|
Forecast Period
|
2024-2028
|
|
Market Size (2022)
|
USD 10.28 Billion
|
|
CAGR (2023-2028)
|
3.8%
|
|
Fastest Growing
Segment
|
Greater than 24’
|
|
Largest Market
|
North America
|
Market Overview
Global Offshore Pipeline Market was
valued at USD 10.28 Billion in 2022 and is anticipated to project robust growth
in the forecast period with a CAGR of 3.8% through 2028. Over
the long term, factors such as increasing demand for crude oil and natural gas,
especially from the Asia-Pacific region, and growing emphasis on safe,
economic, and reliable connectivity for oil and gas exploration are expected to
drive the market during the forecast period.
On the other hand, technical
challenges like construction, deep-water challenges, and high construction
costs are expected to restrain market growth.
Nevertheless, increasing oil
and gas imports in the European and Asia-Pacific regions through subsea
(offshore) pipelines are expected to create huge opportunities for the offshore
pipeline market during the forecast period. North America, led by the United
States and Canada, would likely dominate the offshore pipeline market during
the forecast period due to the increased offshore exploration activities.
Key Market Drivers
Rise in Demand for Natural Gas and Crude
Oil
The demand for natural gas and crude oil
is constantly increasing across the world. For instance, the demand for oil was
increased by 1.3% globally in 2018 due to the robust growth of oil industry in
the US. According to the International Energy Agency forecasts, the oil demand
in Q3 of 2019 was rose by 1.1 million of barrels per day (Mbd), which was more
than double as compared to the previous quarter. The US and China have
presented the most considerable growth. The surge in petrochemical demand
across the US resulted in increased consumption. Growing industrial production
with high demand for trucking services drive the need for petrochemicals, which
fuels the growth of the offshore pipeline market. The growth in air traffic
volumes worldwide, particularly in Asia's developing economies, is another
factor increasing oil consumption.
Rising Demand for Natural Gas
The rising demand for natural gas has
resulted in the discovery of new gas fields as well as the adoption of simple
and low-cost transportation of natural gas exports via subsea (offshore)
pipelines, which are anticipated to drive the offshore pipeline market.
Global natural gas production was
recorded at 4036.9 billion cubic meters in 2021. North America is the leading
natural gas producer, accounting for about 1135.8 billion cubic meters,
followed by the Middle East and Africa with 972.4 billion cubic meters. This is
expected to drive the offshore pipeline market during the forecast period.
In September 2022, EUROPIPE, located in
Germany, was awarded by North American TC Energy (TCE) a contract to supply
pipe for the Southeast Gateway Pipeline project in the Gulf of Mexico. TCE is
constructing the USD 4.5 billion offshore gas pipeline in collaboration with
the Mexican state-owned power utility Comisión Federal de Electricidad (CFE) to
ensure southeastern Mexico's electricity supply. The project was awarded to
EUROPIPE, a joint company of Salzgitter Mannesmann and Aktien-Gesellschaft der
Dillinger Hüttenwerke, at the end of August. The project’s scope involves
supplying 265,000 metric tons of pipe (365 kilometers) with anti-corrosion
coating.
Additionally, in January 2023, Eni
reported a significant new gas discovery at the Nargis-1 exploration well in
the Nargis Offshore Area Concession off the coast of Egypt in the Eastern
Mediterranean Sea. The Nargis-1 well was drilled in 1,014 feet (309 m) of water
and encountered roughly 200 net feet (61 m) of Miocene and Oligocene
gas-bearing sandstones. The discovery can be developed by taking advantage of
Eni's current facilities.
Furthermore, recent waves of cost
reductions and key technological breakthroughs have allowed many oil and gas
exploration and production companies to diversify into sustainable deepwater
and ultra-deepwater developments.
As a result, the offshore pipeline
market is anticipated to expand rapidly in the near future. As a result of the
foregoing, the gas segment is anticipated to grow at a rapid pace during the
forecast period.
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Key Market Challenges
At the forefront of challenges in the
offshore pipeline market are technological considerations. Building pipelines
in the harsh and often remote offshore environments demands cutting-edge
engineering solutions. Technological advancements are required to develop
pipelines that can withstand extreme temperatures, high pressures, and
corrosive conditions. The industry is continually pressed to improve the
reliability and integrity of pipelines over their operational lifespan,
necessitating ongoing research and development initiatives.
Regulatory and Environmental Compliance:
The offshore pipeline industry operates
in a regulatory landscape that is both intricate and varied. Different regions
and countries have distinct environmental and safety standards, making
compliance a complex task. The permitting process for offshore pipeline
projects can be prolonged and intricate, involving multiple stakeholders. Ensuring
compliance with stringent regulations while navigating the complexities of
permitting is a persistent challenge for market participants.
Geopolitical and Security Risks:
Geopolitical tensions and uncertainties
can significantly impact the planning and execution of offshore pipeline
projects. Regions prone to political instability present challenges for project
developers, who must navigate shifting political landscapes. Security risks,
such as piracy and terrorism, add an additional layer of complexity,
necessitating comprehensive risk management strategies to safeguard
infrastructure and personnel.
Market Volatility:
The offshore pipeline market is closely
tied to the oil and gas industry, making it susceptible to market volatility.
Fluctuations in oil and gas prices can impact project economics and
profitability, influencing investment decisions and project timelines. Managing
the uncertainty of market demand for energy resources is a perpetual concern
for industry stakeholders.
Cost and Financing:
Balancing the need for cost-effective
solutions with the high initial capital expenditure required for offshore
pipeline projects is a delicate equilibrium. The considerable investment
required for infrastructure development poses challenges in securing financing,
particularly in the context of the long payback periods associated with such
projects. Industry participants must navigate financial intricacies to ensure
the economic viability of their ventures.
Supply Chain and Logistics:
The offshore nature of pipeline projects
introduces challenges in managing complex supply chains. Transporting materials
and equipment to remote offshore locations requires meticulous planning and
coordination. Delays and disruptions in the supply chain can have cascading effects
on project timelines and budgets, making effective supply chain management a
critical aspect of project execution.
Technological Innovation and
Digitalization:
In an era of rapid technological
evolution, the offshore pipeline industry faces the challenge of embracing
innovation and digitalization. Integrating new technologies, such as advanced
sensors and automation, into existing infrastructure is a complex process.
However, the benefits of increased efficiency and reduced operational costs
make this technological evolution a necessity for staying competitive in the
market.
Competition and Market Dynamics:
Navigating a competitive market is a
perpetual challenge for offshore pipeline stakeholders. Distinguishing one's
offerings from competitors and adapting to shifting market dynamics are
essential for success. The emergence of alternative energy sources adds another
layer of complexity, requiring industry participants to be agile in response to
changing energy landscapes.
Natural Disasters and Climate Change:
The offshore pipeline industry must
contend with the unpredictable forces of nature. Natural disasters, including
hurricanes, earthquakes, and tsunamis, pose significant risks to offshore
infrastructure. Climate change introduces additional uncertainties, such as
rising sea levels and changing weather patterns, necessitating comprehensive
risk mitigation strategies to ensure the resilience of offshore pipelines.
Local Community Engagement:
Building and maintaining positive
relationships with local communities affected by offshore pipeline projects is
a challenge that goes beyond engineering and regulatory considerations.
Addressing concerns related to environmental impact, land use, and potential
disruptions to local economies requires effective communication, community
engagement, and sustainable development practices.
In conclusion, the offshore pipeline
market is a dynamic and multifaceted industry that faces a spectrum of
challenges. From the intricacies of technological innovation to the
complexities of regulatory compliance and the uncertainties of market dynamics,
stakeholders must navigate a complex landscape. Successfully addressing these
challenges requires a holistic approach that incorporates technological
advancements, robust risk management strategies, and effective collaboration
with regulatory bodies and local communities. As the industry continues to
evolve, proactive adaptation to emerging challenges will be key to ensuring the
sustainability and success of offshore pipeline projects on a global scale.
Key Market Trends
Growing demand for refined products is
driving the market growth
Rising natural gas demand has resulted
in the discovery of new gas sources and the adoption of easy and low-cost
natural gas export transportation via subsea (offshore) pipelines, which are
expected to drive the offshore pipeline industry. For Instance: In September
2022, EUROPIPE, based in Germany, was contracted by North American TC Energy
(TCE) to supply the Southeast Gateway Pipeline project in the Gulf of Mexico.
TCE is building the USD 4.5 billion offshore gas pipeline joined hands with the
Mexican state-owned power company Commission Federal de Electricidal (CFE) to
ensure electricity supply in southeastern Mexico. At the end of August, the
project was awarded to EUROPIPE, a joint venture of Salzgitter Mannesmann and
Aktien-Gesellschaft der Dillinger Hutten Werke. The project’s scope includes an
anti-corrosion coating of 265,000 metric tons of pipe (365
Kilometers).Furthermore, Eni reported a major new gas discovery at the Nargis-1
exploration well in the Nargis Offshore Area Concession off the coast of Egypt
in the Eastern Mediterranean Sea in January 2023. The Nargis-1 well was bored
in 1,014 feet (309 meters) of water and encountered Miocene and Oligocene
gas-bearing sandstones. The discovery can be developed by utilizing Eni’s
current infrastructure. Furthermore, recent cost-cutting waves and important
technology advancements have allowed many oil and gas exploration and
production corporations to diversify into viable deepwater and ultra-deepwater
developments. As a result, it is anticipated that demand for offshore pipeline
will increase throughout the projection period due to the rising demand and
government initiatives. Thus, driving the Offshore Pipeline market revenue.
Segmental Insights
Diameter Insights
The more than 24 inches
segment is expected to register a higher CAGR during the forecast period. It is
anticipated that ~35,000 km of 24 inches pipeline network will be completed
globally during 2018–2023, which is supporting the market growth for more than
24 inches diameter segment. The hydrocarbon flow and pressure are controlled
based on the diameter of the pipe. A few of the major contractors in the market
are the National Petroleum Construction Company (NPCC), Saipem, and McDermott
International.
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Regional Insights
During
the forecast period, North America is anticipated to dominate the global
offshore pipeline market. Several countries in the area are attempting to
invest in offshore oil and gas exploration. During the forecast period, oil and
gas pipeline infrastructure in countries such as the United States and Canada
is anticipated to remain fully operational.
With
increased activity in the Gulf of Mexico, the offshore pipeline market in the
United States is anticipated to expand significantly. The forthcoming new gas
production projects are expected to significantly expand the region's subsea
pipeline network.
For
instance, in January 2023, Talos Energy, headquartered in Houston, discovered
commercial quantities of oil and natural gas in two deepwater discoveries in
the United States Gulf of Mexico, which it intends to develop as subsea
tie-backs to its Ram Powell tension-leg platform (TLP). According to the US
player, 78 feet and 72 feet of net payzone thickness were discovered in the
main targets at Lime Rock and Venice, respectively, with excellent geologic
qualities.
Furthermore,
technological advancements are anticipated to drive stable and robust growth in
the Canadian pipeline business over the next several years. Pipelines are
regarded as the safest, most dependable, and most cost-effective way of meeting
the energy needs of high-value end-user markets in the Canadian oil and gas
sector.
As a
result, North America is anticipated to be the major region in the offshore
pipeline market during the forecast period, owing to increased investment in
oil and gas projects.
Recent Developments
January 2023: The Romanian
gas pipeline operator announced plans to construct a new pipeline worth USD
529.30 million to connect offshore Black Sea gas to the national grid. OMV
Petrom, a Romanian oil and gas group majority owned by Austria's OMV and
state-owned Romgaz, is anticipated to make a final investment decision in a
long-awaited offshore project by mid-2023. The initiative is expected to cost
USD 3.8 billion and generate at least 6 billion cubic meters of gas annually.
April 2022: Worley
announced that it had been granted a contract to provide primary front-end
engineering design (FEED) services for the Nigeria-Morocco Gas Pipeline (NMGP)
project. When finished, the more than 4,349-mile-long gas pipeline will connect
Nigeria with Morocco, traverse 11 West African countries, and stretch to
Europe; according to Worley, the company further added that it would be the
world's longest offshore pipeline and the second longest pipeline overall.
January 2022: QatarEnergy
announced a major engineering, procurement, construction, and installation
(EPCI) contract for the offshore scope of its North Field Expansion Project to
McDermott Middle East Inc. (McDermott). The expansion project will increase the
State of Qatar’s liquefied natural gas (LNG) production capacity from 77
million tons per annum (MTPA) to 126 MTPA through the North Field East (NFE)
and North Field South (NFS) expansion projects, with the first LNG expected to
be completed in 2025.
Key Market Players
|
By Product
|
By Basis of Line
|
By Diameter
|
By Region
|
|
- Oil
- Gas And Refined
Product
|
- Export Line
- Transport Line
|
- Below 24’ And
Greater than 24’
|
- North America
- Europe
- South America
- Middle East &
Africa
- Asia Pacific
|
|
Report Scope:
In this report, the Global Offshore Pipeline Market has been segmented into the following categories,
in addition to the industry trends which have also been detailed below:
·
Global Offshore Pipeline Market, By
Product:
o Oil
o
Gas And
Refined Product
·
Global Offshore Pipeline Market, By Basis
of Line:
o Export Line
o
Transport
Line
·
Global Offshore Pipeline Market, By Diameter:
o
Below
24’
o
Greater
than 24’
·
Global Offshore 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 Offshore Pipeline Market.
Available Customizations:
Global Offshore Pipeline Market report with the given market data, Tech
Sci Research offers customizations according to a company's specific needs. The
following customization options are available for the report:
Company Information
- Detailed analysis and profiling of additional market players (up to
five).
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