Close to two-thirds of the onshore pipelines installed between now and 2019 will be to transport natural gas, with global spending rising modestly over the period, Douglas-Westwood (DW) researchers said Friday.
Pipeline capital expenditures should hit $220 billion between 2015 and 2019, a 14% increase from the previous five-year period, according to the global market researcher's latest "World Onshore Pipelines Market Forecast."
"The substantial fall in oil prices has weakened the onshore market, causing project delays and a focus on reducing costs for pipeline owners," said author Matt Loffman. "Despite this, the delays we have observed have a different complexion to other oilfield sectors and have been limited in large part to the North America region.
The onshore pipeline construction market in general "is fairly insulated from commodity price fluctuations when taking a global perspective."
Delays relate to a reduction in the growth rate in emerging economies, as well as declining U.S. unconventional production. However, "these are offset to a large extent by major transmission lines and demand growth in the Middle East and Latin America," Loffman said.
A shift in the past three years has trended toward large diameter pipelines, said DW research team leader Hannah Lewedon.
"This is expected to continue to 2016, but in 2017 and beyond, smaller diameter pipelines are expected to gain relative market share" because of "maturing networks" within emerging economies "and a return of U.S. onshore production growth."
As well, investments in liquefied natural gas infrastructure "and a move toward gas as a power source is also a key factor in future pipeline construction," shen said.
"We anticipate 66% of installed lines between now and 2019 to transport natural gas."
On a regional basis, "the Middle East continues to be a bright spot where solid growth is anticipated. As other developing regions increase their infrastructure footprint we expect pipeline construction to remain important."