Market Trends of Middle-East Oil And Gas Line Pipe Industry
Seamless Type Segment to Witness a Significant Growth
- Seamless line pipes are small pieces of a long pipeline that are made by heating and reshaping solid rods of steel, called billets, into round shapes.These billets are further heated and then pierced by a bullet-shaped piercer, over which the steel gets stretched and takes the shape of a hollow pipe without having any seams on its surface.
- These types of line pipes are usually suitable for high-pressure applications such as in the oil and gas midstream sector, refineries, the chemical industry, etc. Moreover, the general application of such line pipes depends on their thickness. Thus, high-pressure applications are required to have higher thicknesses.
- Several advantages of using these line pipes include their ability to improve the pipeline's ability to withstand pressure, the uniformity of shape required to install other equipment between two-line pipes, and their greater strength under load. However, despite having several advantages, these line pipes also have an equal number of disadvantages that generally occur in them during production. These disadvantages include high cost, residual stresses caused by unstable cooling that create deformation, and uneven thickness and pipe width after cooling.
- Moreover, in 2021, the Middle Eastern region was the largest producer of crude oil, producing 1315.8 million tons, which accounted for 31.2% of the global crude oil production and was greater than the production in 2020, which was 1294.9 million tons. The increasing demand and production of oil and gas in the region in recent years gave rise to several seamless pipeline projects.
- For instance, in September 2022, the National Petroleum Construction Company (NPCC) was granted a USD 548 million contract by the Abu Dhabi National Oil Company (ADNOC) to build a new gas pipeline at its Lower Zakum field offshore Abu Dhabi. The new undersea pipeline will connect Zakum West Super Complex to Das Island and be finished in 2025. Such projects transporting corrosive fluids or gas in the oil and gas industry are expected to propel the market growth for seamless line pipes during the forecast period.
- Therefore, based on the above-mentioned factors, the market for seamless line pipes is expected to witness significant growth, which, in turn, increases the demand for the oil and gas line pipe market during the forecast period.
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Saudi Arabia to Dominate the Market
- Saudi Arabia was the world's second-largest crude oil producer at 10.95 million barrels per day and the world's eighth-largest natural gas producer at 11.35 billion cubic feet per day as of 2021.
- Additionally, Saudi Arabia also has the world's fifth-largest estimated shale gas reserve. Thus, it has great potential for the country to replicate North America's unconventional reserve development growth. The increasing exploitation of unconventional reserves is expected to drive the demand for line pipes at multiple gatherings and treatment stations.
- By 2028, Saudi Aramco plans to produce 0.65 bcm of natural gas per day and is expected to target unconventional gas reserves in North Arabia, South Ghawar, and the Jafurah Basin, east of Ghawar.
- Saudi Aramco and Saudi Basic Industries Corp. (SABIC) plan to set up a joint oil-to-chemicals project that produces chemicals and base oils directly from 20 million tons of crude oil per annum. It is expected that the facility is likely to be completed by 2028, thus witnessing the significant application of line pipes.
- With upgrades and expansion projects in refineries like SASREF, Petro Rabigh, and Jubail, as well as the launch of the Jizan refinery, the deployment of line pipes in Saudi Arabia is expected to increase considerably.
- In November 2022, according to engineering firms, Aramco was expected to issue a large tender for 1.6 million metric tons of 56-inch non-sour surface pipelines required for the Master Gas III project. The new pipes will assist Aramco in transporting gas from the east to the west of Saudi Arabia. Thus, with this kind of project, demand for oil and gas line pipes is expected to increase in the country.
- With increasing gas production-117.3 billion standard cubic meters in 2021-the demand for line pipes grew considerably. Additionally, with new refining projects, Saudi Arabia is expected to dominate the oil and gas pipeline market in the Middle Eastern region.
- Therefore, based on the above-mentioned factors, Saudi Arabia is expected to dominate the oil and gas line pipe market over the forecast period.
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