Coatings World - November 2012

Protective Coatings for Oil and Gas Pipelines in
Russia Thriving

There is a protective coatings segment –

coatings for oil and gas pipeline in Russia and the rest of the Soviet Union that is buoyant.

by Sean Milmo
European Correspondent
milmocw@rodpub.com

Demand for protective coatings in the Eu- ropean Union has been weakened by the downturn in EU manufacturing due to the euro crisis. But there is a protective coatings segment—coatings for oil and gas pipeline— further east in Russia and the rest of the former Soviet Union (SFU) that is buoyant at the moment. The need for piped natural gas from Russia, which account for a large share of gas consumption in the EU has been declining in Western Europe due to its economic difficulties. But new steel pipelines are still being built across Russia into the EU in anticipation of a owing long-term requirement for gas.

The two strings of the Nord Stream pipeline with a capacity to transport 55 billion cubic meters of Russian via the Baltic Sea has just been inaugurated. But already the consortium behind the project is negotiating the construction of a third and fourth string, one of which will be used to transport gas direct to the UK. Furthermore, China is seeking gas supplies from Russia and from the Central Asian Republic like Kazakhstan and Uzbekistan. This will necessitate the construction of more gas pipelines.

“Another attraction of the Russia market is that it needs to renew parts of its vast pipeline net-

work, some of which are over 40 years old,” ex-
plained Henry Tausch, senior vice president for
Europe at U.S.-based Bredero Shaw, the world’s
leading pipeline coater, which formulates its own
coatings. Also, sometime probably in the next 3 -
10 years Russia will need pipelines to transport
oil and gas from reservoirs in the Artic.”
Russia alone is estimated to account for
more than 20% of 400,000 tons of global de-
mand for pipeline coatings materials. Gas out-
put from Russia and the remainder of the FSU
amounts to 40% of the world’s total.

“Average growth in demand for oil and gas pipeline coatings is approximately 5-7% at the moment with the driving force coming from pipeline projects,” said Noru Tsalic, a consultant at Applied Market Information (AMI), a market research company in Bristol, England.

Some observers believe that the growth rate is even higher because of the amounts of coatings required for the maintenance and upgrading of Russia’s extensive network of gas and oil steel pipelines.

Gazprom, the country’s major gas producer, has a network of approximately 170,000 kilometers of gas transmission systems and Transneft, which is responsible for oil distribution, has approximately 50,000 km of pipelines. The Russian government wants a more efficient gas transport system to reduce costs by increasing gas flows.