MethodologyContact usLogin
While the three biggest consuming regions – the United States, Russia and China – will register modest consumption growth, at best, in the immediate forecast period, it is the markets outside these areas that are projected to be the major contributors to global OCTG demand growth through 2020.
In particular, the Middle East and Africa region is starting to gather attention, driven by rising drilling focused on increasing gas production, often in offshore conditions, to supply the liquefied natural gas (LNG) export markets mainly directed toward Asia. Half of the global natural demand growth over the next five years will come from Asia. Despite China’s energy independence policy, China will continue to be a growing LNG importer. Indeed, China’s domestic gas supplies will be insufficient to meet its share of demand during the forecast period.
In the Middle East, countries expected to record the strongest OCTG consumption growth will not necessarily be the big markets, such as Saudi Arabia, but rather Iraq, Qatar, the United Arab Emirates (UAE) and Oman, which are all forecast to show strong demand growth over the next couple of years. The Qatari market in particular is developing gas supplies for LNG to the Asian market.
In Africa, Algeria returned to the procurement market in a sensational fashion at the end of 2018, and purchases are expected to be strong here through 2020. Our forecast suggests Algeria will surge back to be the largest OCTG-consuming market on the continent ahead of Egypt. It is set to be joined by newcomers such as Mozambique, Senegal and others in South America such as Guyana.
In the meantime, the Asia Pacific market has also stepped up its game in the offshore drilling market. China’s national offshore operator, China National Offshore Oil Corp (CNOOC), has invested heavily in developing its own offshore assets, resulting in consecutive growth in gas production volumes in recent years. More drilling activity is planned.
Thailand’s national oil company, PTT Exploration and Production (PTTEP), will increase its offshore rig counts to 11 rigs in five years from only one offshore rig now by acquiring Chevron Thai’s offshore assets.
There is a risk in the development of merchant LNG capacity in that a slowing Chinese economy might struggle to absorb rising LNG supply in the medium term as it did through the 2017-2018 period. This would affect drilling programs across some of the Middle East and African markets in the near term.
Fastmarkets’ research team produces a quarterly online platform forecasting the five-year outlook for OCTG demand, supply and pricing to keep you up to date with developments in these markets. Please click here to take a look.
Please contact us at hello@fastmarkets.com to learn more about our Global OCTG Intelligence Service.