Onshore Pipelines – Major Additions to Pipeline Capacity Planned Globally
The pipeline industry is set to offer a substantial market for the forecast period 2009-2013. There are plans for major additions to pipeline capacity across the world. Douglas-Westwood’s latest edition of the World Onshore Pipelines Market Report 2009-2013 forecasts that almost 139 thousand kilometres of hydrocarbons trunk pipelines will be constructed over the period 2009-2013 with a total capital cost exceeding $144 billion, a 5% increase on 2004-2008. Gas pipelines will dominate, totaling 63% of global Capex over the period.
Douglas-Westwood’s Chairman, John Westwood, commented, “Investment in gas pipelines is underpinning the considerable expenditure in the global onshore pipelines market as nations look to diversify their gas supply. Globally, over $91.4 billion is expected to be required to install over 80 thousand kilometres of gas pipelines – accounting for 63% of total global Capex and 58% of overall installation length."
Analyst, Alex Pearce, added, “The most significant growth in length installed and associated Capex will be seen for pipelines with diameters in the range of 54 inches or larger. This trend is driven by a global growth in long large-diameter export and cross-country pipeline projects to help meet the challenges of growing energy demand, shifting natural gas production concentrations and energy supply security.
“Regionally, the focus for development activity will be concentrated in Asia, Eastern Europe & FSU, and North America, which will account for 74% of total Capex over the period 2008 to 2012. However, we expect the Middle East to experience a sizeable growth in pipelines investment, accounting for 12% of the forecast global Capex.
“Beyond 2009 the onshore pipelines market is set for a downturn in annual Capex, largely due to delays in project execution – particularly large transnational and transcontinental pipeline proposals – rather than being indicative of any long-term market trends. Such delays are typical for large-scale projects, but issues relating toproduct prices and the credit crunch are now also impacting current pipeline proposals.”
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