Subsea Trencher Market Size, Share & COVID-19 Impact Analysis, By Type (Jet, Mechanical), By Application (Pipeline Burial, Cable Burial, Umbilical Burial), and Regional Forecast, 2021-2028

The global subsea trencher market size was USD 259.1 million in 2020. The market is projected to grow from USD 271.4 million in 2021 to USD 392.6 million in 2028 at a CAGR of 5.4% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with offshore construction activities witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of -12.4% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market's demand and growth, returning to pre-pandemic levels once the pandemic is over.

The remarkable development in offshore oil & gas activities worldwide has led to the growth of burial of subsea pipelines. Revolution in fields, such as renewable energy, has led to the development of offshore wind potential, thereby increasing the demand for offshore cable burial. The growth of the telecommunication sector has propelled offshore cable burial further to facilitate digitalization across the world. Subsea trenching machines or marine trenchers dig trenches on the seabed to facilitate the burial of subsea pipelines, cables, and umbilicals. The burial of these pipelines, cables, and umbilicals prevents them from getting damaged due to various activities like fishing, and anchorage of ships.

Disruption in Offshore Oil & Gas Activities amid COVID-19 Impacted Global Subsea Trencher Market Growth

The COVID-19 pandemic has had a critical effect on every sector. Businesses have undergone substantial losses due to the imposition of strict rules such as countrywide lockdowns to limit the spread of the virus. Consequently, the outbreak of the virus has altered the demand for marine trencher. As the market is majorly dependent on offshore activities, the biggest collapse faced by the offshore oil and gas industry in a long time has also impacted the investment in the market. The surplus supply and low demand have forced leading oil and gas companies to temporarily stop offshore production activities, which eventually led to a surge in oil prices. This has directly impacted the demand for subsea pipeline installations and reduced the subsea cable demand, including the use of the equipment.

LATEST TRENDS

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Increasing Demand for Energy To Enhance Offshore Oil and Gas Activities and Pipelines

The growing urban population due to migration of people to urban areas resulted in a surge in energy demand from every application sector. Increased urbanization has led to an increase in commercial offices as well as industries. This has led to amplified demand for electricity, and hence, oil and gas.

Currently, renewables being in an initial stage of adoption, a majority of the power generation is still being achieved by fossil fuels. This factor is set to increase the crude oil and natural gas requirement across the globe in the forthcoming years. The high demand for fossil fuels is a major driving factor for offshore oil and gas production and exploration. This further drives the demand for setting up oil and gas pipelines across the seabed, making the offshore trenchers a crucial part of any project. Furthermore, the increasing offshore activities have driven the demand for umbilical cables to operate various subsea equipment. This has led to increasing demand for umbilical cable burial activity in the seabed.

According to the United Nations report, in 2050, almost 68% of the total global population is estimated to be living in urban areas, which is currently at 56.15% in 2020. This will incite the need for increased energy requirements, which can only be fulfilled offshore. The continuously increasing urbanization is anticipated to continue accelerating this market growth.

Rapidly Expanding Internet Usage Across the Globe to Enhance Market Growth

With rapid growth of internet usage, the telecom sector has seen a boom in the last two decades. According to research by The Nielson Company and the International Telecommunication Union (ITU), around 65.6% of the total world population is an active internet user until March 31, 2021. This internet usage penetration rate shows a 1,331.9% increase from 2000.

The increasing internet usage has made it necessary to connect continents by submarine cables. These fiber-optic cables transmit signals worldwide, making it possible for users to use the internet and websites of various regions. The submarine cables laid and buried through the ocean seabeds to connect continents.

The laying and burying process of the fiber-optic submarine cables finds major use of submarine trenchers to safely trench and place these cables to avoid any damage. According to TeleGeography, as of 2021, 426 submarine cables of a total 1.3 million kilometers length are in service globally. This length has risen from 1.2 million kilometers from the end of 2019.

DRIVING FACTORS

Increasing Offshore Activities to Enhance the Demand for Subsea Umbilicals

The rapid expansion of deep-water offshore projects and an ever-changing focus toward offshore activities will surge the demand for subsea umbilical installation. On September 13, 2021, the British government announced the biggest auction of its renewable energy projects to construct extra offshore wind capacity to power about 8 million homes. The contracts will be offered to power generation companies at auction.

Furthermore, the increasing number of offshore brownfields has increased the demand for subsea umbilicals to function various equipment. The growing number of crude oil and natural gas discoveries in the offshore will positively affect the subsea trenching equipment landscape.

Rising Adoption of Clean Energy Along With Stringent Emission Norms to Increase Subsea Cable Burial

Various national governments and organizations have set vast targets to deploy green energy technologies such as solar, wind, and others to diminish fossil fuel dependency. The devotion of various nations to exceed the required objectives will likely provide a great opportunity for the market. The lack of land space to set up wind turbines and solar farms has increasingly led to offshore technologies' growth. According to the IRENA, the offshore wind electricity capacity of the world has risen from 28,355 MW in 2019 to 34,367 MW in 2020, portraying a 21.21% increase year-on-year. Moreover, solar PV is being installed on water instead of land in recent years, called the floating PV. The floating PV system is fixed on a floating platform with an anchoring system in water bodies and is connected by subsea power cables.

The offshore wind turbines are connected to power cables that must be buried in seafloors to carry power from offshore wind turbines to onshore wind users. Further, subsea umbilical cables are also required for the constant maintenance activities of these wind turbines. These umbilical cables, too, are buried in the seabed for protection against hazards. The requirement of burying power cables and umbilical cables in seabed has risen due to growing offshore wind energy technologies. This trend is expected to continue growing rapidly, making marine trenchers imperative to every project.

RESTRAINING FACTORS

High Initial and Operating Cost of Equipment to Hinder Growth

Marine trenchers are used to make trenches on the seabed to lay underwater pipes, cables, and umbilicals. These trenchers require complex technologies to work at high underwater pressures and have to exert a massive force to dig trenches. The complex conditions increase the requirement for powerful and high-quality equipment. Furthermore, the trenchers are operated in a highly corrosive environment, making it necessary to use high-strength materials for the machine. Operating these trenchers requires skilled personnel with technical know-how and expertise.

The superior quality design requirement of the equipment increases its initial cost. Further, the requirement of consistent maintenance of the trencher due to its adverse operational conditions increases its maintenance costs. Also, the requirement of skilled operators increases the operational cost of the equipment. The high expenditure associated with marine trencher is a major hindrance to the market growth.

SEGMENTATION

By Type Analysis

Jet Trencher to Experience Robust Demand owing to High Precision

The market for marine trencher by type is broadly categorized into jet and mechanical. The preferred subsea trenching method in the North Sea, Atlantic Ocean, and the European continental waters is jet trenching due to its high precision.

The mechanical trenchers are used for trenching in hard clays and coarse-grained materials like the carbonate-rich seabed sediments, calcarenite rocks, and near-shore areas, which are majorly present in the Asia Pacific region and parts of the Mediterranean, exceptionally propels the segment growth.

By Application Analysis

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Increasing Subsea Pipeline Projects Will Lead to Domination of Pipeline Burial Segment

Based on application, the market is divided into pipeline burial, cable burial, and umbilical burial. With increasing offshore oil & gas production, combined with increasing imports of oil and gas globally, growth in large offshore pipeline projects has been observed. The increasing demand for subsea pipeline burial is propelling the segment growth. For instance, in September 2021, the Nord Stream 2 pipeline installation, one of the longest subsea pipelines, was completed. This pipeline starts from the coast of Russia and travels through the Baltic Sea to reach landfall near Greifswald in Germany.

Encouraging government initiatives to invest in clean energy will propel offshore wind power cable burial activities in various regions. As per the International Energy Agency (IEA), a geospatial analysis to assess offshore wind technical potential by country showed that the best offshore wind power sites could deliver almost 36,000 TWh globally per year, which is nearly the anticipated global electricity demand in 2040. Therefore, the cable burial segment is growing at an exceptional rate globally.  

REGIONAL INSIGHTS

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The global subsea trencher market has been analyzed across major regions, including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

Europe is the largest market for subsea trencher, owing to the region's great offshore oil and gas production potential. The growth in power demand and application of industrial gases in the steel industry, oil & gas, metal & mining, and manufacturing & processing industries leverages the demand for offshore pipelines across Europe. According to the European Commission's (EC) report on the gas market, Europe imported the largest volume of LNG in 2020 of around 85 billion cubic meters (bcm). The gas consumption in Europe is owing to the spot market and no capital expenditure from small players, which has accelerated the demand for subsea pipeline burial activities, and hence, marine trenchers in the region. Europe is also a leading region with the highest offshore wind capacity in the world. According to the International Renewable Energy Agency (IRENA), Europe accounted for 24,920 MW of electricity capacity by offshore wind power by 2020, showing a 13.12% year-on-year growth. The high investment in offshore wind power in the region propels the demand for subsea cable burial. This massively propels the market.

Asia Pacific is a developing economy. A significant increase in power demand and the growing awareness of renewable power generation propels the need for oil and gas transport pipelines, which drives the demand for offshore pipeline and cable burial activities. This, in turn, is anticipated to enhance the demand for subsea trencher in the region rapidly. The Asia Pacific is undergoing a digital transformation in all the industries, which brings telecom cables. Increasing application of submarine telecom cables drives the demand for subsea cable burial, which further drives the demand for marine trenchers. In August 2021, Google announced a new subsea cable Apricot that will connect Japan, Singapore, the Philippines, Taiwan, Guam, and Indonesia and is expected to be ready for service in 2024. China accounted for the second-largest offshore wind energy capacity of 8,990 MW in 2020, an almost 51.6% year-on-year growth. The massive subsea power cable burial activities required for the same are anticipated to bolster the market.

In North America, the U.S. holds a potential market for oil and gas transportation, supporting the rising energy demand, which drives the demand for the market. As per the International Renewable Energy Agency (IRENA), the United States accounted for 29 MW of electricity capacity by offshore wind power by 2020. The Biden administration, in 2021, pledged to grow the country's use of offshore wind energy, doubling use by 2030 to 30 GW.

Latin America holds potential growth opportunities for oil and gas transportation due to new investment projects on construction, expansion, and modernization of offshore oil and gas production. The future scope of the offshore pipeline burial in Latin America is massive and is anticipated to bolster the market in the forecast period. Further, there is a growing penetration of internet usage in the region. According to World Bank, 68.3% of the population of Latin America used the internet in 2019, compared to 65.7% in 2018. On August 10, 2021, Telxius, a digital telecommunications infrastructure operator, announced that the new Mistral submarine cable was ready for service. The Mistral system is a submarine cable that travels along the Latin American Pacific coast connecting Guatemala with Chile. Along the route, it connects Ecuador and Peru. The growing internet penetration in the region has given rise to subsea cable installations, propelling the marine trencher demand.

The Middle East & Africa is the noticeable region indulged in the business of oil & gas. The G.C.C. countries like Saudi Arabia, U.A.E., Qatar, Bahrain, Kuwait, and Oman, in the Middle East, are growing fast in energy demand. Hence, it has driven offshore oil & gas activities, increasing offshore pipeline burial activities in the Middle East & Africa markets. In September 2021, the Italian company Eni made a major discovery of offshore oil in the sedimentary basin of Côte d'Ivoire. Such efforts will likely enhance subsea pipeline burial in the region, paving the way for the equipment. The World Bank Group's 2019 'Going Global Report' valued South Africa's technical offshore potential to be 646 GW. The high potential is anticipated to create a demand for subsea cable burial, and hence, marine trenchers in the forecast period.

KEY INDUSTRY PLAYERS

Global Marine and Helix Energy Solutions Group to Lead with Wide Geographical Reach

The market has several key players focused on providing the equipment and services. The market players are developing various technological advancements like marine trenchers for increased depths and various attachments for enhancing performance characteristics. Majority of players in the market, especially Global Marine and Helix Energy Solutions, focus on subsea trenching service and solution contracts throughout the world. As the subsea pipeline, cable, and umbilical installations expand due to growing offshore activities, the market will have lucrative opportunities for companies.

LIST OF KEY COMPANIES PROFILED:

• Helix Energy Solutions Group (U.S.)


• Royal IHC (Netherlands)


• Miah Inc. (U.S.)


• Mastenbroek Limited (U.K.)


• DeepOcean (Norway)


• Osbit (U.K.)


• Seatools BV (Netherlands)


• Barth Hollanddrain (Netherlands)


• Delta Subsea LLC (U.S.)


• Soil Machine Dynamics Ltd. (U.K.)


• Allseas Engineering Technologies Applications Ltd. (Switzerland)


• Global Marine (U.K.)


• Seatrench (Norway)


• Global Offshore (U.K.)


• Company Service Swiss SA (Switzerland)


• Modus Ltd. (U.K.)


• Trident Group (Russia)


• IKM Subsea (Norway)


• Jan De Nul (Belgium)


• SEA S.R.L. (Italy)

KEY INDUSTRY DEVELOPMENTS:

• August 2021 – SEAJET Systems signed a manufacturing partnership agreement with Soil Machine Dynamics (SMD) for subsea excavation and trenching technology. The partnership will see SMD exclusively build, test, and commission the fleet of CFE equipment in its production facility in Wallsend, Newcastle upon Tyne.


• February 2021 - Seatools announced that it completed the delivery of a CT umbilical winch to its client Van Oord. The winch will provide power to Van Oord's new subsea trencher, which will be used for cable installation at an offshore wind farm.

REPORT COVERAGE

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The global subsea trencher market research report highlights provide regional and country-level analysis to offer a better understanding of the user. Furthermore, the market research reports provide insights into the latest market trends and market analysis of technologies deployed rapidly globally. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the industry.

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