some cases extended growth will depend on the market sector, field developments, and energy requirements of each region.
The subsea umbilicals, risers, and flowlines (SURF) market sector is expected to overtake the conventional line market in the forecast period for the first time. The growth in the SURF market is driven by a number of large regional developments, including long subsea gas tiebacks in North West Australia, deepwater block developments in Angola, flexible installations in the pre-salt basins of Brazil, and subsea to shore lines in Asia and Europe. While this growth is indicative of the industry’s trend to discover and develop deeper water reserves, the shallow water developments still hold potential, Infield says. This is highlighted by the strength of the conventional pipeline installation market, although at slower growth rates than the SURF market.
The trunk/export lines sector will represent the highest percentage growth rate amongst all sectors. While this growth characterizes the increasing global demand to diversify the location and type of energy supplies, installation of trunk lines is highly dependent on a number of political, environmental, and economical factors. As such, trunk/export lines represent the most volatile section of the pipeline market, and will likely be the most widely affected by the global downturn and the subsequent pick up.
Control lines represent just 30% of the installation market in the forecast period. Growth in this market is mainly attributable to an increase in umbilical installations. Additionally, growth in power lines will begin to influence the market, including lines which are directly associated with the production end of the offshore oil and gas industry and the inter-regional distribution of the power it generates.