Analyst forecasts strong onshore pipeline spending through 2015

Christopher E. Smith
OGJ Pipeline Editor

HOUSTON, Nov. 9 -- Energy business analysts Douglas-Westwood forecast in its World Onshore Pipelines Report 2011-15 spending of $193 billion on onshore pipeline projects worldwide through 2015.

The report notes that in developed economies the global economic downturn had the dual effect of destroying energy demand and reducing available credit, leading to the delay or cancellation of many proposed pipeline projects. Such delays will reduce annual expenditure in 2012 before what Douglas-Westwood describes as long-term and industry-specific drivers take over to move expenditures higher.

Beyond 2012, according to the report, continued growth in global oil and gas demand and associated production increases will require increased investment in pipeline systems. In North America, increasing levels of investment in unconventional energy sources will require major investment in new pipeline projects to link the energy sources with existing networks and markets.

Douglas-Westwood forecasts an 11% increase in kilometres of pipelines installed over the period 2011-15, compared with 2006-10. Nearly 74% of the associated expenditure is expected to occur in Asia, Eastern Europe and the former Soviet Union, and North America, with more than 68% of it to be spent on gas pipelines. Asia stands out as the largest forecast market—by both length of pipeline construction and associated expenditure—accounting for $55 billion of forecast capital expenditure.

Contact Christopher E. Smith at chriss@ogjonline.com.

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