Global oil and gas projects pipeline at US$4 trn

7 Dec 2017 GLOBAL ENERGY & UTILITIES

The global oil and gas projects pipeline, as tracked by the Construction Intelligence Center (CIC), is worth US$4.0 trillion. The Americas accounts for the highest value with US$1.28 trillion, followed by Asia-Pacific with projects valuing US$1.23 trillion.   

The Middle East and Africa has oil and gas projects with a value of US$1.11 trillion, while the pipeline for Europe is valued at US$382.7 billion.

 

Global oil consumption is estimated to be 98 million barrels (bbl) per day (Q3 2017), and is forecast to reach over 100 million bbl per day by Q3 2018. Oil and gas production is determined by fluctuating prices, demand and investment. The agreement between the Organization of Petroleum Exporting Countries (OPEC) and Russia to reduce output by 1.2 million bbl per day, together with Russia’s reduction by 600,000 bbl per day has helped to rebalance supply and demand and has revitalized investment in the oil and gas industry. Oil prices have risen to reach US$56.6/bbl West Texas Intermediate (WTI) in mid-November 2017, from a low of US$26.21/bbl in February 2016.

 

The number of global rigs declined from 3,600 in mid-2014 to fewer than 1,500 in mid-2016. According to the International Energy Agency (IEA), global investment in oil and gas reduced from US$873 billion in 2015 to US$649 billion in 2016, during the period mid-2014 to mid-2016 of reduced oil and gas prices.

 

The traditional oil and gas producers in the Middle East, represented by the Gulf Cooperation Council (GCC) countries and headed by Saudi Arabia, are no longer the leaders in investment in the sector. Indeed, the top ten global countries for oil and gas construction project investment, as tracked by the CIC, do not include any Middle East countries, with only Nigeria representing the Middle East and Africa (MEA).

 

In terms of global consumption, the US is the largest consumer of both oil and gas, with 796.4 millions of tonnes of oil equivalent (mtoe) for oil and 635.86mtoe for gas in 2015, according to the IEA. China is second for oil consumption with 535.9mtoe, and is behind Russia for natural gas consumption with 159.2mtoe.

 

CIC analysis shows the Americas to have the highest value of oil and gas construction projects, with US$1.28 trillion. Canada leads with US$532.9 billion, followed by the US with US$405.7 billion, meaning both countries are responsible for 73% of the region’s output for oil and gas projects.

 

The global oil and gas projects pipeline is well advanced, with projects at the execution stage valued at US$1.45 trillion, compared with US$1.24 trillion in planning. Projects in the pre-execution stage amount to US$784.3 billion, while those at the pre-planning stage have a value of US$534.1 billion.

 

Private investment is responsible for the funding of the highest proportion of projects, with 56%, with joint public and private funding at 27%, and the remaining 17% of projects financed solely by public funding.

 

Assuming all projects tracked go ahead as planned, annual spending will reach US$819.9 billion in 2019, and reduce to US$447.4 billion in 2021. The highest value of completions for the projects will occur in 2020, with a value of US$812.5 billion.

 

Globally, refinery buildings is the highest value category, based on CIC tracked projects with a value of US$1.27 trillion, followed by production facilities with a value of US$1.23 trillion. Liquefaction plants follow, with projects valued at US$761.0 billion, followed by pipelines with a value of US$598.0 billion. The two lowest value categories in the sector are storage tanks with projects with a value of US$86.9 billion, and regasification plants with US$57.2 billion.

 

Asia-Pacific has the highest value of refinery buildings projects, with a value of US$574.8 billion, while the Middle East and Africa has the highest value of production facilities, with a value of US$444.9 billion. The Americas dominates for the value of liquefaction plants, with projects valued at US$484.3 billion.

 

The highest valued project is in Brazil: the US$80.0 billion Libra Offshore Oil Field Development


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