Forecast International: Mechanical Drive Turbines Boom as Pipeline Industry Expands

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The rapid expansion of the natural gas pipeline industry has driven a 16.7 percent increase in the sales value of mechanical drive industrial gas turbines to be delivered between 2019 and 2028, compared with the previous 10-year period.

From early 2019, an increasing number of orders have resulted from the modernization of existing pipelines by increasing compressor station capacity and building additional stations on existing pipelines.

The rapid expansion of the natural gas pipeline industry has driven a 16.7 percent increase in the sales value of mechanical drive industrial gas turbines to be delivered between 2019 and 2028, compared with the previous 10-year period. These turbines will have a total value of $23.95 billion

Stuart Slade, Senior Industrial and Marine Gas Turbine Analyst for Forecast International, said pipeline modernizations are partly responsible for the surge in new mechanical drive orders. "From early 2019, an increasing number of orders have resulted from the modernization of existing pipelines by increasing compressor station capacity and building additional stations on existing pipelines." He added that "the start of an extensive program of new pipeline construction has also resulted in a significant number of new orders."

As a result of these factors, a total of 3,294 turbines will be sold between 2019 and 2028, an increase of about 7.9 percent over the total for the 2018-2017 period. This understates the full extent of the surge, however, since older, lower-output turbines are being replaced by new and more powerful units. Slade also notes that "since these new turbines exploit technology advances to make them more efficient in terms of fuel use, this trend is likely to continue and will probably accelerate."

The international liquefied natural gas (LNG) trade is expanding at a spectacular pace. The estimated consumption of natural gas in 2016 was over 125 trillion cubic feet (Tcf), representing a 67 percent increase over a period of 20 years. By 2025 it is estimated that this consumption will be around 156 Tcf and account for over 25 percent of the projected world demand. Slade suggests that "since pipelines offer the most economical means of transporting natural gas and their cost advantages increase with distance, this sustained increase in demand will further enhance the mechanical drive turbine market."

Forecast International's analysis suggests that in years to come, more than 55 percent of the mechanical drive machines produced will be 7.5 MW and larger. Slade believes that "the market for those machines will be driven by new large scale, high-capacity pipeline and platform construction. This will continue to benefit the adoption of high powered aeroderivative machines, including the GE LM2500/2500+ and the Siemens family of industrial gas turbines."

This process has had a particular impact on Solar Turbines Inc, which has seen a stream of orders throughout 2019 to replace older and smaller Solar Centaur and Taurus gas turbines. This activity has substantially boosted the company's profile and placed it in a good position to exploit the growing wave of new orders.

About Forecast International
Forecast International, Inc. is a leading provider of Market Intelligence and Consulting in the areas of aerospace, defense, power systems and military electronics. Based in Newtown, Conn., USA, the company specializes in long-range industry forecasts and market assessments used by strategic planners, marketing professionals, military organizations, and governments worldwide. Forecast International also maintains a high posture of situational awareness and geopolitical analysis.

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Ray Peterson, Vice President, Research & Editorial Services
@ForecastIntl
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