The global oil and gas pipeline market is expected to register a CAGR of more than 6% during the period of 2020-2025. According to the International Energy Agency (IEA), the demand for oil is expected to rise by around 1 million barrels per day (bpd) on an average every year till 2025, from 97 million bpd in 2018. In a bid to meet the rising consumption of oil and gas, the pipeline capacities are being expanded and new pipeline projects are being commissioned. Moreover, increase in offshore activities, such as deepwater and ultra-deepwater production and development, are driving the oil and gas pipeline market. However, the global shift toward renewable sources for electricity generation poses as a huge threat for the oil and gas demand, which is likely to be a major challenge for the growth of oil and gas pipelines installation in the coming years.
- The availability of abundant natural gas reserves and the lower cost in comparison to other fossil fuel types, among others, are expected to supplement the demand for natural gas from multiple end-use sectors, including power generation, during the forecast period. This, in turn, is expected to boost the gas pipeline market in the coming years.
- Russia and Pakistan have agreed to build a new gas carrying pipeline worth USD 2 billion. Additionally, India and Russia also signed a deal worth USD 40 billion on natural gas exports to India. Russia being a significant exporter is paving the way for pipeline industry to grow more, and this also presents an opportunity for the market players during the forecast period.
- Growing oil and gas demand in Asia–Pacific holds immense potential for the oil and gas pipeline market, and it is the fastest growing market. China and India have been largest consumers of oil and gas in the Asia-Pacific region, and pipeline network is growing at a significant pace in both of these countries.
Key Market Trends
The Gas Pipeline Segment to Dominate the Market
- The global demand for natural gas is expected to increase by 1.6%, y-o-y, for the next five years, with the consumption reaching almost 4,250 billion cubic meter (bcm) by 2025, up from 3,850 bcm in 2018. Therefore, the natural gas pipeline network is expected to grow in parallel to the increase in natural gas demand.
- By 2030, owing to factors, such as environmental benefits and quest for energy security in regions, such as Asia-Pacific, the consumption of natural gas is expected to witness the fastest growth among all fuel types, which, in turn, is expected to drive the pipeline market.
- With exports of 104.8 billion cubic meters in 2018, Qatar continued to be the largest LNG exporter, a position it has now held for over a decade. The LNG trade is expected to witness a significant increase across the world, resulting in increased demand for natural gas pipeline network as well.
- The extraction of new sources of natural gas, such as shale gas deposits, and the resulting price pressure are increasing the international trade of natural gas; hence, transport and storage volumes are similarly rising. These developments are expected to consequently result in increasing the demand for pipeline network expansion as well.
Asia-Pacific to Dominate the Market
- The energy consumption in Asia-Pacific is expected to grow by 48% over the next three decades. This has led the oil and gas pipeline market to be the fastest growing among other regions.
- According to the IEA, China is expected to contribute 30% of the world’s energy increase until 2025. Moreover, natural gas imports have been continuously rising in China, and it reached 80 bcm in 2018, to meet the increasing domestic demand.
- China’s state-owned firms, including CNPC and China National Offshore Oil Corporation have plans to maximize production at local gas fields, which is further driving the pipeline demand in the region.
- India is also modifying its gas pipeline infrastructure to meet the growing demand. According to the Petroleum and Gas Regulatory Board (PNGRB), the natural gas pipeline infrastructure is expected to grow to about 28,000 km in length during the forecast years.
- Therefore, the increasing demand and new pipeline infrastructure in Asia-Pacific are some of the major factors that are driving the oil and gas pipeline market growth.
The oil and gas pipeline market is moderately consolidated. Some of the key players in this market include Nippon Steel & Sumitomo Metal, Tenaris Inc., TMK Group, Baker Hughes Co., and Mott Macdonald Group Ltd.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support