The contract that was awarded to Saipem by South Stream Transport B.V. for the construction of the first line of the South Stream Offshore Pipeline for a total value of approximately € 2 billion has been cancelled. The Castoro Sei and S7000 were contracted to install the first string and Allsea’s Pieter Schelte was contracted to install the second string however Saipem and Allseas have been notified of installation contract cancellations and have stopped operations for the project. The project included pipeline strings of 931 km for each causing a drastic decrease in demand days for the Africa/Medit. region. Quest had indicated this project could be in jeopardy due to the Russian-Ukrainian crisis which put the necessary permissions from the EU at risk.
2018 and 2019 is expected to see over 11,000km installed in the combined two years for this category. Global installation demand will account for over 47,000 installation demand days forecasted for 2016 to 2019 with Africa, Asia and South America being the largest contributors to demand for all OD categories.
Following Petrobras, in order, are Chevron, BP, Statoil, ENI, Anadarko, Inpex, Total, Royal Dutch Shell, and Petronas Carigali in the top 10 list of operator’s forecasted installations between 2014 and 2019. The top 10 list features three NOC’s (Petrobras, Statoil, and Petronas Carigali), five majors (Chevron, BP, Total, Royal Dutch Shell, and Eni), and two independents (Anadarko and Inpex).
Petrobras is projected to account for the most pipeline installation when compared to other offshore oil and gas operators with approximately 5,925 km of pipelines installing between 2014 and 2019.
Australia, particularly the gas-rich areas of Northwest Australia, is projected to account for 31% of the 9,491 km of pipelines projected to be installed between 2014 and 2019 in the Asia Pacific region. However Malaysia, Indonesia and other Southeast Asian countries are projected to surpass Australia accounting for 41% of the total Asia Pacific forecast demand activity. Conceptual risk remains, however, in the potential choice of FLNG units over the more conventional pipeline to shore LNG developments currently being executed in latter term forecasted projects. Risk in the end of the forecast period and beyond exist due to uncertain LNG supply demand balance.
Regions such as the Eastern Mediterranean, North Africa, and East Africa are projected to provide a diversity of demand sources apart from the traditional hot spots of Nigeria and Angola. The trend toward geographic diversity in pipeline installation will continue throughout the forecast period.
South American pipeline installation, which is overwhelmingly focused offshore Brazil and operated by Petrobras, will account for 66% of global flexible flow line installations from 2014-2019. The majority of this South American flexible flowline demand will be attributed to the infield flowlines serving deepwater, pre-salt FPSO developments. South America is projected to account for 3,630 km of flexible flowline installation out of a total global figure of 5,444 km from 2014 through 2019. The region’s importance to flexible flowline demand is further evidenced by significant local manufacturing capacity additions.
The massive pre-salt reserves discovered in the Santos Basin, which has very little existing pipeline infrastructure when compared to the more mature Campos Basin, will lead to significant investment in pre-salt associated gas export infrastructure, such as the Rota Cabiunas and Rota Marica pipelines, in addition to infield flexible flowlines serving multiple FPSO systems per field.
The Africa Mediterranean and Asia Pacific regions are poised to account for 53% of global pipeline installation from 2014 through 2019 with projected counts of 7,197 km and 9,491 km respectively.
Global projected pipeline installations are set to grow to 31,582 km in 2014 through 2019 compared to 25,660 km of pipelines installed from 2008 to 2013.