The latest EIC Monitor tracking new active and future projects across the global energy industry shows growth in potential investment value across all sectors this quarter.
The total potential investment value of new projects this quarter (Q3: July – September 2011) is US$ 484 billion - up 65% on last quarter’s value of US$ 293 billion, while, overall, the number of new projects (508) is down 9% on last quarter’s report. The oil & gas sector has seen the largest rise in potential investment value of new projects, while renewables continue to perform well with a rise of 31% and power remains relatively flat with a 2% increase.
Upstream, midstream and downstream sectors
The upstream sector has seen a slight increase in the number of new projects up from 65 in Q2 2011 to 67 in Q3 2011. These represent a 95% increase in potential investment value over the same period, from US$ 19.9 billion to US$ 38.8 billion. This increase is largely due to two major project announcements: the US$ 9 billion Block CA-2 gas exploration project in Brunei Darussalam and the US$ 5 billion Madar gas field in Iran. Both projects are at the early stages of development.
The midstream sector has seen a 26% increase in the number of new projects up from 61 to 77, and a 315% increase in project value since Q2 2011, up from US$ 45.3 billion to US$ 142.4 billion in this quarter. This huge increase is solely due to the proposed US$ 100 billion Trans-Asian Oil and Gas pipeline, the first natural gas pipeline network between the ASEAN countries and China, due to be operational in 10 years time. The US is a hotspot of activity for the midstream sector this quarter, representing a third of the projects announced with 25 projects potentially worth US$ 11.9 billion.
In the downstream sector, the number of new quarterly projects in Q3 2011 has increased by 11% since Q2 2011 to 78 projects with an 88% increase in the total potential investment value to US$ 99.2 billion. China represents over 25% of the new projects in this quarter’s downstream figures, representing US$13.5 billion. The largest projects can be found in Canada with the US$ 15 billion active North West Redwater Refinery project; Azerbaijan with the US$ 15 billion future Garadagh oil, gas processing and petrochemical complex; and India with the future US$10.8 billion Vizag (Visakhapatnam) refinery and petrochemical complex.
Global power projects
In the renewables sector while the number of new projects has decreased by 21% in Q3 2011 to 172, the potential investment value has risen from US$ 85 billion to US$ 111.1 billion, a 31% rise from Q2 2011. Key hotspots of activity can be found in the UK, USA and one major project in India, the US$ 22 billion future Siang Upper Hydro Power plant. The UK continues to develop its renewables portfolio with 84 new projects while the USA has 21 projects valued at US$ 13.2 billion.
In the power sector, the number of new projects (114) has decreased by 22% this quarter with the potential total investment value of new projects remaining almost the same at US$ 92.6 billion in Q3 2011. The UK and USA are leading the way with a combined potential investment value of US$ 30.8 billion spread over 26 projects. The bulk of the USA’s projects are focused around transmission line networks while the UK figures are dominated by the US$ 16 billion proposed new nuclear power plant adjacent to the existing Sellafield plant in West Cumbria.
Overall, these figures show that the energy industry continues to hold steady. While the number of new projects announced this quarter is down on last quarter’s report, the corresponding increase in the value of new projects across all sectors of the energy industry is an encouraging sign that confidence is slowly returning to the market and there are plenty of new business opportunities for the energy supply chain.
Author: Mike Major, CEO of the EIC
The EIC is hosting EIC Connect Power 2011, the largest international supply chain event of the year for the UK power industry on 23 & 24 November 2011 at London Olympia. The event features an outstanding line up of global operators and contractors who will be outlining current projects and procurement policies to the supply chain as part of their presentations. For further details visit www.eic-connect.co.uk
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