World Demand for Oil & Gas Pipe to Reach 51.8 Million Tons in 2017

World demand for oil and gas pipe is expected to increase 5.3% per year, reaching 51.8 million metric tons in 2017 as high oil prices and increasing demand for energy spur new development. Increased oil and gas production will require additional investment in pipeline infrastructure. Demand for gas pipe will strongly outpace that for oil pipe, due in large part to infrastructure development. New pipelines will range from domestic lines to transnational systems that deliver natural gas to markets such as Europe. These and other trends are presented in World Oil & Gas Pipe, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.
Demand gains for oil country tubular goods (OCTG) will outpace growth in the number of drilling rigs through the forecast period, due in part to the fact that rigs are becoming more efficient and are drilling more wells per year. In addition, rising OCTG pipe demand will result from increased offshore activity, deeper wells, and growing use of horizontal drilling techniques.  
Demand for line pipe will benefit from construction of new transmission lines needed to transport oil and gas from drilling sites to customers, and the need for gathering systems at new drilling sites. Plastic pipe demand will grow as it gains share from steel in gathering applications. Steel pipe will remain the dominant line pipe material because of its high pressure resistance. Seamless pipe has outpaced welded pipe in recent years, reflecting strong growth for OCTG since those applications more frequently require the strength of seamless pipe. Due to its lower price, welded pipe will continue to be preferred in applications where operating conditions allow its use.  
   North America, the largest market for oil and gas pipe in 2012, will see increased demand due to the development of shale plays, especially in areas such as North Dakota that have not until recently been major energy producers. China, which dominates oil and gas pipe demand in Asia, will experience solid market growth as the country continues to construct energy infrastructure, particularly in the gas segment. Demand in Africa will benefit from development of offshore wells off the west coast. In addition, the Middle East will see strong gains due to sustained growth for large producers such as Saudi Arabia. Demand in Brazil will benefit from an expanding offshore sector, including considerable activity in pre-salt zones, as well as increased onshore activity.   

World oil & gas pipe demand (kt)

Item             2007     2012  2017     YoY growth 2007-2012    YoY growth 2012-2017
Oil & Gas
Pipe Demand       33592 40090 51800         3.6                      5.3
North America  9840     12060 15110         4.2                      4.6
Central &
South America  1954      2460    3310         4.7                      6.1
Europe           6920      6775    8705         -0.4                      5.1
Africa/Mideast 6383      7225    9435         2.5                      5.5
Asia/Pacific   8495      11570    15240         6.4                      5.7