Underground Infrastructure - January 2023 - 20

CONSTRUCTIONOUTLOOK
NA Pipeline Construction Outlook
Jeff Awalt | Executive Editor
TABLE 1.
Region
North America
Western Europe/EU
Asia-Pacific/Australia
Africa
Russia and CIS
South, Central America/
Caribbean
Middle East
Miles Under Construction
8,548
4,312
12,010
2,774
5,722
4,429
1,226
Miles Planned
10,321
7,770
19,511
12,252
10,912
8,852
5,714
Total
18,869
12,082
31,521
15,026
16,684
13,281
6,940
Seldom has a new year arrived with the degree of supply and
demand uncertainty facing global energy markets at the start
of 2023.
Months of soaring oil and natural gas prices gave way in late
2022 as oil demand projections softened on recessionary fears
and Europe's months-long buying spree filled its natural gas
storage levels to near capacity. Counterintuitively, Brent prices
fell further in December even as the OPEC+ cartel announced
new supply cuts and Europe's ban on Russian oil imports
forced Moscow to reroute supplies.
That was partly because the OPEC+ cuts turned out to be
harsher on paper than in practice. The announced 2 MMbpd
- roughly 2 percent of global supply - turned out to be more
like 1 MMbpd, as some cartel members struggled to make quotas.
The impact of European price caps on Russian oil and gas,
meanwhile, remained questionable as 2022 came to a close.
While 2022's rollercoaster pricing fell into backwardation
before year-end, there were enough contrarian indicators to
give December's bears heartburn.
U.S. shale production, which provided most of the world's
supply growth in recent years, has fallen to a snail's pace as producers
react to higher costs and lower prices. A months-long
selloff of U.S. strategic reserves appeared poised for reversal as
pricing approached the $70/bbl level that would trigger a refill.
Indications of slowing inflation and an anticipated softening
of China's demand-crushing COVID policies also support
projections of tight gas supplies in 2023.
" China's COVID policy is the most important fundamental
factor for global demand in commodities and energy in 2023, as
its demand softness due to lockdowns in 2022 was a key safety
valve for oil, gas and coal markets, while Europe scrambled to
replace Russian energy, " Dan Klein, head of Energy Pathways
at S&P Global Commodity Insights, said in December.
" With another year of vaccinations and growing frustrations
with lockdowns domestically in China, " Klein said, " restrictions
will likely ease somewhat in 2023 and imports of fossil
fuels can be expected to increase again. "
Natural gas impacts
Activity in global pipeline construction markets is predominantly
driven by natural gas, with Europe eyeing new sources to
20 JANUARY 2023 | UndergroundInfrastructure.com
http://www.UndergroundInfrastructure.com
Underground Infrastructure - January 2023

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