Pipeline Safety and Infrastructure Development in the MEA region

By Kapil Garg, Practice Lead /Associate Project Manager, Energy & Power Practice, MarketsandMarkets

Oil & Gas infrastructure includes, among other things, production facilities, liquefaction plants, refineries, pipelines, and storage tanks. According to a regional analysis of oil and gas construction projects, the Middle East and Africa (MEA) region has the largest share of projects, by value, with projects worth US $ 1.23 trillion in the pipeline accounting for approximately 45% of all projects in the pipeline globally.

The quest for enhancing safety protocols and ensuring the resilience of energy infrastructure has sparked a revolutionary transformation in the maintaining pipeline integrity. Experts, armed with advanced techniques and technologies, have spearheaded a new era in safeguarding pipelines, thereby significantly mitigating the risks associated with potential hazards.

Ultrasonic, pipeline inspection gauge(PIG), magnetic flux leakage, smart ball, fibreoptic technology, and other are the major technologies used for pipeline monitoring. For example, by using magnetic flux leakage technology, it is possible to identify the remaining wall thickness, depth, and the precise location of metal loss caused by deterioration mechanisms—particularly in steel/ferrous pipes.

Major concerns in MEA: threats and other risks

There have been major terrorist activities and cybercrimes in the MEA in the last two decades. Military adversaries, organized oil smugglers, and armed rebels also create threatening situations. Political unrest, internal disputes, and governmental instabilities in countries in the Middle East and Africa regions have significantly hampered the overall production of oil and gas and have created potential threats to oil and gas plants and pipelines carrying these media. The majority of conflicts are due to economic issues and the failure of parties to agree on the terms of transit, expenses sharing, and taxes. Cross-border pipeline operators face tax risks, although the governments involved sign pipeline agreements. Also, the government laws proposed internationally for cross-border pipelines are becoming more complex.

Market outlook

The region consists of major oil & gas producing countries such as Saudi Arabia, the UAE, and Iran, Qatar, and Nigeria which have some of the largest petroleum reserves in the world. Countries such as Saudi Arabia, UAE, Iran, and others export most of their production to neighbouring Asian countries such as China and India, which have high energy demand. Likewise, increasing oil & gas demand in other developing countries and the augmented demand for pipeline monitoring due to improved pipeline infrastructure offer excellent opportunities to this market.

Pipe monitoring system market trends in MEA

Pipe monitoring system market trends in MEA/Source: Investor Presentations, Interviews with Experts, and MarketsandMarkets Analysis

Upcoming oil & gas developments to fuel pipeline growth

The African region possess 125 billion barrels of proven oil reserves as of 2022. There are new exploration activities undertaken in many African countries such as Libya, Namibia, Angola, and Uganda in recent years. Uganda, a country with proven oil reserves for the past 20 years is expected to start oil production from Tilenga project by 2025. The heavy investment in developing the infrastructure will lead ways to pipeline monitoring market.

Africa’s key upcoming pipeline projects

Africa’s key upcoming pipeline projects/Source: Secondary Research, and MnM Knowledge Store

The maintenance of pipeline integrity via monitoring also faces further hurdles in face of skilled workers. Another significant challenge lies in the extensive network of existing pipelines, posing difficulties in conducting comprehensive monitoring. Furthermore, factors such as ageing infrastructure, remote locations, and harsh environmental conditions contribute to accessibility challenges.