The latest quarterly EIC Monitor (Q3, July – September 2010) shows encouraging levels of new projects emerging across the global energy industry with China, India and the USA having some of the largest new projects this quarter.
Despite the ongoing harsh economic environment, the industry appears to be holding steady with the power and renewables sectors continuing to retain their strong position as the dominant sectors of the industry, accounting for over two thirds of all new projects and investment potential in Q3 2010. The upstream and downstream sectors have both seen a decrease in new project numbers since the previous quarter, while the midstream sector has shown a rise in activity.
Overall this quarter, the total number of new projects has remained virtually static since the previous quarter and is still slightly lower on the same quarter in 2009. Potential investment value has fallen by around 17% since the same quarter last year. In Q3 2010 there were 413 new projects across the global energy supply chain with an estimated total value of US$ 301 billion, compared to 414 in Q2 2010 totaling US$ 300 billion and 473 new projects in Q3 2009 worth US$ 364 billion.
Global power projects
The power sector has seen an increase in both the number of new projects and in the total investment value, up by 13%. This quarter there have been 137 new projects totaling US$ 132 billion. In comparison there were 110 new projects totaling US$ 117 billion in Q2 2010 and 150 new projects totaling US$ 176 billion in Q3 2009.
India and China account for 43 new projects in the power sector, almost all thermal plants. The largest new project is the 8000 MWe Gujarat gas fired power plant representing a capital investment of US$ 8.6 billion. An increasing number of smaller energy from waste and biomass based power plants are emerging particularly within Europe.
In the renewables sector the number of new projects stands at 119 - potentially worth US$ 72.9 billion with the quarter showing a sharp drop in value from US 97.4 billion in Q2 2010 when there were 125 projects. The most significant new projects this quarter are five US based offshore wind farms. The largest developments are the Nantucket Island, Mustang Island and Rio Grande projects totaling US$ 18.5 billion.
Upstream, midstream and downstream sectors
The upstream sector continues to decline with a 28% drop in the number of new projects although total project value remains similar to the previous quarter. There have been 48 new projects in the upstream sector totaling US$ 22.35 billion in Q3 2010. The largest single new project is the US$ 10 billion Common Seawater Injection Scheme in Iraq, which aims to sustain pressure in the Rumaila, West Qurna, Zubair and Majnoon oil fields.
This quarter, the midstream sector has seen a further small growth in the number of projects although with a significant 64% increase in project value since Q2 2010. New projects are well distributed around the globe. The largest of these are the US$ 4.2 billion Bicentenario Crude Oil Pipeline in Colombia and the US$ 2.54 billion Guangxi Beihai LNG terminal in China. Once again China and the USA have the largest number of new projects with the latter proposing eight new pipeline projects.
In the downstream sector, the number of new quarterly projects has decreased from 57 to 48 this quarter, while the total investment has fallen slightly since Q2 2010 from US$ 48.5 to US$ 45.6 billion. New projects are widespread although Nigeria have announced three new refinery projects at Kogi, Bayelsa and Zamfara with a combined total investment of US$ 18 billion. China, India and the Middle East account for half of the new projects.
This quarter’s figures indicate that the global energy industry remains buoyant with the prospect of plenty of new projects across all sectors around the globe.
Author: Mike Major, CEO, EIC