Fastmarkets MB’s research team and Westwood Global Energy Group forecast a significant increase in the tonnage of CR and CRA OCTG grades required globally over the next few years despite the current volatility in oil prices.
Globally, the project team has also ramped up the number of prospective offshore fields that could utilize alloy grades of OCTG and linepipe to 183 from 110.
An increase in well depths and the number of wells targeting sour gas reservoirs point to increased requirements for corrosion-resistant OCTG in the sector.
Middle East will lead charge in tonnage and demand growth
In particular, we have revised demand significantly higher in the Middle East. The region is the largest consumer of higher value OCTG because of several sour and tight gas developments there - it accounts for 39% of global CRA OCTG consumption.
As well, Middle East National Oil Companies (NOCs) who operate under their long-term drilling programs are less vulnerable to the fluctuating oil prices. For clad and lined pipe, the UAE is a prime focus because sulfur capacity is growing strongly there.
Prices poised to rise
With the supply chain to deliver higher tonnages of these pipe grades becoming ever tighter, mill lead times are increasing to as long as 12 months. The team notes upward revisions for many of the longer-term forecasts for alloy prices, notably in the 13Cr OCTG grades.
Want to access this insight?
These revised forecasts are available in The Future of Corrosion Resistant Alloys report. To find out more, please click here
The Fastmarkets and Westwood team behind this report will be speaking at MEIS and will also be presenting at a drinks reception in Dubai Marina on December 12. If you are interested in joining, please register here