The latest EIC Monitor tracking new active and future projects across the global energy industry shows positive signs of growth across all sectors this quarter (Q1:January – March 2011), with the total number of new project announcements up 29% on the previous quarter.
The oil & gas sectors are continuing their recovery with further increases in projected investment potential and the renewables industry continues to perform well with a significant increase in the number of new projects as well as investment value.
It is encouraging to see that the power sector is beginning to recover from last quarter’s results which saw the potential investment value of new power projects fall by 53%. This had a major knock on effect on the total value of project announcements for the energy industry as a whole which were down by nearly 8% in Q4 2010.
The total number of new projects has increased from 421 in Q4 2010 to 541 this quarter, with a corresponding increase in potential investment value from US$277 billion to US$373 billion. Project numbers are also much higher than for the same quarter in 2010, while the total potential investment value is down from Q1 2010 (US$532 billion).
Upstream, midstream and downstream sectors
The upstream sector has seen a slight increase in the number of new projects, up from 74 in Q4 2010 to 79 in Q1 2011 with a healthy 26% increase in potential investment value over the same period. South East Asia has around one third of the new projects with 27 schemes representing a total potential investment value of US$5.3 billion. Russia however has the largest investment potential with over US$21 billion of projects including the Messoyakha Oil & Gas Field project valued at US$18 billion.
The midstream sector has seen a 22% increase in the number of projects, up from 54 to 66, together with a strong 63% increase in project value since Q4 2010, up from US$22 billion to US$35.7 billion. North America accounts for around a third of new projects although they only represent US$4.6 billion (13%) of the total sector potential investment value. The largest new projects are the Gorgon LNG Train 4 (US$9 billion) in Australia and the West Ethylene Pipeline WEP (US$7.2 billion) in Iran.
In the downstream sector, the number of new projects in Q1 2011 has increased by 19% since Q4 2010 although with only a 4.3% rise in the total potential investment value to US$55.2 billion, it is still very much down on the US$71.6 billion of Q1 2010. South East Asia announced 17 projects with a combined potential investment value of US$18.4 billion. The BRIC countries account for 24 projects with a value of US$9.1 billion. European projects only amount to 1.6% (US$865 million) of the total potential investment this quarter.
Global power projects
In the renewable sector the number of new projects has increased significantly from 135 in Q4 2010 to 225 in Q1 2011. The potential investment value of new projects has increased accordingly, up by 56% from US$97.5 billion to US$152 billion although this increase is attributed to the enormous 39,000MW Grand Inga Hydropower project in the Democratic Republic of Congo, valued at US$80 billion. This quarter we have seen the UK continue to develop its renewable portfolio with 74 projects announced including 56 onshore wind farms.
In the power sector, the number of new projects announced (96%) has remained static however the potential total investment value for the sector is up by 22% from US$62.8 billion in Q4 2010 to US$76.6 billion in Q1 2011. The US and India account for 22 projects valued at US$26.8 billion. India has eight new coal fired power projects and a number of T&D / interconnector projects. There is an even spread of new projects across most other regions.
This quarter’s results are good news for the energy industry overall. Yet again we are seeing positive signs across the board with these figures building on the previous quarter’s figures to provide a solid foundation for a sustainable recovery.
Author: Mike Major, CEO, The EIC
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