Metal Bulletin Global Transmission Linepipe Market | страница 2

Strategic prospects for the transmission linepipe market, 2013 – 2033

Strategic prospects for the transmission linepipe market, 2013 – 2033

3. The evolution and structure of the global large diameter
linepipe market

3. The evolution and structure of the global large diameter
linepipe market

Introduction

Yet safety must be an over-riding concern and especially to guard against the consequences of a pipeline
failing in service.

The sheer volumes of crude oil and natural gas required every year, and
the need for long distance transport to the point of consumption, make
the study of energy transmission both important and complex.Crude oil
and natural gas may be conveyed by a number of means of transport,
but for long distance transmission there is essentially a choice of using
ships or pipelines.

IN THIS CHAPTER
Introduction

81

Many pipelines are old, especially those used to transport crude oil.MBR estimates that, whilst over 38% of
the world’s transmission pipeline network is less than 20 years old, a further 25% is between 20 and 40 years
old and 37% is over 40 years old (Chart 17).In the USA, federal data indicates that over half the transmission
pipe network for oil and gas is over 50 years old. This is a recognised issue but one that is often faced with
reluctance given the disruption and cost that can be necessary when existing pipelines are replaced. Yet the
consequences of not maintaining, repairing and eventually replacing pipelines can be disastrous. Given that
the transmission of fluids by pipeline is still relatively new, MBR believes that the industry is still understanding
how best to manage these issues.Modern pipelines are built to exacting standards and have state-of-the-art
monitoring, but pipelines build before the 1970s or 1980s are unlikely to do so.

The increasing size of very large crude oil (and increasingly, LNG) carriers has meant that
over long distances, usually about 3000 km, sea transport is the most economical route. Yet
pipelines have strategic advantages in that, once built, they can convey large quantities of
fluids at relatively low cost over long distances with good reliability, not perfect but better than
any other mode of transport. The Keystone XL pipeline project extension, conveying heavy
crude from the tar sands region of Alberta, Canada to the refineries of the USA’s Gulf Coast,
has highlighted many of the advantages of pipelines as well as the issues faced by the industry
today.

Figure 28: Relative age of the world’s transmission pipeline network

Understanding the development of transmission pipelines by country and by fluid type.
It is useful to understand how pipelines have evolved over the last 20 years. Because there are
no central records, and definitions differ, this is not a straightforward exercise.
The Oil & Gas Journal maintains records of pipelines installed each year with a focus on
the energy sector.The CIA also keeps records of pipeline length by country and fluid type
and reports these annually in its World Factbook. Some countries, for example the USA and
Canada, also maintain databases of their pipeline networks that are publicly available via their
organisations PHMSA and CEPA respectively. MBR has used these and other sources and its
own analysis and research to build a detailed picture of the structure of the world transmission
pipeline network in 1993 and also in 2013.By understanding the drivers for growth, and the
changing patterns of pipeline distribution by fluid type and country, it has been possible to
build scenarios for future growth.It has also been possible to estimate the proportion of each
country’s pipeline network that is over 20 years old.This is not an exact science but is helpful in
determining pipeline replacement potential as well as future growth rates.

Under 20 years

Over 40 years

Source: MBR estimates

Pipelines have the ability to work well for periods of excess of 40 years so long as they have been build
with high integrity and well maintained.In many countries, pipelines built before 1970 are still in service.
Prior to 1970, standards for materials selection, welding and maintenance were less rigorous. There are
increased risks associated with ageing pipeline networks.Age itself is not the only risk factor, but pipelines
older than 30 years tend not to have effective corrosion protection coatings and weld integrity is not to
modern standards. The linepipe steels used are also likely to be less well specified and manufactured, as
standards and process control of steelmaking and subsequent processing have improved significantly over
this timescale.The extent to which a pipeline will be corroded is a function of the local conditions.Offshore
pipelines face much greater potential for corrosion.Many of these are less than 20 years old but their
condition must be monitored regularly.With a modern pipeline system this can be done using intelligent
pigs. There is a not insignificant cost to this that must be taken into account.

Natural gas has grown strongly over the last 20 years.Although crude oil consumption
worldwide still exceeds that of natural gas, the global gas pipeline transmission network is over
three times larger than that for crude oil. Natural gas is transmitted at much higher pressures
than crude oil posing a different set of materials selection requirements including the need
for stronger and more resil