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Natural gas pipeline market, emerging trends and forecast – Technavio

Natural gas pipeline market set to grow with multinational agreements and growth in deepwater projects

LONDON- Technavio’s report on global natural gas pipeline market provides analysis on the most important trends expected to impact the market outlook from 2016-2020, according to a press release.

Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.

“The global natural gas pipeline market is cyclical in nature and is experiencing a phase marked by low prices. However, the investments in the global natural gas pipeline market are not affected by short-term natural gas price fluctuations and conform to the larger market cycles,” said Thanikachalam Chandrasekaran, lead analyst from Technavio, specializing in research on oil and gas sector.

The market is expected to be driven by factors such as shift in the exploration base of natural gas supplies and increasing collaboration between various nations worldwide.

These key drivers of the market are projected to be in line with the ongoing trend of securing unconventional reserve assets in the oil and gas industry.

The top three emerging trends driving the global natural gas pipeline market according to Technavio energy research analysts are:

  • Increase in multinational joint development agreements
  • Growth in deepwater and ultra-deepwater encounters
  • Role of advanced analytics

Increase in multinational joint development agreements

The presence of the natural gas reserve base and the downstream consumer markets might have varied degrees of geographical proximities within them.

The basic role of the pipeline transportation sector is to act as a bridge between these and facilitate the monetization of the resources.

As the geographical markets have no defined boundaries, there are high probabilities of the existence of these source-market relationships to extend beyond traditional international borders.

In the past few decades of development, these cross-border issues have caused several delays and questioned the entire concept of a particular pipeline system.

The factors that actually direct the planning, construction, and operation of these multinational pipelines are driven by forces outside the normal market demand-supply equilibrium.

With the presence of two or more nations in the picture, it is very difficult to arrive at terms of negotiations as every participant has its own development in mind.

There have been historical cases wherein the past conflicts between two participating nations have actually led multi-billion-dollar pipeline projects being shelved.

Growth in deepwater and ultra-deepwater encounters

The primary function of pipelines is to transport natural gas from the source of extraction to the markets, where it is refined to derive the valuable components out it.

Therefore, any change to the dynamics of the natural gas being transported by the pipelines is of supreme importance for the industry.

There are a few changes that are emerging out of the current day natural gas pipeline market. One of the most significant of these trends in the rise in deepwater and ultra-deepwater operations.

“With the conventional avenues of oil and gas reserves already seeing a certain end, the dependence of the global economy on fossil fuels is pushing the upstream oil and gas sector to the geographical ends of the world,” said Thanikachalam.

Role of advanced analytics

Internet of Things (IoT) in the oil pipeline industry links assets, people, products, and services to rationalize the flow of data, makes real-time choices, and improves asset performance, process, and product quality.

The technology empowers people and creates new opportunities in the industry. Major oil pipeline players have already started designing strategies integrated with IoT. The technology allows machines to provide detailed diagnostics and data while sharing information about processes in real time.

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