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New report on US midstream oil and gas equipment industry

Published by
World Pipelines,


A new report titled ‘US Midstream Oil & Gas Equipment Industry’ presents historic demand data (2004, 2009, 2014) plus forecasts (2019, 2024) by product, application and US region. The study also assesses key market environment factors, analyses the industry structure, evaluates company market share and profiles 37 US industry players.

US demand to decline to US$10.5 billion in 2019

Demand for equipment used in midstream oil and gas applications in the US is projected to decline to US$10.5 billion in 2019 as low oil and gas prices limit production growth and US midstream infrastructure becomes better adapted to the recent shifts in energy production within the country. While demand will be significantly lower in 2016, the market for midstream equipment is expected to return to healthy levels of demand by 2019. Spending on equipment for use in crude-by-rail and gas processing plants will both fall from elevated 2014 levels, but pipeline construction and liquefied natural gas (LNG) activity will continue to support a high level of demand.

Significant declines in equipment demand are forecast in 2016, driven by a dramatic fall in well completions after the collapse of oil prices since mid 2014. A recovery in drilling and completion activity is expected by 2019, however, with the upstream sector benefiting from improved cost-efficiency, an eventual price recovery, and the presence of new export opportunities for both crude oil and LNG. In turn, better conditions in the upstream market will promote demand for equipment used in new gathering and transmission pipelines, storage facilities, and other types of midstream infrastructure.

Line pipe demand to nearly recover by 2019

The largest product category in midstream oil and gas equipment will remain line pipe, where demand is expected to almost fully recover by 2019 despite a sharp decline in 2015 and 2016. Although demand for these products will not recover to the elevated levels seen in 2014, equipment associated with natural gas infrastructure – including gas treating and processing equipment and compressors used in pipelines – will continue to be strong by historical standards. The rapid growth of gas production in the Marcellus and Utica plays of the Appalachian Basin has required high levels of new gas processing and pipeline infrastructure to meet changing gas transportation dynamics; by 2019 the need for more construction there will begin to ebb.

New LNG facilities, crude-by-rail to boost demand

Although the prospects for LNG export facilities are clouded by short term price uncertainty, market fundamentals will drive the eventual construction of a number of facilities in coming years. These facilities, each of which will be a major investment, will boost the overall market for a range of equipment, including compressors, valves, and pumps. Additionally, several new projects will require construction of LNG storage tanks, which can make up a large part of total project cost due to their size and heavy engineering requirements.

The full report can be viewed here.

Read the article online at: https://www.worldpipelines.com/business-news/20122016/new-report-on-us-midstream-oil-and-gas-equipment-industry/


 

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This article has been tagged under the following:

US pipeline news Crude oil pipeline news Natural gas pipeline news