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World Onshore Pipelines
Market Forecast 2015-2019energy business insight
e: research@douglaswestwood.com t: +44 (0)203 479...
World Onshore Pipelines
Market Forecast 2015-2019energy business insight
e: research@douglaswestwood.com t: +44 (0)203 479...
2015 World Onshore Pipelines
Market Forecast
Prospects, Technologies, World Markets
2015-2019
© 2015 Douglas-Westwood 2World Onshore Pipelines Market Forecast 2015-2019
By purchasing this document, your organisation ...
© 2015 Douglas-Westwood 3World Onshore Pipelines Market Forecast 2015-2019
By purchasing this document, your organisation ...
© 2015 Douglas-Westwood 4World Onshore Pipelines Market Forecast 2015-2019
By purchasing this document, your organisation ...
© 2015 Douglas-Westwood 5World Onshore Pipelines Market Forecast 2015-2019
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World Onshore Pipelines Market Forecast 2015-2019 Leaflet + Contents

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.

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World Onshore Pipelines Market Forecast 2015-2019 Leaflet + Contents

  1. 1. World Onshore Pipelines Market Forecast 2015-2019energy business insight e: research@douglaswestwood.com t: +44 (0)203 4799 505 www.douglas-westwood.com Aberdeen | Faversham | Houston | London | Singapore © 2015 Douglas-Westwood 60 World Onshore Pipelines Market Forecast 2015-2019 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od Africa: Key Pipelines Chapter 6 : Major Project Overview The Gaso duto do Norte ao Sul de Moça m- bique (GAS NOS U) Proje ct would connect the north ern Moza mbique Rovu ma Basin with Mapu to and possibly South Africa. Gigajoule spent 18 mont hs considerin g the economic viability of an LNG proje ct aimed at supplying gas to Moza mbique but found that a large-diam eter north -sout h pipeline would be a more economical optio n. A pipeline also has the added benefit of being able to supply markets other than large port cities with gas. Techn ical and economic feasib ility studies comp leted in 2014 found that the proposed pipeline to Richa rds Bay in South Africa with a 5,000 MW powe r statio n at the end would be economically viable . The proje ct would also help alleviate a South African electricity supply crisis and is seen as a cheap er and more environme ntally friend ly altern ative to building a third coal-fired powe r statio n. However, the South African governme nt does not curre ntly see GASN OSU as a so- lution to their problems and does not plan to go ahead with the proje ct. As a result, the less ambitious pipeline endin g at Ma- puto rema ins more likely but the possibility for a South African exten sion at a later time is still a possibility. The plann ed Juba to Djibo uti pipeline is considered an altern ative to South Sudan’s curre nt expo rt pipeline which passe s throu gh Sudan. Sudan has repea tedly threa tened to shut South Sudan out of the pipeline over argum ents regarding transit fees. Adding further strain to the relationship between the countries, Sudan has accus ed South Sudan of supporting rebels and claims that Sudan is stealing oil directly from the pipeline. South Sudan has been looking for altern a- tive ways to expo rt their oil and considered route s throu gh Kenya and Djibo uti. Sudan decid ed on the Djibo uti route as it is short er and more economical.Attra cting exter nal investors continues to be a struggle in the region. Receiving investmen t from the West for a proje ct this size in a country with little in terms of basic infras tructure is partic ularly challe nging . In the East, China would have to choose between Sudan or South Sudan, some thing it is unwilling to do. Zimbabwe Mo zamb iqu e Rovum a Mapu to Basin Tanzania Mad ag asca r Zambia Malawi South Africa S.Sudan DR of Congo Nairobi Juba Djibouti SomaliaUganda Kenya Ethiopia Map is for illustra tive purpo ses only Map is for illustra tive purpo ses only GASN OSU Developer: Gigajo ule Intern ationa l & ENH Coun tries: Moza mbique, South Africa Product: GasCons truction: 2016-2018Lengt h: 2,450 kmDiam eter: LargeAnnu al Capacity: n/a Juba to Djibouti pipelineDeve loper : n/aCoun tries: South Sudan , Ethiop ia, Djibouti Product: OilCons truction: 2018-2020 (est.)Lengt h: 1,700 kmDiam eter: 26”Annu al Capacity: n/a • Prospects • Technologies • Markets © 2015 Douglas-Westwood 35 World Onshore Pipelines Market Forecast 2015-2019 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od EPC: Key Components – DW Capex Chapter 3 : Technical Review Function: To operate valves by mech anical mean s. Desc riptio n: Actuators have significant benefits when linked to the pipeline contr ol and system. How it work s: The mech anical action will either be driven by an electric moto r, comp ressed air drivin g a cylind er by hydra ulic fluid or by using the gas in the pipeline itself. The Rotork Fluid Syste m has actua tors designed to be powe red by pipeline gas with either oil press ure or direct gas meth ods. Actu ator (Stat ion Equip ment ) Function: To stop or restrict flow within a pipeline for inspe ction, repair and maintenan ce (IRM) opera- tions. Desc riptio n: Materials for valves are chose n based on press ure, temp eratu re and properties of the product to be contr olled. Corrosive or erosive products may requi re a comp romis e in material selection, exotic alloys , or body coatings to minim ise these material intera ctions and exten d the life of the valve or com- pone nts. Typically, carbo n steel alloys are specified for non-c orros ive applic ations. How it work s: Gate Valve : used to block flow comp letely to redirect flow or isolat e a sectio n for IRM. The ‘gate’ in a gate valve is a slab of metal which is mova ble within a frame by mean s of a threa ded rod. This rod is con- necte d directly or indire ctly to a turnin g whee l and possibly to a mech anical actua tor mech anism . Glob e Valve : used to contr ol flow rate. They are name d after their spher ical shape with the two halve s of the body being separ ated by an intern al baffle which has an open ing that forms the seat onto which a mova ble plug can be fasten ed. The sectio n of the plug that protr udes into the flow will cause frictio n and thus can be used to contr ol flow rates. Othe r types : ball valve and plug valve used for isolat ion, butte rfly valve and diaph ragm valve used for isolat ion as well as flow contr ol; check valve used for preve nting rever se flow; and press ure relief valve used for releasing excessive press ure. Valve s (Stat ion Equip ment ) Function: To join straig ht pipe sectio ns toget her if they have differ ent sizes Othe r times , fitting s are used instea d of welding so that flow regulation and maintenan ce operation can be carrie d out Desc riptio n: Fittings are classified accor ding to their shape s, which in turn imply the usage . The most com- mon types are: elbow , tee, coupling, union and cap. Materials for a fitting vary based on the materials of the pipeline the fitting is attached to and its function. The comm on materials includ e carbo n steel, copper and cast iron. How it work s: Elbow s allow the pipe to chang e direc- tion, usually in the 90° or 45° angle . Tees are used to transport two-phase fluid mixtu res. Split tees are specially designed for hot tapping, a proce ss in which maintenan ce or modi ficatio n can be done to a pipeline witho ut interr upting its flow. Coup lings connect two pipes to each other ; they are called reducers if the pipe sizes are differ ent. Caps act as a prote ctive devic e to cover the end of a pipeline. Fittin gs Function: To carry the product Desc riptio n: Indus trial line pipe used to transport hydro carbo n are usually made from carbo n steel, chrom ium, GRP, nicke l alloys and other alloys . How it work s: Line pipe are manu factured in parts to be later joined by fitting s. Specifications such as diameter and wall thickn ess will vary accor ding to the techn ical requi reme nts of the carrie d product. Line Pipe © 2015 Douglas-Westwood 41 World Onshore Pipelines Market Forecast 2015-2019 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od Limitations and Alternative Transport Methods Chapter 3 : Technical Review Onsh ore pipelines can be const rained by economic, techn ical, geogr aphic al and geopolitical limita tions.The limita tions might make altern ative transporta tion meth ods by rail, road and/o r FPSO /FLNG/LN G carrie rs much attractive optio ns. Onshore pipeline limitations While onshore pipelines have helpe d in transporting oil, gas and condensat es on- shore , they are not witho ut limita tions. Some key limita tions includ e economic viability, poten tial negat ive environme ntal impacts, land-space , techn ical const raints , attacks and geopolitica l limita tions.Economic viabil ity is a key considerat ion in decid ing on transporta tion solution. Cons tructing an onshore pipeline requi res a high-Cape x investmen t, which can be limitin g when funds are insuff icient or capital is difficu lt to raise. Howerver , the operating Opex can be considerab ly lower than alter- native transport meth ods. In certain cases , altern ative transporta tion meth ods (road or rail) may not be feasib le due to geographi- cal const raints . Additionally, oil & gas price fluctu ation can also impact the economic viability of onshore pipeline proje cts.Envir onme ntal considera tions can limit the const ructio n of pipelines which impacts the flora and fauna of the surro undin g environ- ment . This is typica lly oppo sed politically and such proje cts are often lobbied against by the local comm unitie s. Land-spac e constraints can be limitin g to the const ructio n of pipelines. Where space is a concern, onshore pipeline const ructio n can be difficu lt partic ularly in the acqui sition of rights -of-w ay or land. Geog raphi cal & Technical constraints can impair the ability to const ruct onshore pipe- lines. Various drillin g meth ods and const ruc- tion techn iques have been developed such as horizontal directional drillin g in cases wher e excav ations and diggin g of trenc hes can prove to be difficu lt. Geop olitical and political issues can threa ten onshore pipeline proje cts. A case in point is in Myan mar wher e there exists energ y-security concerns in relation to Thailand, India and China .Terro rist attacks on pipelines do happen and can threa ten the go-ah ead for onshore pipeline proje cts, espec ially for large cross - region transport pipelines. Additional costs imple ment ing pipeline secur ity meas ures might be a deter rent for onshore proje cts. Terro rist organ isatio ns often target onshore pipelines to threa ten the intern al stabil- ity of regim es and to cut off vital energ y sourc es. They can also threa ten to sabot age pipelines until dema nds are met, effectively holding the pipeline at ranso m Alternative transport methods Alternative transporta tion meth ods are used when onshore pipeline transporta - tion is not economically, techn ically or geographically viable . Rail is a flexib le and scalab le transporta tion meth od for oil, partic ularly when new pipe- line proje cts are facing public oppo sition (usua lly relating to environme ntal dama ge concerns). Companie s such as South ern Pacific Trans porta tion provi de such servic es. Rail transporta tion can be const rained by geography and land obstr uctions includ ing moun tains and water bodie s. However, rail transporta tion can result in significant accidents. Road transporta tion includ ing vehic le trans- porta tion via tanke rs, trucks and other ve- hicles are plausible optio ns wher e distan ces are short and when it is economically viable to do so. Road transporta tion meth ods are usually used locally. Simila r to rail transport, road transporta tion may be limite d to land geography and any route obstr uctions. FPSO /FLNG/LN G Carriers Floating carrie rs such as the Floating Production Stora ge & Offlo ading (FPSO ), Floating Lique fied Natural Gas (FLN G) and Lique fied Natural Gas (LNG ) are viable op- tions wher e materials are to be transporte d acros s water bodie s. They are prefe rred altern atives over onshore pipelines when the transporta tion costs of floating carrie rs are more attrac tive than building onshore pipelines. Rail Road FPSO / FLNG / LNG Carr ier Alter nativ e Trans port Meth ods Figure 25: Altern ative Transport Methods © 2015 Douglas-Westwood 17 World Onshore Pipelines Market Forecast 2015-2019 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od Project ProcessChapter 3 : Technical Review Feasibility Assessment Feasibility analysis surve ys the poten tial route and assesses the poten tial and obsta - cles in the proposed route . Geop hysical Analy sis Geop hysical studies are conducted throu gh drive along , walk along and aerial surve ys. These assess the geolo gical and environ- ment al feasib ility of the proposed route . Gove rnme nt and Regulatory Appr ovals Oper ators will often have to seek local governme nt and regulators’ appro val for the go-ah ead. This proce ss some times involv e local comm unity surve ys and legal advisors. Right s of Ways and Land Acqu isition Rights of way are acqui red within the desired route path. At times , the land will have to be acqui red. This proce ss often involv e legal consu ltants . Key Components The key comp onents includ e line pipe, fitting s, statio n equip ment and storage facili- ties. These comp onents are often procu red prior to const ructio n. Oper ational Cont rol Syste ms These systems are designed to be centr es of super vision that receive data from all statio ns along the pipeline and send orders back to those statio ns Procedure s O&M activities are governed by a set of stand ard proce dures developed and imple - ment ed by operators. Deco mmis sionin g Conc erns pipelines or parts of pipelines remo ved due to corro sion, pipeline dam- ages or reservoir press ure issues. Regulatory and governme nt bodie s have the optio n to enact a decommis sionin g progr amme. It seeks to ensur e that the decommis sione d pipeline is not a risk to the environme nt or the local comm unity by enfor cing surve y and maintenan ce follow ups. Route Selec tion This requi res the utilisa tion of systems such as remo tely sense d data and GIS and will have to consider the route obstr uctions and corre sponding rights of way and land acqui sition . Environme ntal and safety considerat ions are also key in this proce ss. Pipeline Calcu lation s Desig n data and mech anical calculation s are integral in the pipeline engin eering proce ss. This would involv e operat- ing, environme ntal and line pipe data. Key Materials Material selection forms a crucial part the FEED proce ss. Cons iderations for this includ e selection criter ia, coatings & corro sion assessmen t, qualit y assessmen t and stand ards & specificatio ns. Cons truction Route Prepa ration Route clearance involv es remo val of veget ation and obstr uction as well as transporta tion of the const ructio n equip - ment to the site of the pipeline route . Digging of trenc hes takes place once the route has been prepa red and cleared of any obstr uctions. Depe nding on the site conditions , differ ent drillin g techn iques may also be used such as horizontal directional drillin g, micro - tunne lling. Pipe Installation Pipe installation steps includ e: string ing and bending, welding & coating and lowering & backf illing. If the line pipe is an exten sion, it will be tied-in to existi ng facilities Comm issioning The last stage of the pipeline const ructio n proce ss involv es hydro static testin g and land resto ration . Most pipelines will be tested for leaks hydro static ally or pneumatic ally by monitoring press ure. Once all testin g and work s are comp leted, the const ructio n crew will reinstate the site to the origin al conditions as much as feasib le. FEED Pre-FEED O&M EPC Decommissioning © 2015 Douglas-Westwood 52 World Onshore Pipelines Market Forecast 2015-2019 By purch asing this docum ent, your organ isation agree s that it will not copy or allow to be copied in part or whole or otherwise circula ted in any form any of the contents without the writte n permission of Douglas-W estwo od Australasia: Outlook & Key Trends Chapter 5 : Market Outlook Pipeline const ructio n and expenditure will continue to rise in Austr alasia , led in large part by gas activity (conv en- tional, CBM and CSG) in Austr alia.A numb er of significant natur al gas proje cts are expected to come on- stream in the coming years – increas- ing the need for onshore infras truc- ture. There is an observable shift towards medium diameter pipelines in the region. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 InstalledKM(thousand) Capex($bn ) Capex Km installed Robust grow thAustr alasia is a concentra ted but grow ing market. An uptick in activity is expected over the forec ast perio d follow ing a const ructio n spike in 2012. Installation s are expected to grow from km this year to km by 2019. Expenditure will be greatest in Austr alia, with % of spend ing in 2015. The secon d largest region on this basis will be Papua New Guinea. The key driver for grow th in this market is the need for pipeline infras tructure to bring gas from fields to feed LNG plants. This will requi re developm ent over the entire forec ast perio d. Gas dominanceThe Austr alasia n market has alway s been domi nated by gas pipelines and this trend is expected to continue. In addition to conventio nal natur al gas, this region also has exten sive coal bed meth ane (CBM ) outpu t to diversify its gas product portfolio.Shift towards medium diameter Durin g the forec ast perio d, the medium range of 24-41 ” will increase its propor- tion of the market comp ared with the <24” range and will accou nt for % of the proje cted installation base. The proportion of large range pipe, i.e. pipe of greater than 41”, will rema in neglig ible at %. 0% 20% 40% 60% 80% 100% 2010 2013 2016 2019 Gas Liquid % % % % % % 2010-2014 2015-2019 km km Table 17: Australasia Market Outlook by Capex and Length “Gas dema nd on the east coast of Austr alia will triple with newly com- missioned LNG proje cts.”Senio r Mana geme nt – Pipeline Oper ator <24" 24-41 " >41" CAP EX $mill ion 2014 2015 2016 2017 2018 2019 Cost Break down RoW Line Pipe Fitting s Statio n Const ructio nOther Costs Produ ct Gas Liquid Diam eter <24" 24-41 " >41" Total LENG TH km 2014 2015 2016 2017 2018 2019 Produ ct Gas Liquid Diam eter <24" 24-41 " >41" Total Histo ric Forec ast Figure 37: Market Outlook by Capex and Length in Australasia Figure 38: Annual Installed Length by Produ ct in Australasia Figure 39: Australasia Historic and Forecast Length by Diam eter © 2015 Douglas-Westwood 65World Onshore Pipelines Market Forecast 2015-2019 By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood Eastern Europe & FSU: Key Pipelines Chapter 6 : Major Project Overview The proposed pipeline would supply China and Korea with gas while allowing Russia to meet its Energy Strategy which aims to supply 20% of its gas exports to the Asia- Pacific region. Initially planned for 2008, the project has been delayed to 2016. In 2014 Russia wrote off 90% of North Korea’s debt to facilitate the building of the pipeline on the most economic of the three proposed routes. The preferred route is entirely onshore and passes through North Korea. A second proposed route passes through China and includes a subsea pipeline to South Korea. A third route runs from Russia directly to South Korea via a subsea section. With an- ticipation of realising this project, Russia will be the largest gas supplier to South Korea. From the short-term perspective, the interests of the three parties are aligned. The pipeline will help South Korea acquire natural gas at a better price and present North Korea an opportunity to prop up its economy as the project will offer an esti- mated $100 million in annual transit fees. Russia will gain access to a new market, enhance its role in increasing the energy se- curity of South Korea and mitigate tensions on the peninsula. In response to Western sanctions involving Ukraine, Russia is attempting to diversify its energy exports focusing on the East and shifting away reliance on European markets. North Korea and Russia, both under Western sanctions, seem to have been encouraged to strengthen diplomatic ties as a result of their similar situations. The move could also strengthen Moscow’s ties with Seoul and undermine American alliance building efforts in the Pacific. Differences in interests between the coun- tries have caused delays to a final agree- ment on pricing. A low price or export volume would not justify the field develop- ment cost for Russia while South Korea are negotiating for a lower price given their reliance on gas imports. Seoul is reluctant to rely on Pyongyang for energy imports but an insurance policy where North Korea would also be cut off should they decide to use the pipeline as political leverage has alleviated some concerns. However, increasingly strong ties between Moscow and Pyongyang, coupled with po- tential for Russia to meet many of its strate- gic and political goals, suggest that the line is more likely to be built than previously. Gazprom is a major partner for the proposed pipeline project given the firm’s expertise in long distance pipelines. Irkutsk Buryat Khabarovsk Vladivostok SeoulWeihai Beijing China Mongolia South Korea North Korea Japan Russia Map is for illustrative purposes only Russia – South Korea Developer: Gazprom Countries: Russia, South Korea Product: Gas Construction: 2016-2018 (est.) Length: 1,200km Diameter: 48” Annual Capacity: 10bcm Stuck in the Pipeline – Project Delays Hit Industry Outlook 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 ex- clusively in North America. The pipeline market itself is well-cushioned from short-term com- modity 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 preced- ing 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 sup- ply, and a shift in energy demand preferences towards gas. North America and Asia remain the highest vol- ume markets, together accounting for approxi- mately 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 expect- ed to support this scenario in the short-term.
  2. 2. World Onshore Pipelines Market Forecast 2015-2019energy business insight e: research@douglaswestwood.com t: +44 (0)203 4799 505 www.douglas-westwood.com Aberdeen | Faversham | Houston | London | Singapore To Order Complete the order form and mail, fax or email us your details. Payment: goods will only be dispatched on receipt of payment in full. A pre-payment invoice will be issued on request. Payment must be made in UK Pounds. Payment may be by a cheque drawn on a UK bank. Credit card owners: give full name and address of the cardholder and telephone number - you will not be billed until dispatch. Copyright: you agree that this report is the copyright of the authors; it is for use only within your own organisation, will not be made available in any form to third parties and will not be copied or transmitted electronically. Multiple copies: special prices are available on request for multiple PDF or hardcopies - please call or email for details. Executive Presentation Service: a PowerPoint-based presentation of the results of this report can be made by our analysts at your company offices for an additional fee. Please contact us for details. Name.........................................................................................Job Title............................................................................... Company.................................................................................................................................................................................. Deliver address....................................................................................................................................................................... Cardholders address............................................................................................................................................................. Card Number..........................................................................CCV number..........................Expiry date........................ Signature...................................................................................Email..................................................................................... Tel no.........................................................................................Fax......................................................................................... EU companies must give an EU VAT number.................................................................................................... Preferred format: Number of Users: PDF * Single User (1 copy) 5250 UK Pounds Hardcopy ** Multi-User (5 copies) 6250 UK Pounds Payment Method: Pre-payment invoice AMEX / MasterCard / Visa Order Form I understand that the study is copyright and for use only within my organisation. It will not be copied, or otherwise circulated to third parties or distributed electronically. (please tick) * VAT will be added when applicable ** Hardcopy deliveries outside the UK will be via DHL couriers at an additional cost of UK Pounds 60 The Douglas-Westwood Approach • Industry consultation – discussions with a wide range of companies including: opera- tors, EPC contractors, equipment manufac- turers, 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, loca- tion 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 pro- jects and operators within the region and countries with most activity. • Key drivers – discussion of factors en- couraging onshore pipeline market growth including the energy needed for industriali- sation 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 as- surance, 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 con- struction. • Technical review – of the project process from pre-FEED, FEED through to engineer- ing, procurement & construction (EPC) and operations & maintenance. ISBN 978-1-910045-21-3 "Essential reading" - Government Department "An amazing and comprehensive report" - Financial Analyst
  3. 3. 2015 World Onshore Pipelines Market Forecast Prospects, Technologies, World Markets 2015-2019
  4. 4. © 2015 Douglas-Westwood 2World Onshore Pipelines Market Forecast 2015-2019 By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood Contents Table of Contents 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
  5. 5. © 2015 Douglas-Westwood 3World Onshore Pipelines Market Forecast 2015-2019 By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood Contents Figures Figure 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 Sample....................................................................................................................................22 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 East..............................................................58 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
  6. 6. © 2015 Douglas-Westwood 4World Onshore Pipelines Market Forecast 2015-2019 By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood Contents Tables 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 Length..............................................................55 Table 21: North America Market Outlook by Capex and Length .....................................................56 Table 22: Western Europe Market Outlook by Capex and Length...................................................57
  7. 7. © 2015 Douglas-Westwood 5World Onshore Pipelines Market Forecast 2015-2019 By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood Notes & Acknowledgements About Us Disclaimer This report is a Douglas-Westwood (DW) study and all rights are reserved, whether this pertains to the body of the report or any information contained within. The information contained in this document is believed to be accurate, but no representation or warranty, express or implied, is made by Douglas-West- wood as to the completeness, accuracy or fairness of any information contained in it, and we do not accept any responsibility in relation to such information whether fact, opinion or conclusion that the reader may draw. The views expressed are those of the individual authors and do not necessarily represent those of the publisher. While we have made every attempt to ensure the information contained in this document has been obtained from reliable sources, Douglas-Westwood is not responsible for any errors or omissions, or for the results obtained from the use of this information. All informa- tion in this document is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, mer- chantability and fitness for a particular purpose. Nothing herein shall to any extent substitute for the independent investigations and the sound technical and business judgment of the reader. Laws and regulations are continually changing, and can be interpreted only in light of particular factual situations. World Onshore Pipelines Market Forecast is published by: Douglas-Westwood Limited, 20 East Street Faversham Kent ME13 8AS, UK tel: +44 203 4799 505 fax: +44 1795 594748 admin@douglaswestwood.com © Copyright Douglas-Westwood Limited 2015 By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of the publishers. Additional copies of this study may be purchased at a specially discounted rate. DW report number 564-15 ISBN 978-1-910045-21-3 Production Team Editor Rod Westwood rw@douglaswestwood.com Assistant Editor Matt Loffman ml@douglaswestwood.com Report Author Katy Smith kcs@douglaswestwood.com Layout & Graphic Design Oliver Solly os@douglaswestwood.com
  8. 8. © 2015 Douglas-Westwood 6World Onshore Pipelines Market Forecast 2015-2019 By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood Douglas-Westwood’s Offerings Notes & Acknowledgements About Us Established in 1990, Douglas-Westwood is a leading provider of market research and consulting services to the energy industry worldwide. We have completed over 1,000 projects for clients in more than 70 differ- ent countries and in some 250 niche energy segments. Our clients range from the oil & gas majors and their contractors to financial houses and governments. We are an independent organisation and our research is supported by proprietary data, insight and knowledge. Our international reach is backed up by one of the largest sector- focused teams in offices in the Americas, Europe and Asia. Douglas-Westwood clients include the world’s: Top-10 oil & gas companies Top-10 oilfield services companies “Energy experts Douglas-Westwood” The Guardian Consultancy With an extensive advisory team spanning three continents, Douglas-Westwood deliv- ers energy business consultancy services across the globe. DW consultancy services are focused on the strategic planning pro- cess, helping our clients to make investment decisions, develop and test advanced com- petitive strategies for new products, new business streams, mergers and acquisitions, We provide consultancy services through advanced market insight, modelling and simulation to a client base which includes players in oil & gas E&P, oilfield services, conventional & renewable energy and the public sector. Douglas-Westwood has supplied con- sultancy services to over 250 companies worldwide. “Foremost oilfield services market consultant” Hong Kong client Transactions Douglas-Westwood provides sector- focused commercial due-diligence and transactions services to major and mid-tier private equity firms, investment banks and debt providers. We have industry- leading credentials including both buy-side and sell-side mandates, public-to-private transactions, re-financing, IPOs and project financing ranging in enterprise value from $5 million technology firms to $1 billion oilfield service, engineering and equipment companies. Douglas-Westwood clients include the world’s: Top-10 private equity firms Top-10 investment banks “Douglas-Westwood provides great value to us” Perth client Research Business research, analysis and market forecasting is our core activity. Over the years we have built a huge knowledge base of both sectors and players. Our experience of researching the oilfield services sector (OFS) is unparalleled worldwide. We spe- cialise in emerging markets and technolo- gies, from offshore windpower to subsea processing and difficult to access markets and geographies including Russia and the Middle East. Our custom research offerings include: gathering & analysis of market data, independent marketing and forecasting, measurement & analysis of competitive po- sitions and industry consultation & in-depth perception surveys. Douglas-Westwood have researched some 250 different business sectors to wide international acclaim. “Top energy research group Douglas-Westwood” Financial Times Publications Douglas-Westwood produces original en- ergy business market studies and forecasts, now highly acclaimed and used worldwide. In oil & gas we were the first firm to forecast & value the growth of key offshore markets such as deepwater, subsea produc- tion, global onshore drilling, pipelines and offshore wind power. Our reports are geared to meet senior executives’ needs in business planning and decision-making and assume no previous reader knowledge of the subject area. Each offers a concise, region by region format. Analysis is based on our extensive in-house project databases and models combined with forecasting expertise developed over many years. Douglas-Westwood has over 20 energy sector market forecast titles in print. “An excellent report in all areas” Houston client

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