Energy Pipeline Construction Remains Strong

By Rita Tubb, Managing Editor | November 2012, Vol. 67, No. 11

Underground Construction/Pipeline & Gas Journal’s latest international survey indicates 89,233 miles of new and planned oil and gas pipelines are under construction and planned. Of these 49,488 miles account for projects in the planning and engineering phase and 39,745 miles are in various stages of construction.

Based on BP’s recently released Statistical Review of World Energy 2011, many more miles of new pipelines will be needed to meet global energy consumption demand which grew 5.6 percent in 2011, the highest increase since 1973. The report credits the increase to rebounding economies after the recession and strong growth among developing nations.

The report shows oil consumption grew 3.1 percent last year, the highest since 2004. It shows a strong rise in natural gas consumption which rose 7.4 percent, the largest gain by volume on record. Coal use rose by 5.2 percent, its highest single-year jump in 31 years. Chinese energy consumption grew by 11.2 percent, as China surpassed the U.S. as the world’s largest energy consumer for the first time in 2010.

As several countries in the Asia Pacific region lead the way in the global economic recovery, it is not surprising this region accounts for the highest number of new and planned pipeline miles in the six basic country groupings (see accompanying map) used in this report. Here is a breakdown of the pipeline miles planned and under construction in each respective area: Asia Pacific Region – 36,596; South-Central America, Caribbean – 12,079; and Western Europe and European Union countries –2,330; Middle East – 8,455; former Soviet Union and Eastern European countries – 22,029; Africa – 7,744.

Asia Pacific region
Fast-growing Asian economies are driving global energy demand growth and taking an increasingly larger share of oil and gas markets from developed economies.

China, India and Australia remain the most active in the region in terms of pipelines planned and under construction. Much of the activity in China is centered around China National Petroleum Corp. (CNPC), the country’s largest oil and gas producer and supplier, that remains focused on coordinating domestic and international resources and markets to safeguard China’s energy security.

CNPC plans to double the length of pipelines laid during its 12th Five Year plan – 2011-2015 - vs. the 2006-2011 Five Year plan when 167,775 miles of pipeline were constructed. This would indicate construction of some 335,550 miles, or 67,100 miles per year, by the end of 2015.