P&GJ’s Mid-Year International Pipeline Report

P&GJ’s mid-year international/offshore report shows planned pipeline miles remain higher than actual pipeline construction mileage. Figures show the international sector accounts for 81,752 miles of crude oil, natural gas and refined products pipelines under construction and planned. Of these, 50,355 miles represent pipelines in the feasibility and front end engineering design phase while 31,215 miles account for pipelines in various phases of construction.

The new figures show an 8,872-mile decrease in pipeline miles under construction and planned since P&GJ’s February 2010 report when the international sector accounted for 90,624 miles of new and planned pipelines. Much of the decrease is accounted for in the removal of planned projects which have been delayed or removed after failing to come to fruition. Conversely, pipeline miles under construction rose since February from 24,260 to 31,217.

In identifying areas with high levels of activity, the following reflect new and planned pipeline miles in the six basic geopolitical groupings used in this report (see accompanying map). South and Central America and the Caribbean – 10,166; Western Europe and European Union countries – 1,980; Africa – 8,523; Middle East – 8,318; Former Soviet Union and Eastern European countries – 17,039; and the Asia Pacific region, 35,546. For more information on these and other projects, see P&GJ’s sister publication, Pipeline News.

Energy Demand
Much of the interest in new pipeline construction is driven by rapid growth in energy demand in nations outside the Organization of Economic Cooperation and Development (Non-OECD) nations. With robust economic recovery expected to continue in China, India, and other non-OECD nations, continued rapid growth in energy demand is expected.

In support is the U.S. Energy Information Administration’s International Energy Outlook 2010. World-marketed energy consumption is shown growing 49% between 2007-2035, driven by economic growth in the developing nations of the world, according to the reference case projection from the recently released report. The most rapid growth in energy demand from 2007-2035 occurs in non-OECD nations. Total non-OECD energy consumption increases by 84% vs. a 14% increase among OECD nations.

Asia Pacific
With the Asia Pacific region fast becoming the world’s most significant oil and gas consumer, it is not surprising that the region accounts for the highest number of new and planned pipeline miles. Of 35,546 miles, 18,594 represent pipelines in the engineering and design phase, while 16,952 miles reflect projects in various stages of construction.

As to activity, China, India and Australia continue to be the most active nations in the Asia Pacific region in terms of construction.

Much of the activity in China is driven by state-owned China National Petroleum Corp. (CNPC), the country’s largest natural gas company in upstream and downstream sectors. Earlier this year, CNPC began pre-build activity in preparation for Phase II of the 920- mile Central Asia-China Natural Gas pipeline from Kazakhstan’s Beyneu to Shymmkent. Construction is slated to begin before year-end.