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Global energy industry remains buoyant, according to EIC Monitor
EIC quarterly report tracking new projects in the global energy industry shows a mixed bag of results with power and renewables leading the way although some slow down in the oil & gas sectors.
The global energy industry remains focused with encouraging levels of new projects emerging according to EIC Monitor, a quarterly report from the EIC, the leading trade association for UK companies that supply capital goods and services to the energy industries worldwide. EIC monitor reports newly announced projects across the global energy supply chain. The Q2 (April – June 2010) report reveals that the number of new projects remains healthy although the total potential investment value has fallen. The power and renewables sectors account for over half of all new projects and investment potential in Q2 2010. The upstream and downstream sectors have seen decreases in both new project numbers and values since the previous quarter.
EIC Monitor tracks over 7,900 active and future projects in the global energy industry and provides an industry barometer, broken down into oil and gas (downstream, midstream, upstream), nuclear and conventional power and the renewables sectors. Data is analysed by the number and value of new, active and proposed projects recorded by the EIC each quarter.
Key highlights of Q2 2010 report (1 April – 30 June 2010):
· Overall this quarter, the total number of new projects has dropped slightly on the previous quarter but is still significantly higher on the same quarter in 2009. Potential investment value has fallen by around 6% since the same quarter last year. In Q2 2010 there were 409 new projects across the global energy supply chain with an estimated total value of US$287 billion, compared to 426 in Q1 2010 totaling US$509 billion and 336 new projects in Q2 2009 worth US$306 billion.
· In the renewable sector the number of new projects is much the same as the previous quarter although the value of these has dropped. The previous quarter, Q1 2010, was dominated by the US$150 billion Round 3 UK offshore wind program.
· In the power sector, there has been a slight increase in the number of projects although the potential total investment value is down by 14.5%, possibly reflecting a slight move towards smaller decentralized power generation in some regions.
· The upstream sector has seen a 30% drop in both the number of new projects and project value since the previous quarter.
· The midstream sector has seen a slight growth in the number of projects although with a 26% decrease in project value since Q1 2010.
· In the downstream sector, the number of new quarterly projects remains similar although the total investment value has dropped by a third since Q1 2010.
In nearly all cases newly proposed projects must first undergo various planning and consent approvals which may take several years. Also, early stage proposals do not necessarily have financing agreed and in place. Thus there will always be a proportion of projects that do not gain consent and/or finance.
Commenting on the EIC Monitor,
“While the potential investment value across all sectors has dropped slightly this quarter, it is encouraging to see that the number of new projects being proposed is holding steady and the global energy industry remains buoyant. Power and renewables continue to be the primary sources of new project proposals but there are still plenty of opportunities for energy supply chain companies across all sectors.”
Summary of Q2 new projects by number and value
The graphs below show the total number and value of new projects across the global energy supply chain for Q2 2010 and the previous four quarters.
Analysis by sector
Renewables:
· There have been 123 new projects in the renewables sector totaling US$68.4 billion in Q2 2010.
· In comparison there were:
o 124 new projects totaling US$224 billion in Q1 2010.
o 87 new projects totaling US$77.2 billion in Q2 2009.
· The most significant new projects this quarter are the 11,300MW Asa Branca offshore wind project and a number of Round 2 offshore wind expansion projects in the UK totaling 1,522MW with a value of $7.2 billion.
Upstream:
· There have been 64 new projects in the upstream sector totaling US$33.9 billion in Q2 2010.
· In comparison, there were:
o 92 new projects totaling US$49.5 billion in Q1 2010.
o 113 new projects totaling US$61.7 billion in Q2 2009.
· Brazil has seen some significant new projects emerging including the construction of 28 drilling rigs destined for the sub-salt territories and also the Franco & Libra prospects which are expected to be the largest discoveries in the Santos basin after Tupi.
Downstream:
· There have been 57 new projects in the downstream sector totaling US$48.2 billion in Q2 2010.
· In comparison, there were:
o 60 new projects totaling US$72.3 billion in Q1 2010.
o 37 new projects totaling US$31.2 billion in Q2 2009.
· Again new projects are widespread although Indonesia and China in particular have several large schemes emerging. Indonesia has three refinery projects at Masela, Cilegon and Tuban totaling $17 billion. China has a number of petrochemical based projects and a $3.8 billion synthetic natural gas project at Qitai.
Power:
· There have been 109 new projects in the power sector totalling US$117 billion in Q2 2010.
· In comparison there were:
o 99 new projects totaling US$137 billion in Q1 2010.
o 93 new projects totaling US$113 billion in Q2 2009.
· India features heavily with 19 new projects totaling $31 billion of investment potential. China announces three more nuclear plants. South America has seen nine new projects totaling just under 5,000MW. Europe has seen a number of larger projects struggling with consenting and finance issues. Several new energy from waste schemes and biomass power projects are being proposed in the UK.
Midstream:
· There have been 56 new projects in the midstream sector totalling US$19 billion in Q2 2010.
· In comparison, there were:
o 51 new projects totaling US$25.8 billion in Q1 2010.
o 36 new projects totaling US$21.9 billion in Q2 2009.
· Again new and emerging projects are well distributed. The largest of these are the US$3 billion Beyneu to Shymkent Gas Pipeline in Kazakhstan and the US$2 billion Newcastle LNG plant in Australia. China and the USA have the largest number of new projects.
EIC Monitor is published on a quarterly basis. The next report will be available in October 2010. For further information about the EIC and its membership of more than 600 UK companies operating across the energy supply chain, visit www.the-eic.com.
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