The oil and gas midstream market is expected to grow at a CAGR of less than 3% during the forecast period. The global crude oil production in 2018, was 94718.48 barrels per day and it is expected to increase approx. 1.2% year on year, till 2024. Factors such as upcoming oil and gas projects are expected to boost the demand for pipeline services in the coming years, is likely to drive the oil & gas midstream market during the forecast period. However, under-utilization of the gas fired power plants in some regions, is likely to restrain the growth of the oil & gas midstream market in the coming years. For an instance, the utilization of India's gas-fired power plants is declining, owing to the decline in the domestic gas production, particularly in the KG basin and high cost of the gas imports.
- The transportation segment is likely to dominate the market during the forecast period, due to the increasing demand of refined products.
- Increasing deepwater and ultra-deepwater activities in the regions like South America and North America are expected to increase the demand for wide network of pipeline across the countries for the safe and quick transportation of hydrocarbon. This is expected to provide an opportunity for the studied market.
- Asia-Pacific is expected to be the most significant market, with the majority of demand coming from India, China, and Australia.
Key Market Trends
Transportation Sector to Dominate the Market
- The oil and gas transportation industry is dominated by pipelines. The oil and gas supply in different regions is expected to exceed the existing transportation capacity, requiring expansions, as well as construction of new pipelines.
- The transmission pipeline companies constitute a major part of the midstream petroleum industry. Alberta is the hub of Canadian midstream pipeline systems. About 426,000 km of Canada's oil and gas pipelines operate solely within Alberta's boundaries and fall under the jurisdiction of the Alberta Energy Regulator. Whereas, the National Energy Board regulates pipelines that cross provincial or international borders.
- Moreover, as of 2018, Australia has more than 39,000 kilometres of natural gas transmission pipelines that transport gas under high pressure. As of 2018, gas delivers more than 45% of Australia's household energy and approximately 130,000 commercial businesses rely on gas.
- Further, in September 2019, Total E&P awarded the transport, installation and pre-commissioning of 35 Km of flexible pipelines and 20 Km of umbilical, connecting 5 wells to the FPSO Cidade de Caraguatatuba to the United Kingdom based offshore projects and services provider, Subsea 7. The Lapa North East field is an ultra deep-water oil & gas field, located approximately 300 kms off the coast of the State of Sao Paulo, in the pre-salt Santos Basin.
- Hence, the transportation sector covers major market in midstream sector. Hence, with the increasing transportation sector, the midstream sector is also expected to increase during the forecast period.
Asia-Pacific to be a Significant Market
- Asia-Pacific is expected to be the significant market for the oil & gas midstream market during the forecast period.
- India is a major LNG importer, globally, and as a result, the country has a strong LNG regasification infrastructure. The LNG demand and LNG consumption in the country are increasing rapidly, with power generation, refining industry, and the fertilizer industry accounting for the majority of the gas consumption.
- In March 2018, India had over 10,000 km of oil pipeline and over 16,000 km of gas pipeline, Through these pipeline, India transport majority of its refined product inside and outside the country.
- Moreover, with the increasing pipeline across the countries, the need for storage terminal also increases to store the hydrocarbons. Therefore, to meet the storage demand, Asia-Pacific countries are planning to invest in the storage terminals in the coming years. For an instance, in June 2019, Thailand's state-controlled PTT is planning to build a LPG storage terminal in Myanmar. The terminal is expected to have the capacity to store over 1million barrel of oil and 4,500 tonnes of LPG.
- Hence, this is expected to increase the midstream market in the region during the forecast period.
The oil & gas midstream market is moderately fragmented. Some of key players in this market include APA Group. Chevron Corporation, BP PLC, Enbridge Pipelines Inc., and Royal Dutch Shell PLC.
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