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The global pipeline integrity management market size was USD 8.65 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with PIM witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a slow growth of 1.5% in 2020. The market is projected to grow from USD 8.80 billion in 2021 to USD 11.26 billion in 2028 at a CAGR of 3.6% in the 2021-2028 period. The sudden fall in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Pipeline integrity management (PIM) is the process of continuous evaluation of the pipeline used for oil and natural gas transmission to ensure safe and reliable operations. Public safety and environmental concerns are important factors that are needed to be considered during pipeline construction. As these pipelines carry flammable gases and liquids under high pressure, any leakages or accidents during operation would lead to a huge loss to the environment and life. Pipeline owner-operators manage PIM programs. All stages of the pipeline life cycle, starting from conception to engineering, design, construction, operation, inspection, and finally repair/replacement when necessary, are looked upon in the management programs.
Diminished Oil & Gas Demand to Hamper Market During Coronavirus
The global health emergency caused by the sudden spread of the novel coronavirus has had a negative impact on every industry. Industries had to suffer a significant loss in operational time owing to the imposition of strict policies such as nation-wide lockdowns to curb the spread of the virus. Accordingly, the outbreak of the disease has altered the demand for crude oil and natural gas in a very severe manner which has led to a drop in oil prices. For instance, in May 2020, the oil cost dropped to USD 20.37 per barrel, its lowest level since February 2002. This declined demand is due to travel restrictions across nations and has led to the lengthening of the period of the current pipeline projects being carried out. This in turn, will hamper the future investment in the pipeline's integrity management.
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Stringent Government Regulations for Oil and Gas Pipeline to Drive Pipeline Integrity Management Market Growth
The increasing energy demand has led to an expansion of the oil and gas pipeline network in various countries. Following this, the operating pipeline’s safety is one of the major concerns that has led governments to put stringent regulations to ensure maximum safety, smooth operations, and timely check which will circumvent any mishaps such as leakages and accidents. These regulations also promote a competitive market that helps improve the whole transmission and distribution chain. For instance, in the U.S, all the facility integrity management of the oil and gas pipelines has to comply with the National Energy Board Act (NEB Act) and Onshore Pipeline Regulations (OPR). Various amendments have been observed since these were brought into action in 1999.
Increasing Oil and Gas Trade Between Countries Will Drive the Adoption of Pipeline Integrity Management Services
As every country is not rich in crude oil and natural gas reserves, over the last decade, with rising energy demand for each nation, the oil and gas trade between countries has bloomed. This has led to the construction of offshore pipelines to transmit crude oil and natural gas. For instance, the major producers such as Russia, U.S., Kuwait, Saudi Arabia, and others suffice the oil demand for many nations such as China and India. This trend is expected to continue in coming years with the population in countries expected to rise. This will lead to more and more transmission pipelines for trade between nations to make energy available in different parts.
Increasing Demand for Energy in Various Sectors to Surge Demand for PIM Services
The increasing population and migration of people from rural to urban areas have resulted in a spike in energy demand from every application sector. Currently, renewables are in an early stage of adoption, the major portion of power generation and energy are still fulfilled by oil and gas. This factor is set to increase the oil and gas demand to even higher levels across the globe in the forthcoming years. According to a United Nations report, 68% of the world’s total population is expected to be living in urban areas in 2050, which is currently at 55% in 2018. This will incite the need for increased production capacities, supply lines, transportation lines and therefore fueling the market growth.
Increased Preference towards Natural Gas to Aid Growth
Natural gas has less harmful emissions as compared to gasoline and other oil products. This has led natural gas to become a priority fuel in the transportation industry (CNG), power generation, and industrial sectors. Developed and developing nations are looking forward to increasing the use of natural gas across various end-use industries by replacing coal and oil with natural gas in all possible scenarios. This has led to the construction of new natural gas pipelines across countries and opened opportunities for market players to offer their pipeline integrity management services.
Rising Adoption of Renewable Sources to Pose Threat to the Market
The growing adoption of renewable energy sources such as solar and wind is one of the biggest threats to the PIM market. The increased use of these sources due to their environmental and economic advantage will directly cancel out the requirement of oil and gas. This will directly have a negative impact on oil and gas production and, thus restricting the market growth. Here are some of the renewable energy targets set by various countries to achieve in the forthcoming years. Brazil aims to have 42.5% of its primary energy supply to be renewable by the end of 2023. According to the brief carbon analysis, the UK government aims to have about half of its electricity by renewable sources in 2025. Germany is on its path to account for renewable energy for 65% of its total energy by 2030. China plans to achieve 16% of its energy by renewable by 2030.
Rising Exploration Activities at Increased Depth and in Harsh Conditions Will Drive the Investment in the Offshore Sector
Based on the location, the global pipeline integrity management market is broadly categorized into onshore and offshore. In recent years leading oil-producing companies such as Petrobras have increased their offshore production activities at increased depths and harsh locations, owing to hydrocarbons. This has led to pipelines being constructed and opening opportunities for the PIM investment. The onshore segment has also witnessed a healthy rise owing to the shale gas boom in North America and the increasing number of wells being drilled in the Middle East region.
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Higher Cost Incurred for Repairs and Refurbishment Has Led to its Domination in the Market
Based on service, the global market is divided into inspection service, cleaning service, and repair and refurbishment. The repair and maintenance mainly consist of replacing a part or equipment in the pipeline and pipeline monitoring system, which has a higher cost than inspections and cleaning. Therefore, repair and maintenance segments have been the dominant segment in the market for years, and this trend is set to continue over the forecast period. Periodic inspections for ensuring protection from rusting and scheduled cleaning of the pipeline are carried out to maintain proper functioning and avoid huge financial losses.
The market has been analyzed across major regions, including North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa. The U.S. is the world leader in terms of having oil and gas pipeline infrastructure and holds the highest market on the country level. The presence of several key players in the market has also attracted investment here. Canada is also a strong force in terms of established oil and gas infrastructure. The oil trade with neighboring countries in the South America region has also contributed to North America’s market. Owing to all these factors, North America holds a significant share in the global PIM market.
Europe also holds a strong position in the market, with a large chunk of production done in Russia and then transportation to neighboring countries. Other oil and gas producing nations such as Norway, UK, Denmark, Italy, and others have also contributed to the region's market.
Asia Pacific is projected to grow at a very healthy rate in coming years with rising production and refining capacities in India and China. The region has also risen to become one of the largest energy consumers over the last decade, which has increased the level of imports from the Middle East countries.
The Middle East and Africa and Latin America are home to leading oil-producing nations at onshore and offshore locations, respectively, and hold a significant market with numerous transmissions, distribution, and gathering lines.
North America Pipeline Integrity Management Market Size, 2020 (USD Billion)
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Enbridge, and TransCanada to Lead With their Brand Stability and Wide Customer Reach
The global market has observed different players aiming towards delivering an optimal solution for pipeline integrity management. The players are involved in rigorous research and developments to enhance the management systems performance characteristics to improve the efficiency of the pipeline and identify the failures at the earliest to minimize the financial loss and negative impact on the environment. These major players are always looking to be satisfying all the rules and regulations of the governing body managing the pipeline structures. As the market is vast and has many players from around the globe, each one aims to magnify its reach to customers and attract contracts from pipeline operators.
An Infographic Representation of Pipeline Integrity Management Market
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Value (USD Billion)
Fortune Business Insights says that the global market size was USD 8.65 billion in 2020 and is projected to reach USD 11.26 billion by 2028.
In 2020, the North American market size stood at USD 5.42 billion.
The market is likely to grow at a CAGR of 3.6% exhibiting substantial growth over the forecast period (2021-2028).
The repairs and refurbishment services are expected to dominate this market during the forecast period.
Rapidly increasing energy demand and rigorous exploration activities at onshore and offshore locations are some of the key factors driving this market.
Enbridge, Baker Hughes, TC Energy, and GE are some of the key participants operating across the industry.
North America dominated the market in terms of share in 2020.
As the demand for oil and gas rises the need for a robust pipeline network to carry products to different locations expands subsequently. Therefore, strict regulations to ensure these pipelines are monitored will spur demand for PIM.
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