Gas Pipeline Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Operation (Gathering, Transmission, Distribution), By Application (Compressor, Metering), By Region, Competition 2018-2028

Market Overview

Global Gas Pipeline Market was valued at USD 2.3 Trillion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 3.9%through 2028. Growing natural gas demand across key industries including power generation, residential and commercial, manufacturing, and the chemical is anticipated to boost the usage of gas pipeline infrastructure over the forecast period. A paradigm shift toward clean energy sources is expected to further support the industry growth.

Key Market Drivers

Rising Government Investments

Rising government investments to enhance accessibility along with the need to upgrade the existing pipeline network across several regions are anticipated to augment the industry landscape. According to the BP Statistical Review of World Energy 2019, European nations traded 478.9 billion cubic meters of natural gas through pipeline infrastructure. The growing trade movement will further boost the demand for the additional infrastructure for gas pipelines.

The U.S. accounted for the largest share of the global industry in 2019 owing to the rising government expenditure on infrastructure expansion along with growing exploration and production activities. Significant production from shale gas reserves and new project developments across Permian Basin will further complement the overall regional growth.

In December 2019, Pembina Pipeline Corporation acquired Kinder Morgan Canada Limited and the U.S. portion of the Cochin Pipeline system. The acquisition strategy is expected to enable the company to become a major provider of premium quality condensate across the Chicago area, thereby extending its reach in the U.S. market through a cross-border pipeline.

According to IEA, natural gas production in North America grew at a rate of 9.6% in 2018. The high production growth rate across the region has attracted large industry players and resulted in huge investments made in the natural gas pipeline infrastructure sector. However, the possibility of under-utilized pipeline capacity in a low-carbon future economy is anticipated to hamper the market growth.

Amplified stringency in regulations over clean energy consumption along with additional capacity development of cross-border gas pipelines is expected to boost the growth across various regions. For instance, in January 2020, the Turkstream natural gas pipeline started operation from Russia to Turkey, adding more than 30 BCMA capacity to Turkey and South and Southeast Europe.

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Key Market Challenges

High Initial Cost of Installing Gas Pipes

The high initial cost of installing gas pipes is a major market constraint for the gas pipeline infrastructure market. Also, the additional equipment necessary to place alongside the pipelines raises the cost even further.

The global transition toward energy production from renewable sources constitutes a significant threat to the oil and gas market, which would be expected to pose a substantial risk to gas pipeline installation expansion in the future periods. Furthermore, the possibility of pipeline leakages is also a market limitation for the worldwide gas pipeline infrastructure market.

Regulatory Hurdles:

One of the significant challenges facing the gas pipeline market is navigating a complex web of regulatory frameworks. Different countries have diverse regulations governing the construction and operation of pipelines. Obtaining the necessary permits and approvals can be time-consuming and costly. Regulatory uncertainty can also pose challenges for project developers, potentially leading to delays and increased costs.

Environmental Concerns:

The construction and operation of gas pipelines can have environmental implications. Concerns related to land use, deforestation, and potential leaks or accidents can lead to opposition from environmental groups and local communities. Striking a balance between meeting energy needs and addressing environmental concerns is a key challenge for the gas pipeline industry.

Technological Risks:

The development of new pipeline projects often involves the use of advanced technologies. Technical challenges related to pipeline integrity, safety, and monitoring systems can pose risks to the successful implementation of projects. Ensuring the resilience of pipelines against natural disasters, cyber threats, and accidents is a continuous challenge that requires ongoing innovation.

Financing and Economic Factors:

Gas pipeline projects are capital-intensive, requiring substantial investments in construction, maintenance, and operational costs. Financing such large-scale projects can be challenging, especially in regions where economic conditions are uncertain. Fluctuations in gas prices and geopolitical events can also impact the economic viability of pipeline projects, making long-term financial planning a complex task.

Competition from Alternative Energy Sources:

The growing emphasis on renewable energy sources poses a challenge to the gas pipeline market. As countries and industries transition toward cleaner energy, there is a shift away from fossil fuels. This transition, coupled with advancements in renewable energy technologies, creates competition for natural gas. The gas pipeline industry must adapt to changing market dynamics and explore ways to integrate renewable energy into their infrastructure.

Key Market Trends

Growing Energy Demand:

One of the primary drivers of the gas pipeline market is the increasing global demand for energy. Natural gas is a versatile and cleaner-burning fuel compared to coal and oil, making it a preferred choice to meet the rising energy needs. As economies expand and urbanize, the demand for natural gas for power generation, industrial processes, and residential use continues to escalate.

Technological Advancements:

The gas pipeline industry has witnessed significant technological advancements in recent years. Advanced materials, monitoring systems, and pipeline construction techniques have improved the efficiency, safety, and environmental performance of gas transportation. Intelligent pipeline monitoring systems, including sensors and data analytics, play a crucial role in detecting and preventing leaks, enhancing the overall reliability of gas transportation networks.

Shifting Geopolitical Dynamics:

Geopolitical factors have a substantial impact on the global gas pipeline market. The development of pipelines often involves collaboration between countries, and geopolitical tensions can influence the planning, construction, and operation of these projects. Additionally, changes in energy policies and alliances can affect the direction of gas flows and trade routes.

Environmental Considerations:

With a growing emphasis on sustainable and low-carbon energy sources, natural gas is positioned as a transitional fuel due to its lower carbon emissions compared to coal and oil. However, environmental concerns related to methane emissions during extraction and transportation pose challenges for the gas pipeline industry. Addressing these concerns through advanced leak detection technologies and adopting best practices is crucial for the industry's sustainability.

Infrastructure Investment:

The expansion and maintenance of gas pipeline infrastructure require significant investments. Governments, energy companies, and international organizations are investing in the development of new pipelines and the upgrading of existing ones to ensure a reliable and efficient supply of natural gas. The financing models, regulatory frameworks, and public-private partnerships play a vital role in determining the pace of infrastructure development.

Integration of Renewable Energy:

As the world transitions towards a more sustainable energy future, the integration of renewable energy sources, such as hydrogen and biogas, into gas pipelines is gaining momentum. Gas pipelines can serve as a conduit for transporting these alternative fuels, supporting the decarbonization of energy systems.

Regulatory Landscape:

The regulatory environment significantly influences the gas pipeline market. Regulations govern pipeline construction, safety standards, environmental impact assessments, and cross-border transportation. Changes in regulatory frameworks can impact project timelines, costs, and overall feasibility.

Regional Dynamics:

The gas pipeline market exhibits regional variations influenced by factors such as resource availability, economic development, and geopolitical considerations. For example, regions with abundant natural gas reserves, like the Middle East and North America, are significant players in the global gas pipeline landscape.

Technological Innovation in Pipeline Construction:

The methods used for pipeline construction are continually evolving. Innovation in construction techniques, including horizontal directional drilling and trenchless technologies, reduces environmental impact and minimizes disruption to local communities. These advancements enhance the feasibility of pipeline projects in challenging terrains.

LNG and Gas Trade:

The global trade of liquefied natural gas (LNG) has become a pivotal aspect of the gas market. LNG terminals and associated pipelines facilitate the transport of natural gas in liquid form across oceans. The development of LNG infrastructure and the associated gas pipelines is a response to the growing international demand for natural gas.

In conclusion, the global gas pipeline market is dynamic and shaped by a combination of economic, technological, geopolitical, and environmental factors. As the world seeks to balance energy security, economic development, and environmental sustainability, the gas pipeline industry will continue to evolve. Investment in innovation, collaboration between nations, and a proactive approach to addressing environmental concerns will be crucial for ensuring the long-term viability and sustainability of the global gas pipeline market.

Segmental Insights

Application Insights

The compressor station segment was valued at USD 623.6 billion in 2019, owing to the increasing trend of expanding pipeline capacity and extending new gas sources to tap additional volumes. Compressor stations on transmission pipelines are built every 80 to 150 kilometers along the pipeline length, allowing pressure to be increased in order to keep the gas moving.

Stringent safety regulations regarding transportation along with the introduction of technologically advanced compressor stations are expected to further augment the segment landscape. For instance, the replacement of gas-driven compressors with electric compressors reduces maintenance and fuel costs and helps eliminate site emissions if located near a reliable power source.

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Regional Insights

North America occupied the largest volume share of 54.8% of the total market in 2022. The presence of highly integrated transmission and distribution infrastructure that can transport natural gas to and from any state across the region has attracted leading pipeline companies to operate in North America. The U.S. is the major hub of gas pipeline infrastructure occupying over 80% of the total pipeline length across the region.

Canada is anticipated to attain the highest revenue-based CAGR of 3.9% over the forecast period. Expansion and replacement of existing pipeline infrastructure are among the primary factors responsible for the regional market growth. For instance, in February 2020, Canada’s Federal Court of Appeal cleared the way for the Trans Mountain pipeline expansion, which would increase its capacity from 300,000 bpd to 890,000 bpd adding 600 miles to the pipeline.

Russia holds a dominant position in the market owing to heavy investments made by operators across the region. For instance, Gazprom constructed 146 gas pipelines in 2018 stretching over 2,000 kilometers across the Russian Federation. The company allocated USD 5.71 billion between 2005 and 2018 for gas grid coverage expansion, thus boosting the penetration rate in Russia up to 68.6% in December 2018.

Asia Pacific is expected to witness the fastest growth exhibiting a revenue-based CAGR of 3.7% over the forecast period. China is the third-largest natural gas consumer after the U.S. and Russian Federation. According to the International Energy Agency, the country is anticipated to become the largest importer by 2022 owing to strong investments driven by high regional demand growth and the government’s policy for better air quality.

Recent Developments

• In February 2023, Saipem’s Grip & Metal Seal Connector, a patented technology for subsea pipeline repair, has received the Statement of Qualified Technology for sour service applications from DNV, the global independent expert in assurance and risk management. Following the completion of this program, a DNV type approval certification will be filed and issued, allowing Sonsub to commercialize the Grip & Metal Seal Connector in major promising locations, particularly the Eastern Mediterranean Sea, Black Sea, and the Middle East.
• In November 2022, Enbridge Inc. and Oxy Low Carbon Ventures, a subsidiary of Occidental, announced plans to collaborate on the development of a carbon dioxide (CO2) sequestration hub on the Texas Gulf Coast near Corpus Christi. Enbridge would design, build, and operate the pipeline infrastructure, while OLCV would design, build, and operate the sequestration facilities.
• June 2022: Kalpataru Power Transmission Limited (KPTL) was awarded the laying & construction of a steel gas pipeline and terminals along with associated facilities for Section II of the Mumbai – Nagpur Pipeline Project (Part A) for GAIL (India) Ltd.
• December 2022: Argentina secured financing of USD 689 million from the Brazilian state development bank BNDES for the second stage of a natural gas pipeline in the Vaca Muerta shale region.
• India's first bi-directional pipeline - PIL acts as a vital link in supplying clean and green energy by connecting all major gas-producing fields on the East coast to the major consuming centers of the West, in a safe, sustainable and reliable manner. PIL is owned by India Infrastructure Trust sponsored by Brookfield Asset Management, a global leader in alternative asset management.
• Enbridge Line 3 Replacement Project: Enbridge is investing USD 9.6 billion to replace its Line 3 pipeline, which will transport crude oil from Alberta, Canada to Superio.
• Kinder Morgan Permian Highway Pipeline: Kinder Morgan is investing USD 2 billion to build the Permian Highway Pipeline, which will transport natural gas from West Texas to Mexico.
• TransCanada Coastal GasLink Pipeline: TransCanada is investing USD 6.6 billion to build the Coastal GasLink Pipeline, which will transport natural gas from northern British Columbia to the LNG Canada liquefaction facility in Kitimat, British Columbia.

These investments are helping to meet the growing demand for natural gas and are expected to support the growth of the gas pipeline market in the years to come.

Key Market Players

• Enbridge
• Gazprom
• TransCanada Pipelines Limited
• Kinder Morgan
• Pembina Pipeline Corporation
• Saipem

Report Scope:

In this report, the Global Gas Pipeline Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

·         Global Gas Pipeline Market, By Operation:

o   Gathering

o   Transmission

o   Distribution

·         Global Gas Pipeline Market, By Application:

o   Compressor

o   Metering

·         Global Gas Pipeline Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Asia-Pacific

§  China

§  India

§  Japan

§  South Korea

§  Indonesia

o   Europe

§  Germany

§  United Kingdom

§  France

§  Russia

§  Spain

o   South America

§  Brazil

§  Argentina

o   Middle East & Africa

§  Saudi Arabia

§  South Africa

§  Egypt

§  UAE

§  Israel

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Gas Pipeline Market.

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Company Information

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