... Pipeline Corrosion Market on the Rise - North American Energy Pipelines

Pipeline Corrosion Market on the Rise

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While the new energy pipeline construction market is experiencing uncertainty, protecting those assets remains a strong business.

The energy pipeline corrosion control market had a strong year in 2021 and is poised for growth in the near-term future, according to Dirk van Oostendorp, director of engineering services for Corrpro Cos. Inc., a subsidiary of Aegion.

“The corrosion market is buoyant and growing,” van Oostendorp says. “That’s driven by a number of different factors. If you break the market up into segments, you have the oil and gas side, which has a couple of subsets. With recent fluctuations in oil prices, many pipeline companies are assessing their near-term investment strategies for capital expansion. However, certain aspects of corrosion control are locked in by state and federal regulations, and the operators have fairly structured integrity management programs in place.”

Other sectors of the corrosion control market, such as municipal water, power stations, bridges and buildings, are also experiencing growth, van Oostendorp adds, mostly driven by aging infrastructure.
“The big message is corrosion is a problem that is not unique to oil and gas infrastructure,” he says. “It touches everyone. In that sense, when thinking about the new Infrastructure Bill, corrosion prevention represents a large portion of the overall investment.”

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One aspect of pipeline corrosion control was the focus of a recent report released on Jan. 20 by market research firm Future Market Insights (FMI). The study showed that the global oil and gas pipeline coatings market registered a year-on-year growth of 5.5 percent in 2021. Demand in the oil and gas pipeline coatings market is projected to grow at an annual rate of 5.6 percent between 2022 and 2029. FMI forecasts the market value to top $4.7 billion (USD) in 2022.

Witnessing robust expansion over 2022-2029, the global market for oil and gas pipeline coatings will reach the revenues worth $7 billion toward the end of 2029, according to the research. FMI reports that growing offshore exploration and production activities, stabilizing crude oil prices, a rise in cross-country pipeline projects and rehabilitation of existing pipelines are some of the key factors that would account for increasing demand for oil and gas pipeline coatings in the market.

While van Oostendorp also sees growth in the North American pipeline corrosion market, there is some division regarding investment.

“The market must be viewed as having two subsets, existing pipelines and new construction,” van Oostendorp says. “New installation is capital driven. If you’re building a new pipeline, the regulations require that you have to have corrosion prevention measures in place. Over the last 18 months, however, there have been fewer commitments to capital funding for large-scale pipeline projects. On the existing pipeline side, the market is regulatory driven. PHMSA requires companies to perform audits on their corrosion prevention systems and pipeline inspection on a regular basis with defined intervals.”

Compared to the rest of the world, the North American pipeline corrosion market is more advanced in some respects, says Jim Holden, technical director of energy and engineered solutions at Cortec Corp.
“Overall, the North American market does a better job addressing corrosion, but still has a lot of room for improvement,” Holden says. “One area that gets little attention is corrosion under insulation (CUI).”
Holden says certain outside forces have led some pipeline operators to choose certain technologies over
other solutions.

“In the last few years, it seems as though some of the pipeline regulations, safety and environmental concerns have become harsher, with some companies leaning towards corrosion monitoring and control such as corrosion inhibitor dosing systems and pipeline intrusion detection systems,” Holden says.

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Slow Down, Bounce Back

Like many sectors of the pipeline industry, the COVID-19 pandemic forced some companies to cut back on corrosion related costs, including a reluctance to spend money on needed repairs, says Larry Mudd, director of corrosion engineering and field services at Cortec Global Services, a division of Cortec Corp. The pandemic has also led to other challenges that still persist today.

“It has greatly impacted the means to conduct on-site equipment assessments,” Mudd says. “Also, plant shutdowns due to economic impact, transportation and shipment of equipment that used to be able to arrive on site in two to three months could now take 10 to 12 months.”

However, Mudd sees improvement in the market for the year ahead.

“I think you will see a slight increase in the monies allocated for corrosion prevention,” he says, “especially for the ID of new pipelines.”

Advancing Technology

Technology and education have led to a number of advancements in the pipeline corrosion industry, but some of those developments still face resistance to full adaptation.

“I would say that a decade ago, there was more mystery around corrosion prevention and the science behind it,” van Oostendorp says. “It is presently better understood and many new technologies have evolved through research and development.”

As the industry has progressed, van Oostendorp says more automation has entered the market, and predictive diagnostics and machine learning are allowing operators to better understand data collected about their assets.

“A decade ago, the process was somewhat ‘mandraulic’, where you deployed many people to conduct the inspections and surveys,” he says. “Advances in microelectronics now permit remote monitoring of operating assets, using cellular communication systems coupled with cloud servers. The ability to rapidly transmit large data files and then drive data analytics have caused a shift in some sectors from being reactive to predictive. Instead of responding to in-service failures with costly emergency repairs, we have the ability to predict remaining time-to-failure and plan interventions in a more programmatic approach.”
An added benefit of corrosion monitoring systems becoming more cloud-based is the accessibility to technicians in the field and engineers in the office.

“Now, people can access that data with a tablet or on their cell phones,” van Oostendorp says. “Speed and connectivity have improved, and along with it the ability to make better and quicker decisions.”
Van Oostendorp adds that there have also been continual innovations in the development in protective coatings for pipelines and related facilities, as well as in the materials themselves, extending the lifecycle of the infrastructure and reducing the number of times a coating needs to be reapplied.

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Facing Challenges

Despite advancements in corrosion control, Holden says that there is some resistance to new technology in the pipeline industry.

“I do not see the industry truly embracing some of the newer technologies. It tends to stay with technologies that are decades old,” Holden says. “I have not seen the market swing toward newer technology such as corrosion mitigation technology. In addition, the groups focusing on equipment and new technology are experts nearing retirement, thus potentially leaving a huge shortfall due to losing an enormous amount of knowledge.”

Van Oostendorp agrees that maintaining qualified personnel in the industry is a major challenge.
“Recruiting qualified technical personnel is a major challenge. The low unemployment rates mean there are simply fewer candidates on the market looking for new opportunities,” he says. “At the same time, we’re seeing many industry veterans reaching retirement. The pandemic has also seen many people reassess their personal situations and use this as the perfect opportunity to step away. Being able to maintain a staff of qualified individuals is a challenge, both on the service and operator side.”

There are also some challenges in hiring newer employees because of an environmental stigma, van Oostendorp says.

“Focus on renewables and sustainable energy sources have changed many peoples’ views on the oil and gas industry,” he says. “Many graduates entering the workforce prefer to work in other technical functions. That’s a secondary wave of influence on the market, where an increasing numbers of new grads view oil and gas less favorably.”

Another challenge facing the pipeline corrosion market stems from the initial development of a pipeline.
“[There is a] failure to include adequate consideration for corrosion prevention during the design phase of a project,” Mudd says. “Prevention and/or remediation of corrosion is not being funded.”

Outlook for the Future

The short-term and long-term outlook for the corrosion market in North America appears strong, with increasing concerns related to environmental stewardship and aging

“I think both short- and long-term outlooks are driven by environmental concerns as the world strives to reduce greenhouse emissions and the demand for energy increases,” Holden says.
Mudd says that owner/operators need to consider the impact of both internal and external corrosion on operating lines.

“New coatings and methods need to be evaluated for both internal and external corrosion,” Mudd says. “Cathodic protection, the old tried and true method of corrosion protection, is only good when you have good metal to ground connections. Conventional coatings are good until scratched or chipped. Complementary products and processes exist, which can be used with or in lieu of these to enhance corrosion prevention.”

Van Oostendorp views this as an exciting time to be in the corrosion
control sector.

“There are exciting opportunities for a young engineer coming into this business,” van Oostendorp says. “The opportunity for career growth and diversity of experience in the industry is exciting, I believe. We have become reliant on an aging infrastructure, which will require increasing attention to maintain. Not just pipelines but also bridges, railways and water systems are showing signs of aging, and the amount of effort required to maintain these assets will continue to increase.”

Bradley Kramer is managing editor of North American Energy Pipelines. Contact him at bkramer@benjaminmedia.com.


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