The global oil and gas infrastructure market size was estimated at USD 664.69 billion in 2022 and is projected to hit around USD 1,230.25 billion by 2032, poised to grow at a CAGR of 6.35% during the forecast period from 2023 to 2032.
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Infrastructure for oil and gas refers to the structures, pieces of technology, and networks that energy businesses require to function. To find and utilise energy resources, upstream oil and gas companies need infrastructure. Access to the infrastructure required for processing and refining fuel is available to midstream producers. Also, downstream producers supply and sell petrol and oil to merchants by using the infrastructure.
The market for oil and gas infrastructure will continue to expand due to the increased demand for natural gas. Natural gas is the cleanest fossil fuel on earth and has neither a colour nor a smell. Four hydrocarbon atoms and one carbon atom make up its structure (CH4 or methane). Natural gas production must increase to meet the rising global demand, and infrastructure must be built. For instance, the annual production of natural gas plant liquids (NGPLs), a key component of the U.S. Federal Statistical System, reportedly hit a new high of approximately 5.40 million barrels per day in 2021. As a result, the market for oil and gas infrastructure is driven by the increasing demand for natural gas.
The market for oil and gas infrastructure has identified technological developments as the primary trend that is growing in popularity. To improve their position in the market, major players in the oil and gas infrastructure sector are creating cutting-edge technology. For instance, the US-based aircraft technology giant Airbus will introduce satellite-based inspection services for oil and gas infrastructure in August 2022. Before harm or damage is done to the environment, its inhabitants, or its equipment, oil and gas infrastructure inspection is necessary to identify issues that could jeopardise infrastructure integrity. With the rapid advancement of satellite technology, it is now feasible to see photos at incredibly high resolutions.
According to Pleiades Neo, optical images can have a resolution of 30 cm while radar images can have a resolution of 25 cm (TerraSAR-X). Astonishing 15 cm resolution is now provided by the recently announced Pléiades Neo HD15 imaging product. These tremendously high resolutions make it possible to inspect pipes, machines, and other equipment in great detail. The ideal sensor will depend on the application at hand and the quantity of cloud cover. Radar sensors, on the other hand, can see through clouds and offer monitoring that is not reliant on the weather or the time of day.
| Report Coverage | Details |
| Market Size in 2023 | USD 706.9 Billion |
| Market Size by 2032 | USD 1,230.25 Billion |
| Growth Rate from 2023 to 2032 | CAGR of 6.35% |
| Largest Market | North America |
| Base Year | 2022 |
| Forecast Period | 2023 to 2032 |
| Segments Covered | By Category, By Operation, and By Deployment |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America and Middle East & Africa |
Drivers:
Increase gas pipeline
In 2021, natural gas consumption reached 4037.5 billion cubic meters (bcm), mostly as a result of rising demand for fuel across a variety of sectors, including transportation and power generation. The infrastructure for gas pipelines is set to grow greatly as a result of this trend, which is predicted to last for the foreseeable future.
The demand for natural gas is anticipated to experience the largest increase of all fuel types by 2030 as a result of the advantages to the environment and the need for energy security in places like the Middle East, Africa, and Asia-Pacific. Russian shipments of LNG remained the greatest in the world in 2021, totaling 201.7 billion cubic meters. The demand for the natural gas pipeline network is anticipated to rise as a result of the expected large growth in the worldwide LNG trade.
Worldwide, 408 new gas pipelines totaling 193,400 km are being built now or in the planning stages as of 2021, while 510 renovations and capacity additions to existing infrastructure are also under way. According to the Global Energy Monitor, 16 gas pipelines totaling 3,200 kilometres (km) and EUR 6.5 billion are being built in Europe. The Baltic Pipe Project, which is anticipated to improve EU gas import capacity by 10 billion cubic meters annually, is allocated EUR 2.1 billion of this total. The discovery of new natural gas sources, including shale gas reserves, and the pressure on prices that follows are expanding the global market for natural gas. Thus, it is anticipated that during the projected period, these changes will increase demand for pipeline network growth.
Restrain:
High cost of oil and gas pipeline is also restraining the market
Since major declines and increases in oil prices have a negative effect on government and consumer spending, market volatility is likely to be detrimental. In contrast, a significant increase in oil prices had led to rising inflation, a current account deficit, and a fiscal deficit in nations like India and China, which primarily import oil.
The decline in oil prices is having a negative impact on government spending in nations like Saudi Arabia, Nigeria, and the UAE (United Arab Emirates), which are heavily dependent on revenues from crude oil exports. For instance, due to a significant decline in the revenues from oil exports, which has an impact on the market, the Saudi government is expected to reduce its spending from 1.05 trillion riyals ($280 billion) in 2019 to 1.02 trillion riyals ($270 billion) in 2020 and to 955 billion riyals ($255 billion) by 2022. It is anticipated that the market will suffer as a result of the current high level of oil price volatility.
Opportunity:
high demand for natural gas and crude oil across the electricity sector
Through 2030, the market for oil, gas, and NGL pipelines is expected to grow rapidly. The paradigm shift towards gas-based power plants and the rising demand for propylene, ethylene, and other natural gas liquids will be what motivates investment in infrastructure development. The prevention of oil and gas pipeline disruption along with the incorporation of cutting-edge security technologies would enhance the oil and gas infrastructure market industry statistics and make operations secure, cost-effective, and productive.
Increased market share will result from accelerating spending on the construction of LNG terminals and changing trends in natural gas pipeline networks. Also, the demand for natural gas in tandem with the quick growth of the infrastructure for gas transportation throughout growing economies will lead to the need for infrastructure. The usage of CNG and LNG as substitute fuels for petrol and diesel has been encouraged by government initiatives to minimise carbon footprints and greenhouse gas emissions, which will support the natural gas infrastructure industry. Furthermore, the United States has seen a boost in the use of LNG cryogenic applications in the industrial sector, which will foster corporate growth.
Impact of Covid 19:
The demand for oil and gas infrastructure is being hampered by the Covid-19 outbreak in numerous applications. Companies' financial positions have suffered as a result of the pandemic. Deals on gas and oil pipelines were postponed in the majority of the countries as a result of the government-imposed shutdown. The two most impacted nations were the United States and India. The usage of electricity fell in these nations. Lockdowns had an impact on these nations' petrol usage as well. The global oil & gas infrastructure market has suffered as a result of the Covid-19 epidemic.
The oil and gas industry's major players are battling oil price wars, declining demand, and assuring employee safety and company strength. As the world emerges from the COVID-19 crisis, they need to concentrate on developing a flexible business that can result in long-term pliability. The supply chain has been hampered by the industrial slowdown brought on by the COVID-19 epidemic. The full-scale activities of market players are expected to be hampered by a disruption in the supply of raw materials.
The segment's distribution pipeline represented the highest revenue share. The segment expansion is anticipated to be driven by increasing consumption in end-use categories such the expanding number of gas-fired power plants, the chemical industry, the manufacturing industry, and the residential and commercial sectors. With extensive inter-regional trade in the form of imports and exports, the segment is anticipated to have rapid expansion in nations like the United States, Russia, China, and other European countries. The category expansion, however, may be hampered by the market liberalization's sluggish progress. For example, National Oil Companies (NOCs) have access to transmission pipelines in China without having any rights to third-party lines.
The need for crude oil and natural gas is expected to increase exploration and production operations, which would likely propel the oilfield equipment over the forecast period. However, the erratic price of oil and gas is making oil and gas operators hesitant, which is probably going to limit the growth of oilfield equipment in the next years. Due to rising exploration and production activities, the drilling rigs segment is predicted to dominate the market throughout the forecast period. In the upcoming years, market players should benefit from advancements in deepwater and ultra-deepwater drilling activities in the area, including Brazil, Norway, and the United Kingdom.
The International Energy Agency (IEA) projects that China will boost global energy consumption by 30% by 2025. Moreover, China's imports of natural gas have been rising steadily, reaching 162.7 bcm in 2021, in order to fulfil the rising demand. State-owned businesses in China, such as CNPC and China National Offshore Oil Company, have plans to increase output at nearby gas fields, which will increase the demand for pipelines in the area. A contract for the seventh development phase of ONGC's pipeline replacement projects was also given to L&T Hydrocarbon Engineering Limited in January 2022. Engineering, procurement, construction, installation, and commissioning of about 350 km of subsea pipes and offshore activities are included in EPCIC's contract.
Moreover, China National Offshore Oil Company and TotalEnergies reached a definitive investment decision with Uganda and Tanzania in February 2022 to start more than USD 10 billion in investments to produce and export crude oil from Uganda. The project involves building a $5 billion oil pipeline to help move crude from landlocked Uganda to international markets via a port on Tanzania's Indian Ocean coast. As a result, the expansion of pipeline infrastructure and rising demand in the Asia-Pacific region are key contributors to the growth of the oil and gas market.
Segment Covered in the Report:
By Category
By Operation
By Deployment
By Geography
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