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The number of new projects announced in 1Q2011 (January-March 2011) across ...

The number of new projects announced in 1Q2011 (January-March 2011) across the global energy industry is up 29% over the previous quarter according to EIC Monitor, a quarterly report from the EIC, a leading trade association for UK companies that supply goods and services to the energy industries worldwide. EIC Monitor reports newly announced projects across the global energy supply chain. The 1Q2011 report reveals that all sectors have shown positive signs of growth; the oil and gas sectors continuing their recovery with further increases in projected investment potential. The renewables industry continues to perform well, with a significant increase in project numbers and investment value, while the power sector is beginning to recover from last quarter’s major drop. EIC Monitor tracks over 8,500 active and future projects in the global energy industry and provides an industry barometer, broken down into oil and gas (downstream, midstream, upstream), nuclear and conventional power and the renewables sectors. Data is analysed by the number and value of new, active and proposed projects recorded by the EIC each quarter. Overall this quarter, the total number of new projects has increased significantly since the previous quarter and is also much higher than for the same quarter in 2010. Potential investment value has also increased greatly compared to the previous quarter. In 1Q2011 there were 541 new projects across the global energy supply chain, with an estimated total value of $373bn, compared to 421 in 4Q2010 totalling $277bn and 423 new projects in 1Q2010 worth $532bn. The upstream sector has seen a slight increase in the number of new projects, up from 74 in 4Q2010 to 79 in 1Q2011, with a healthy 26% increase in potential investment value over the same period. The midstream sector has seen a 22% increase in the number of projects, up from 54 to 66, together with a strong 63% increase in project value since 4Q2010. In the downstream sector, the number of new quarterly projects in 1Q2011 has increased by 19% since 4Q2010, although, with only a 4.3% rise in the total potential investment value to $55.2bn, it is still very much down on the $71.6bn of 1Q2010. In the renewables sector, the number of new projects has increased significantly from 135 in 4Q2010 to 225 in 1Q2011. The potential investment value of new projects has increased accordingly, up by 56% from $97.5bn to $152bn, although this increase is attributed to one project. In the power sector, the number of new projects announced has remained static this quarter (96 compared to 95 in 4Q2010), although the potential total investment value of new projects is up by 22% from $62.8bn in 4Q2010 to $76.6bn in 1Q2011. In nearly all cases newly proposed projects must first undergo various planning and consent approvals which may take several years. Also, early stage proposals do not necessarily have financing agreed and in place. Thus there will always be a proportion of projects that do not gain consent and/or finance. Commenting on the EIC Monitor, Mike Major, CEO of the EIC said: ‘This is good news for the energy industry overall. Yet again we are seeing positive signs across the board with these figures building on the previous quarter’s figures to provide a solid foundation for a sustainable recovery. The oil, gas and renewables sectors are continuing their upward trend and the power sector is showing signs of recovery from the dramatic drop in new project announcements we saw last quarter.’ Analysis by sector Upstream: There have been 79 new projects in the upstream sector totalling $53.2bn in 1Q2011. In comparison, there were 74 new projects totalling $42.1bn in 4Q2010 and 91 new projects totalling $51.4bn in 1Q2010. South-east Asia has around one third of the new projects, with 27 schemes representing a total potential investment value of $5.3bn. Russia, however, has the largest investment potential with over $21bn of projects, including the Messoyakha oil and gas field project valued at $18bn. Midstream: There have been 66 new projects in the midstream sector totalling $35.7bn in 1Q2011. In comparison, there were 54 new projects totalling $22bn in 4Q2010 and 50 new projects totalling $27.7bn in 1Q2010. North America accounts for 21 of the 66 new projects, although they only represent $4.6bn (13%) of the total sector potential investment value. The largest new projects are the Gorgon LNG train 4 ($9bn) in Australia and the West Ethylene Pipeline (WEP; $7.2bn) in Iran. Downstream: There have been 75 new projects in the downstream sector totalling $55.2bn in 1Q2011. In comparison, there were 63 new projects totalling $52.9bn in 4Q2010 and 59 new projects totalling $71.6bn in 1Q2010. South-east Asia announced 17 projects with a combined potential investment value of $18.4bn. The BRIC (Brazil, Russia, India, China) countries account for 24 projects with a value of $9.1bn. European projects only amount to 1.6% ($865mn) of the total potential investment this quarter. The largest single downstream project is the $10bn Formosa plastics refinery to be constructed on Jurong Island in Singapore. Renewables: There have been 225 new projects in the renewables sector totalling $152bn in 1Q2011. One project alone represents half of this investment. In comparison there were 135 new projects totalling $97.5bn in 4Q2010 and 124 new projects totalling $242.5bn in 1Q2010. The US announced 36 new projects this quarter, of which 11 are solar projects with a combined total potential investment value of $16.8bn. The UK continues to develop its renewables portfolio, with 74 projects announced including 56 onshore wind farms. The largest project on the horizon is the enormous 39,000 MW Grand Inga hydropower project in the Democratic Republic of Congo, valued at $80bn. Hydroelectric projects dominate this sector, with five of the largest 10 renewable projects announced this quarter. Power: There have been 96 new projects in the power sector totalling $76.6bn in 1Q2011. In comparison there were 95 new projects totalling $62.8bn in 4Q2010 and 99 new projects totalling $138.6bn in 1Q2010. The US and India account for 22 projects valued at $26.8bn. India has eight new coal-fired power projects and a number of T&D / interconnector projects. There is an even spread of new projects across most other regions; Argentina and Venezuela each announced three new projects, the Middle East has six and south-east Asia has eight. Western Europe sees an increase in the number of smaller energy from waste and biomass projects. The largest new project is the 3,000 MWe Tsuruga nuclear plant (units 3 and 4) project in Japan, with an expected capital investment of $6bn.
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