Demand for pipelines rising worldwide

In a report by Tube 2010, discusses the growing demand for pipelines and, in particular, high strength large diameter pipes.

The report writes:

“Studies carried out by the Organisation of Oil Exporting Countries (OPEC) and the US Energy Information Administration (EIA) before the current economic crisis forecast oil and gas consumption to go up by 16% and 29%, respectively, by 2015. 

Last year the London-based steel business consultancy CRU foresaw double-digit growth rates for global pipe demand, assuming that 60% of the demand would be accounted for by large-diameter pipes measuring over 20 in. in diameter. Accordingly, the demand for line pipes was said to go up by 78% in Eastern Europe and by over 100% in the Middle East and Asia between 2007 and 2011. Altogether, CRU forecast an increase for line pipes from 14.9 million t in 2007 to 24.2 million t in 2011. In October 2008 Steel Tube News announced that demand for oil and gas pipelines would go up to 27 000 km in 2007 and to 32 000 from 2009 and that demand for welded pipes would rise from 13 million t to 15 million t over the same period. Worldwide, almost 230 000 km of pipeline were under construction or planned in Autumn 2008.

The high demand for oil and gas pipeline for the energy sector was mainly responsible for bringing global steel pipe production in 2008 up to the previous year’s record level of approx. 120 million tons. In the segment of large pipes (welded pipes over 406.4 mm diameter) production was estimated to grow by 1% to 18 million t. Future opportunities for business growth in the segment of longitudinally welded large-diameter pipes are therefore foreseen especially in regions with fast growing energy needs and those with the relevant raw materials because of the high demand for high-quality pipes in demanding dimensions. 

Due to the problematic situation in financial markets, an increasing number of projects in the line pipe sector were postponed in the first quarter of 2009, while in exploration there was no major incentive to develop new oil and gas fields because of the low oil prices. Nevertheless, the situation was largely stable for large-diameter pipes predominantly thanks to long-term projects in the energy sector that had been initiated already in 2007 and 2008. Of course, signs of a slow in demand could be seen here, too. Large pipe manufacturers posted a lower order intake than in the same period of the previous year. Furthermore, competition, especially in the segment of longitudinally welded pipes, became keener.

Due to some still very well filled order books the large pipe segment should be in relatively good shape for 2009. But delays in contract awarding must be expected because of noticeably lower oil and gas prices as well as possible financial bottlenecks. This statement equally applies to the segment of seamless pipes and welded steel pipes made of hot wide strip (carbon and stainless steel) provided they are used in the oil and gas sectors or in power plant construction.      

As a result of the anticipated continued rise in global energy needs steel pipes for the energy sector can also be expected to meet with stable demand in 2010 – although this segment will most probably also be affected by the downward price spiral of the market as a whole. It is currently very hard to say how funding will develop for projects whose realisation is not a strategic necessity.”

 For the full Tube 2010 report, please contact: HartmannP@messe-duesseldorf.de 

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/03022010/tube_2010_report/