Report Predicts Growth for US Onshore Pipelines Industry

Demand for onshore pipelines will increase in the United States, providing a positive outlook for the North American oil and gas industry, according to a new report conducted by Europe’s second largest steel producer, Tata Steel.

The study, produced by the company’s energy and power division, points to a rise in environmental concerns shifting energy demand towards natural gas and the continued growth in shale as the main drivers for increased investment in production and transport infrastructure.

The report also says the reduction in the price of natural gas combined with improved drilling technology will continue to maintain high oil production, resulting in further demand for pipelines.

Richard Broughton, Tata Steel’s commercial manager for energy pipelines, said: “US shale has been a game changer for the entire North American industry, potentially putting the US in a position to export energy for the first time. However, there is still a massive need for investment in infrastructure, particularly in production and transportation if this potential is to be realised.”

Overall the report paints a positive outlook for the North American oil and gas industry, with the findings suggesting that while a slow economy has had an effect on production activity in recent years, the increased investment in large-scale projects is now pointing the market towards an upturn.

Mr Broughton added: “There is no doubt the slow economic conditions have hurt the industry, particularly the supply chain. We are beginning to see positive signs in both the onshore and offshore sectors with deepwater projects in the Gulf of Mexico gathering pace once more. This upturn means that as an industry we must continue to invest in infrastructure, particularly in oil and gas transportation, which will be crucial to support the increased activity.”

The report comes on the back of encouraging data about the Americas overall with recent estimates suggesting Brazil is likely to become a net oil exporter by 2015 and recent discoveries will mean production in the region is currently outpacing demand growth.

Martyn Curnow, Tata Steel’s energy & power sales manager for the Americas, said: “The South American market, and in particular Brazil, includes some of the most promising opportunities for the global industry, with many significant energy reserves and discoveries in recent years. Given the deepwater geography of these fields, developing the correct infrastructure will be crucial.

“Tata Steel continues to remain at the forefront of the deepwater line pipe industry, with Brazil in particular providing an opportunity for Tata Steel to underline its technical leadership in some of the world’s most challenging environments.”

tatasteelenergy.com