Oil & Gas Pipeline Construction in the US Industry Market Research Report from IBISWorld Has Been Updated

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Increases in energy prices and advancements in extraction technologies have caused significant growth in domestic oil and natural gas production, and higher production has consequently boosted demand for pipeline construction to connect existing infrastructure and markets. For this reason, industry research firm IBISWorld has updated a report on Oil & Gas Pipeline Construction in its growing industry report collection.

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Pressure to expand existing infrastructure will spur modest growth.

Pipelines are essential for transporting vital fuel supplies to households and businesses. The aftermath of global energy price hikes and the opening of natural gas fields early in the five-year period to 2013, led to extraordinary investment growth in domestic energy resource developments. This occurrence underpinned demand for pipeline and related infrastructure construction. Currently, heavy investment in natural gas and oil infrastructure construction has the Oil and Gas Pipeline Construction industry booming. Increases in energy prices and advancements in extraction technologies have caused significant increases in domestic oil and natural gas production. In turn, higher production has also boosted demand for pipeline construction to connect existing infrastructure and markets. As a result, industry revenue is expected to grow at an average annual rate in the five years to 2013.

The Oil & Gas Pipeline Construction industry managed to perform relatively well during the five years through 2013, despite the recession. Discoveries of natural gas resources in the Bakken oil field in North Dakota and the Appalachian basin drove demand for increased pipeline capacity. The emergence of hydraulic fracturing and horizontal drilling has also been fueling a rush of new pipeline proposals, as current pipeline capacity struggles to meet demand from oil and gas producers. According to the US Energy Information Association, the amount of pipeline capacity added in 2012 dropped to its lowest level in 15 years. Consequently, IBISWorld expects that industry revenue will rise in 2013, as pipeline bottlenecks lifts demand for additional pipeline mileage. Additionally, industry profit is expected to increase from recessionary lows in 2013, as the world price of steel, a key input for the industry, is expected to decline in the year.

The industry has a low degree of concentration and the four largest companies (Fluor Corporation, Bechtel Corporation, Jacobs Engineering Group Inc. and McDermott International Inc.) account for just over 20.0% of industry revenue in 2013 (see IBISWorld report 23712 for major player market shares). However, despite the prevalence of many small-scale participants, this industry contains several very large-scale establishments that contribute a significant share of industry revenue. Looking forward, according to IBISWorld Industry Analyst James Crompton, “the industry is projected to experience strong demand, as new natural gas resources require infrastructure and existing pipelines to reach capacity.” In the five years to 2018, IBISWorld forecasts that continued investment in unconventional domestic energy sources (e.g. shale gas and oil sands), the need to repair, replace and expand existing infrastructure and the recovery in residential construction will bolster industry performance. As a result, “the industry is forecast to generate steady annual revenue growth in the five years to 2018,” says Crompton.

For more information, visit IBISWorld’s Oil & Gas Pipeline Construction in the US industry report page.

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IBISWorld industry Report Key Topics
The Oil & Gas Pipeline Construction industry comprises contractors that are responsible for the construction of gas and oil pipelines, mains, pumping stations, refineries and storage tanks (i.e. new work, reconstruction and repairs). It also includes construction management companies and special trade contractors that are primarily involved in oil and pipeline construction.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld Inc.
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