Offshore Pipeline Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Product (Oil, Gas, And Refined Product), By Basis of Line (Export Line And Transport Line), By Diameter (Below 24’ And Greater than 24’), By Region, Competition 2018-2028

Market Overview

Global Offshore Pipeline Market was valued at USD 10.28 Billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 3.8% through 2028. Over the long term, factors such as increasing demand for crude oil and natural gas, especially from the Asia-Pacific region, and growing emphasis on safe, economic, and reliable connectivity for oil and gas exploration are expected to drive the market during the forecast period.

On the other hand, technical challenges like construction, deep-water challenges, and high construction costs are expected to restrain market growth.

Nevertheless, increasing oil and gas imports in the European and Asia-Pacific regions through subsea (offshore) pipelines are expected to create huge opportunities for the offshore pipeline market during the forecast period. North America, led by the United States and Canada, would likely dominate the offshore pipeline market during the forecast period due to the increased offshore exploration activities.

Key Market Drivers

Rise in Demand for Natural Gas and Crude Oil

The demand for natural gas and crude oil is constantly increasing across the world. For instance, the demand for oil was increased by 1.3% globally in 2018 due to the robust growth of oil industry in the US. According to the International Energy Agency forecasts, the oil demand in Q3 of 2019 was rose by 1.1 million of barrels per day (Mbd), which was more than double as compared to the previous quarter. The US and China have presented the most considerable growth. The surge in petrochemical demand across the US resulted in increased consumption. Growing industrial production with high demand for trucking services drive the need for petrochemicals, which fuels the growth of the offshore pipeline market. The growth in air traffic volumes worldwide, particularly in Asia's developing economies, is another factor increasing oil consumption.

Rising Demand for Natural Gas

The rising demand for natural gas has resulted in the discovery of new gas fields as well as the adoption of simple and low-cost transportation of natural gas exports via subsea (offshore) pipelines, which are anticipated to drive the offshore pipeline market.

Global natural gas production was recorded at 4036.9 billion cubic meters in 2021. North America is the leading natural gas producer, accounting for about 1135.8 billion cubic meters, followed by the Middle East and Africa with 972.4 billion cubic meters. This is expected to drive the offshore pipeline market during the forecast period.

In September 2022, EUROPIPE, located in Germany, was awarded by North American TC Energy (TCE) a contract to supply pipe for the Southeast Gateway Pipeline project in the Gulf of Mexico. TCE is constructing the USD 4.5 billion offshore gas pipeline in collaboration with the Mexican state-owned power utility Comisión Federal de Electricidad (CFE) to ensure southeastern Mexico's electricity supply. The project was awarded to EUROPIPE, a joint company of Salzgitter Mannesmann and Aktien-Gesellschaft der Dillinger Hüttenwerke, at the end of August. The project’s scope involves supplying 265,000 metric tons of pipe (365 kilometers) with anti-corrosion coating.

Additionally, in January 2023, Eni reported a significant new gas discovery at the Nargis-1 exploration well in the Nargis Offshore Area Concession off the coast of Egypt in the Eastern Mediterranean Sea. The Nargis-1 well was drilled in 1,014 feet (309 m) of water and encountered roughly 200 net feet (61 m) of Miocene and Oligocene gas-bearing sandstones. The discovery can be developed by taking advantage of Eni's current facilities.

Furthermore, recent waves of cost reductions and key technological breakthroughs have allowed many oil and gas exploration and production companies to diversify into sustainable deepwater and ultra-deepwater developments.

As a result, the offshore pipeline market is anticipated to expand rapidly in the near future. As a result of the foregoing, the gas segment is anticipated to grow at a rapid pace during the forecast period.

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Key Market Challenges

At the forefront of challenges in the offshore pipeline market are technological considerations. Building pipelines in the harsh and often remote offshore environments demands cutting-edge engineering solutions. Technological advancements are required to develop pipelines that can withstand extreme temperatures, high pressures, and corrosive conditions. The industry is continually pressed to improve the reliability and integrity of pipelines over their operational lifespan, necessitating ongoing research and development initiatives.

Regulatory and Environmental Compliance:

The offshore pipeline industry operates in a regulatory landscape that is both intricate and varied. Different regions and countries have distinct environmental and safety standards, making compliance a complex task. The permitting process for offshore pipeline projects can be prolonged and intricate, involving multiple stakeholders. Ensuring compliance with stringent regulations while navigating the complexities of permitting is a persistent challenge for market participants.

Geopolitical and Security Risks:

Geopolitical tensions and uncertainties can significantly impact the planning and execution of offshore pipeline projects. Regions prone to political instability present challenges for project developers, who must navigate shifting political landscapes. Security risks, such as piracy and terrorism, add an additional layer of complexity, necessitating comprehensive risk management strategies to safeguard infrastructure and personnel.

Market Volatility:

The offshore pipeline market is closely tied to the oil and gas industry, making it susceptible to market volatility. Fluctuations in oil and gas prices can impact project economics and profitability, influencing investment decisions and project timelines. Managing the uncertainty of market demand for energy resources is a perpetual concern for industry stakeholders.

Cost and Financing:

Balancing the need for cost-effective solutions with the high initial capital expenditure required for offshore pipeline projects is a delicate equilibrium. The considerable investment required for infrastructure development poses challenges in securing financing, particularly in the context of the long payback periods associated with such projects. Industry participants must navigate financial intricacies to ensure the economic viability of their ventures.

Supply Chain and Logistics:

The offshore nature of pipeline projects introduces challenges in managing complex supply chains. Transporting materials and equipment to remote offshore locations requires meticulous planning and coordination. Delays and disruptions in the supply chain can have cascading effects on project timelines and budgets, making effective supply chain management a critical aspect of project execution.

Technological Innovation and Digitalization:

In an era of rapid technological evolution, the offshore pipeline industry faces the challenge of embracing innovation and digitalization. Integrating new technologies, such as advanced sensors and automation, into existing infrastructure is a complex process. However, the benefits of increased efficiency and reduced operational costs make this technological evolution a necessity for staying competitive in the market.

Competition and Market Dynamics:

Navigating a competitive market is a perpetual challenge for offshore pipeline stakeholders. Distinguishing one's offerings from competitors and adapting to shifting market dynamics are essential for success. The emergence of alternative energy sources adds another layer of complexity, requiring industry participants to be agile in response to changing energy landscapes.

Natural Disasters and Climate Change:

The offshore pipeline industry must contend with the unpredictable forces of nature. Natural disasters, including hurricanes, earthquakes, and tsunamis, pose significant risks to offshore infrastructure. Climate change introduces additional uncertainties, such as rising sea levels and changing weather patterns, necessitating comprehensive risk mitigation strategies to ensure the resilience of offshore pipelines.

Local Community Engagement:

Building and maintaining positive relationships with local communities affected by offshore pipeline projects is a challenge that goes beyond engineering and regulatory considerations. Addressing concerns related to environmental impact, land use, and potential disruptions to local economies requires effective communication, community engagement, and sustainable development practices.

In conclusion, the offshore pipeline market is a dynamic and multifaceted industry that faces a spectrum of challenges. From the intricacies of technological innovation to the complexities of regulatory compliance and the uncertainties of market dynamics, stakeholders must navigate a complex landscape. Successfully addressing these challenges requires a holistic approach that incorporates technological advancements, robust risk management strategies, and effective collaboration with regulatory bodies and local communities. As the industry continues to evolve, proactive adaptation to emerging challenges will be key to ensuring the sustainability and success of offshore pipeline projects on a global scale.

Key Market Trends

Growing demand for refined products is driving the market growth

Rising natural gas demand has resulted in the discovery of new gas sources and the adoption of easy and low-cost natural gas export transportation via subsea (offshore) pipelines, which are expected to drive the offshore pipeline industry. For Instance: In September 2022, EUROPIPE, based in Germany, was contracted by North American TC Energy (TCE) to supply the Southeast Gateway Pipeline project in the Gulf of Mexico. TCE is building the USD 4.5 billion offshore gas pipeline joined hands with the Mexican state-owned power company Commission Federal de Electricidal (CFE) to ensure electricity supply in southeastern Mexico. At the end of August, the project was awarded to EUROPIPE, a joint venture of Salzgitter Mannesmann and Aktien-Gesellschaft der Dillinger Hutten Werke. The project’s scope includes an anti-corrosion coating of 265,000 metric tons of pipe (365 Kilometers).Furthermore, Eni reported a major new gas discovery at the Nargis-1 exploration well in the Nargis Offshore Area Concession off the coast of Egypt in the Eastern Mediterranean Sea in January 2023. The Nargis-1 well was bored in 1,014 feet (309 meters) of water and encountered Miocene and Oligocene gas-bearing sandstones. The discovery can be developed by utilizing Eni’s current infrastructure. Furthermore, recent cost-cutting waves and important technology advancements have allowed many oil and gas exploration and production corporations to diversify into viable deepwater and ultra-deepwater developments. As a result, it is anticipated that demand for offshore pipeline will increase throughout the projection period due to the rising demand and government initiatives. Thus, driving the Offshore Pipeline market revenue.

Segmental Insights

Diameter Insights

The more than 24 inches segment is expected to register a higher CAGR during the forecast period. It is anticipated that ~35,000 km of 24 inches pipeline network will be completed globally during 2018–2023, which is supporting the market growth for more than 24 inches diameter segment. The hydrocarbon flow and pressure are controlled based on the diameter of the pipe. A few of the major contractors in the market are the National Petroleum Construction Company (NPCC), Saipem, and McDermott International.

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Regional Insights

During the forecast period, North America is anticipated to dominate the global offshore pipeline market. Several countries in the area are attempting to invest in offshore oil and gas exploration. During the forecast period, oil and gas pipeline infrastructure in countries such as the United States and Canada is anticipated to remain fully operational.

With increased activity in the Gulf of Mexico, the offshore pipeline market in the United States is anticipated to expand significantly. The forthcoming new gas production projects are expected to significantly expand the region's subsea pipeline network.

For instance, in January 2023, Talos Energy, headquartered in Houston, discovered commercial quantities of oil and natural gas in two deepwater discoveries in the United States Gulf of Mexico, which it intends to develop as subsea tie-backs to its Ram Powell tension-leg platform (TLP). According to the US player, 78 feet and 72 feet of net payzone thickness were discovered in the main targets at Lime Rock and Venice, respectively, with excellent geologic qualities.

Furthermore, technological advancements are anticipated to drive stable and robust growth in the Canadian pipeline business over the next several years. Pipelines are regarded as the safest, most dependable, and most cost-effective way of meeting the energy needs of high-value end-user markets in the Canadian oil and gas sector.

As a result, North America is anticipated to be the major region in the offshore pipeline market during the forecast period, owing to increased investment in oil and gas projects.

Recent Developments

January 2023: The Romanian gas pipeline operator announced plans to construct a new pipeline worth USD 529.30 million to connect offshore Black Sea gas to the national grid. OMV Petrom, a Romanian oil and gas group majority owned by Austria's OMV and state-owned Romgaz, is anticipated to make a final investment decision in a long-awaited offshore project by mid-2023. The initiative is expected to cost USD 3.8 billion and generate at least 6 billion cubic meters of gas annually.

April 2022: Worley announced that it had been granted a contract to provide primary front-end engineering design (FEED) services for the Nigeria-Morocco Gas Pipeline (NMGP) project. When finished, the more than 4,349-mile-long gas pipeline will connect Nigeria with Morocco, traverse 11 West African countries, and stretch to Europe; according to Worley, the company further added that it would be the world's longest offshore pipeline and the second longest pipeline overall.

January 2022: QatarEnergy announced a major engineering, procurement, construction, and installation (EPCI) contract for the offshore scope of its North Field Expansion Project to McDermott Middle East Inc. (McDermott). The expansion project will increase the State of Qatar’s liquefied natural gas (LNG) production capacity from 77 million tons per annum (MTPA) to 126 MTPA through the North Field East (NFE) and North Field South (NFS) expansion projects, with the first LNG expected to be completed in 2025.

Key Market Players

• TechnipFMC Plc (UK)
• Petrofac Limited (UK)
• McDermott (US)
• Fugro (The Netherlands)
• Saipem (Italy)

Report Scope:

In this report, the Global Offshore Pipeline Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

·         Global Offshore Pipeline Market, By Product:

o   Oil

o   Gas And Refined Product

·         Global Offshore Pipeline Market, By Basis of Line:

o   Export Line

o   Transport Line

·         Global Offshore Pipeline Market, By Diameter:

o   Below 24’

o   Greater than 24’

·         Global Offshore Pipeline Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Asia-Pacific

§  China

§  India

§  Japan

§  South Korea

§  Indonesia

o   Europe

§  Germany

§  United Kingdom

§  France

§  Russia

§  Spain

o   South America

§  Brazil

§  Argentina

o   Middle East & Africa

§  Saudi Arabia

§  South Africa

§  Egypt

§  UAE

§  Israel

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Offshore Pipeline Market.

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Global Offshore Pipeline Market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

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