The global oil and gas pipeline market is expected to grow at a CAGR of more than 6% from 2021 to 2026. The oil and gas market is one of the worst-hit industries during COVID-19. Several major midstream companies witnessed reduced net earning till the third quarter of 2020. Pipeline projects in multiple countries witnessed delays due to imposed lockdown restrictions in major countries like the United States, India, and others. The decreased gas demand due to the decline in electricity consumption and travel restrictions have also affected gas consumption in several countries negatively. Despite this, according to the International Energy Agency (IEA), the oil demand 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, an 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 a huge threat to the oil and gas demand, which is likely to be a major challenge for the growth of oil and gas pipeline 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. Such large-scale projects are expected to dirve the pipeline industry to grow more, and this, in turn, is expected to presents an opportunity for the market players in the near future.
- Asia-Pacific is expected to witnes a significant growth in the pipeline market owing to the increasing demand for oil and gas from the major countries in the region. China and India have been the largest consumers of oil and gas in the Asia-Pacific region, and the pipeline network is growing at a significant pace in both countries.
Key Market Trends
The Gas Pipeline Segment to Dominate the Market
- Natural gas consumption has increased significantly reaching 3929 billion cubic meters (bcm) in 2019 owing to the increasing demand for natural gas in multiple industries including power generation and transportation. This trend is expected to continue in the coming years as well and is likely to drive the gas pipeline infrastructure significantly.
- By 2030, owing to factors, such as environmental benefits and the quest for energy security in regions, such as Asia-Pacific and the Middle-East and Africa, the demand for natural gas is expected to witness a significant growth among all fuel types.
- With exports of 107 billion cubic meters in 2019, 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 the natural gas pipeline network as well.
- The development 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 increase by up to 48% by 2050. 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 they reached 84.8 bcm in 2019, 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. In the annual budget of 2021, the Indian government announced a pipeline project for the union territory of Jammu and Kashmir. Apart from this, the nation is aiming to increase the natural gas share to 15% in the energy basket and expecting USD 66 billion investment in building the gas infrastructure, including gas pipeline, CGD, and LNG regasification terminals.
- 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 fragmented. Some of the major players operating in this market include Nippon Steel Corporation, Tenaris Inc., TMK Group, ChelPipe Group, and Mott Macdonald Group Ltd.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support