Oil & Gas Industry Likely to See More Spending in the Americas
In the first of three webinars on the Oil & Gas Industry to be held this year, experts from Industrial Info examined spending trends in the Americas. With more than 120,000 active projects in progress that boast a total investment value of nearly $14 trillion, the three major segments--upstream, midstream and downstream--are seeing an improvement in their fortunes.
Gordon Gorrie, Industrial Info's Vice President of Research for Oil & Gas, said that steadying oil prices have been a positive factor in moving projects from the planning and engineering phases into construction.
"This is against the previous three years or so, where the project fallout rate has been quite high, probably greater than 50%," Gorrie said. "That kind of led to a depressed market, as we all have seen. As it stands today, I do not believe the fallout rate will be as high as in previous years, and we'll likely see previous on-hold projects reinstated--but perhaps with lower [total investment value]."
The U.S. accounts for about two-thirds of the more than $129 billion of projects that are now under construction in North and South America. Shane Mullins, Industrial Info's Vice President of Product Development, expects spending to continue accelerating in the U.S oil & gas market over the next year or so: Production is down, but exports (especially liquefied natural gas (LNG)) are up, resulting in tighter market conditions that are driving up prices.
"We're really going to witness a real step-change in natural gas demand coming our way," Mullins said. "When you look at LNG exports, which are now at 2.1 billion cubic feet per day, coming out of Sabine Pass, that's going to grow to 9 billion cubic feet per day by 2020. There's still 30 gigawatts worth of new power construction currently under construction that's going to add another 4.5 billion cubic feet per day of demand. And we still have quite a bit of industrial petrochemical demand coming our way."
To see the full presentation and accompanying graphics, click here.
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