Pipeline Integrity & ILI Service Market Remains Strong and Resilient

The pipeline integrity and ILI services market is anticipated to grow 6.2% in 2023 versus 2022 and overall, the pipeline integrity services market remains strong and resilient.

These findings are based on over 200 interviews conducted by Kimberlite Oilfield Research with pipeline operators worldwide and published in the recently released 2023 Pipeline Integrity & ILI Supplier Performance Report which serves as an industry benchmark report for the segment.

The exhibit below illustrates the Diffusion Index for pipeline integrity management services versus that of the broader upstream drilling services market and reflects the resilience and relative stability of the pipeline integrity services market versus the upstream drilling market.

The drilling services market experienced a sharp contraction in 2015 and 2016 (note indices below the critical “50” index) and again went into deep contraction in 2020 due to COVID as the drilling rig count in US land plummeted from over 800 drilling rigs to 200 drilling rigs. By contrast, the pipeline integrity services market experienced a decline in activity due to logistical constraints and budget adjustments that in many cases delayed pipeline integrity initiatives that were deemed to be “non-critical”, but overall, the pipeline services market exhibits stability and does not experience the volatile up and down cycles realized in the drilling services market.

These attributes make the pipeline integrity services market an attractive area for investors and suppliers to invest in and grow to help diversify revenue and earnings.

Oil and gas demand will continue to increase over the next decade and additional investment in the oil & gas industry will be required to meet the global demand. Current policy and regulatory environment support higher oil prices while capital discipline among the oil & gas operators and oilfield service suppliers will maintain a sustainable and profitable environment for investors in both the upstream and midstream sectors of the oil & gas industry.

In addition, many pipeline operators are planning to convert existing pipelines for hydrogen transport to support new energy and energy transition investments for the future.

Kimberlite will continue to track the future expenditure plans and technology trends among the pipeline operators worldwide and report updates. Feel free to reach out to discuss.