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US and Russia to dominate global capex on planned pipelines to 2022

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The US and Russia will dominate global capital expenditure (capex) on planned major, trunk crude oil, petroleum products and natural gas pipelines during 2018–2022, according to market analyst GlobalData. Canada, China and Nigeria will also be significant spenders on planned pipelines by 2022, considerably expanding their pipeline network. 

The company forecasts that the global planned natural gas pipeline length will grow to 153,902 km by 2022. Planned crude oil and petroleum product pipelines will also witness impressive growths of 36,876 km and 30,840 km respectively.

The US and Russia are set to spend an estimated $88.4bn and $78.8bn, respectively, on their newbuild pipelines, increasing their networks to 35,633 km and 20,680 km respectively by 2022 should all projects be realised.

The US is the biggest spender in the global planned oil and gas pipelines industry, with natural gas pipelines accounting for around 40% of the total by 2022. Crude oil and natural gas liquids (NGLs) pipeline additions are also planned, with 31% and 24% capex share respectively.

Soorya Tejomoortula, Oil & Gas Analyst at GlobalData, explains: ‘Booming unconventional oil and gas production is driving the growth of the pipeline network in the US. More and more operators are focusing on connecting growing unconventional production with the Gulf coast for export of oil and gas.’

Russia has the second biggest capex spend planned on newbuild pipelines. Investment is mostly focused on the construction of natural gas pipelines, accounting for 88% of the total planned network and expected to start operations by 2022. Petroleum products pipelines and oil pipelines are also planned, with capex share of 7% and 4% respectively.

Tejomoortula adds: ‘Russia is further expanding its massive natural gas pipelines network for exports. The country is building pipelines to transport natural gas from its production centres to demand centres such as China, Japan, India and Europe.’ 

Meanwhile, Canada, China, and Nigeria are expected to account for 9.6%, 6.8%, and 6.5% respectively of global pipeline spending by 2022.

The three longest planned pipelines in the world in the period 2018–2022 are Xinjiang–Guangdong–Zhejiang SNG in China (8,972 km); the Russia–India pipeline (6,000 km); and the Trans Saharan Gas pipeline in Nigeria (4,400 km).

See Petroleum Review’s June 2018 issue for more on Russia’s pipeline network.

Figure 1: Annual capex outlook for planned pipelines by country, in $bn, 2018-2022
Source: GlobalData, 2018

 

News Item details


Journal title: Petroleum Review

Countries: USA - Russia -

Subjects: Banking, finance and investment, Oil markets, Pipes and pipelines, Gas pipelines, Forecasting

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