specialty pipelines for renewable and alternative energy substances

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Get more info on this report! Specialty Pipelines for Renewable and Alternative Energy Substances December 1, 2010 The world is rushing to harness alternative and renewable energy sources, and global specialty pipeline infrastructure is jumping to keep up. SBI Energy estimates that the total global market for specialty pipelines will show year over year increases of 30% or more through 2015. This will result in a total global market of over $3 billion by 2015. Because their chemical composition and transmission requirements composition are different from conventional fossil fuels, renewable fuels can be corrosive or destructive to existing/conventional pipelines, fittings, seals, and other conventional pipeline-related infrastructure. Transport of renewable fuels such as biodiesel, ethanol, and biomethane along existing fossil fuel pipelines (diesel, jet fuel, gasoline, natural gas) is frequently impracticable due to concerns of contamination between renewable and petroleum fuel batches. Additionally, the distributed nature of production operations for many renewable fuels, and for biomethane in particular, promise to support the construction of substantial new pipeline infrastructure. Similarly, enhanced oil recovery, carbon capture sequestration, and other emerging energy economies require pipeline transport of carbon dioxide, commonly under very high pressure. Like ethanol, carbon dioxide can be highly corrosive to conventional pipelines, resulting in increased leakage rates, high repair costs, and general pipeline deterioration. The need to upgrade existing pipelines or construct new specialty pipelines for these substances has led to the emergence of product markets for components and materials related to specialty pipelines. Substances carried in specialty pipelines - carbon dioxide, ethanol, biodiesel, and biomethane/biogas - have found market growth due to high petroleum prices, the development of enhanced oil recovery methods using carbon dioxide injection, carbon capture and sequestration system development, the presence or potential for carbon emissions penalties in several world markets, industry and public interest in biofuels, and renewable fuels standards mandating increasing production and blending with petroleum fuels. These factors are driving a general shift in the energy economies of several world markets, towards technologies and fuels that mitigate greenhouse gas emissions and ensure greater energy security for countries with declining fossil fuel resources. As these new energy economies gain traction, economies of scale continue to develop in support of renewable and other alternative energy products. Particularly in areas where alternative energy production or consumption is highly concentrated (for example, carbon dioxide enhanced oil recovery fields in Texas’s Permian Basin), pipelines are emerging as an efficient means of transport to reduce costs associated with truck, barge, or rail transportation. In anticipation of increased demand for pipeline transport of alternative fuels and carbon dioxide, pipeline producers and operators have already investigated or established construction and operations procedures for the transmission of carbon dioxide, ethanol, biodiesel, and biomethane.

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Page 1: Specialty Pipelines for Renewable and Alternative Energy Substances

Get more info on this report! Specialty Pipelines for Renewable and Alternative Energy Substances

December 1, 2010

The world is rushing to harness alternative and renewable energy sources, and global specialty pipeline infrastructure is jumping to keep up. SBI Energy estimates that the total global market for specialty pipelines will show year over year increases of 30% or more through 2015. This will result in a total global market of over $3 billion by 2015. Because their chemical composition and transmission requirements composition are different from conventional fossil fuels, renewable fuels can be corrosive or destructive to existing/conventional pipelines, fittings, seals, and other conventional pipeline-related infrastructure. Transport of renewable fuels such as biodiesel, ethanol, and biomethane along existing fossil fuel pipelines (diesel, jet fuel, gasoline, natural gas) is frequently impracticable due to concerns of contamination between renewable and petroleum fuel batches. Additionally, the distributed nature of production operations for many renewable fuels, and for biomethane in particular, promise to support the construction of substantial new pipeline infrastructure.

Similarly, enhanced oil recovery, carbon capture sequestration, and other emerging energy economies require pipeline transport of carbon dioxide, commonly under very high pressure. Like ethanol, carbon dioxide can be highly corrosive to conventional pipelines, resulting in increased leakage rates, high repair costs, and general pipeline deterioration. The need to upgrade existing pipelines or construct new specialty pipelines for these substances has led to the emergence of product markets for components and materials related to specialty pipelines.

Substances carried in specialty pipelines - carbon dioxide, ethanol, biodiesel, and biomethane/biogas - have found market growth due to high petroleum prices, the development of enhanced oil recovery methods using carbon dioxide injection, carbon capture and sequestration system development, the presence or potential for carbon emissions penalties in several world markets, industry and public interest in biofuels, and renewable fuels standards mandating increasing production and blending with petroleum fuels. These factors are driving a general shift in the energy economies of several world markets, towards technologies and fuels that mitigate greenhouse gas emissions and ensure greater energy security for countries with declining fossil fuel resources.

As these new energy economies gain traction, economies of scale continue to develop in support of renewable and other alternative energy products. Particularly in areas where alternative energy production or consumption is highly concentrated (for example, carbon dioxide enhanced oil recovery fields in Texas’s Permian Basin), pipelines are emerging as an efficient means of transport to reduce costs associated with truck, barge, or rail transportation. In anticipation of increased demand for pipeline transport of alternative fuels and carbon dioxide, pipeline producers and operators have already investigated or established construction and operations procedures for the transmission of carbon dioxide, ethanol, biodiesel, and biomethane.

Page 2: Specialty Pipelines for Renewable and Alternative Energy Substances

The design of specialty pipelines is, for the most part, based on existing technologies and materials used in existing pipeline transmission operations, as well as the oil & gas, renewable fuels, and chemicals industries. Components of specialty pipelines not found as extensively in existing pipelines for natural gas, petroleum, and petroleum products include protective coatings, large-diameter resin and plastic pipes, specialty industrial pumps and compressors for corrosive substances such as ethanol and carbon dioxide, specialty valves, and technologies able to detect pipeline leaks. Due to the increased risk of corrosion or stress-related cracking of specialty pipelines that carry ethanol or carbon dioxide, specialty pipelines also represent a notable market for state-of-the-art technologies used for existing petroleum pipelines to detect leaks, minimize corrosive wear, pitting, lamination loss, or metal loss. The further development of commercial pipelines for next-generation energy sector substances will depend on ongoing product specialization and operational experience with specialty pipeline components.

Specialty Pipelines, Components, Materials and Global Markets contains comprehensive data on the worldwide market for specialty pipelines, their components, materials, and supporting technologies, including historic (2006-2010) and forecast (2011-2015) market size data in terms of the dollar value of product shipments. The report identifies key trends affecting the marketplace, along with trends driving growth, and central challenges to further market development. The report also profiles leading manufacturers and suppliers of specialty pipelines and that are most relevant to the specialty pipelines industry.

Report Methodology

The information in Specialty Pipelines, Components, Materials and Global Markets is based on data and information gleaned from interviews of government officials, industry insiders and professionals, as well as data available from the U.S. Department of Commerce, other U.S. executive agencies, the U.S. Census Bureau, U.S. national laboratories, U.S. and global energy research institutions, the European Commission, along with information from trade associations, business journals, company literature and websites, Securities and Exchange Commission reportings, and research services such as Simmons Market Research Bureau.

What You’ll Get in This Report

Specialty Pipelines, Components, Materials and Global Markets makes important predictions and recommendations regarding the near term future of this market. It pinpoints methods that current and prospective industry players can capitalize on existing trends, spearhead new trends, and identify and expand into niche and specialty markets. No other market research report provides both comprehensive analysis and extensive, quality data that Specialty Pipelines, Components, Materials and Global Markets offers. Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.

How You’ll Benefit from This Report

If your company is already doing business in the specialty pipelines market, in associated manufacturing industries, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. Pipeline operators, companies vested in the midstream industry, biofuels producers/refiners/suppliers, producers and marketers will also benefit from key insights into the supply chain, projects worldwide, and industry suppliers associated with specialty pipelines. The report provides an extensive review of markets for specialty pipelines, including their components, from 2006 as well as projects and trends through 2015.

This report will also help:

Marketing managers identify market opportunities and develop targeted promotion plans for

Page 3: Specialty Pipelines for Renewable and Alternative Energy Substances

specialty pipelines, components, materials, and services.

Research and development professionals stay on top of competitor initiatives and explore demand for specialty pipelines, specialty pipeline components, materials, and associated transmission services.

Advertising agencies working with clients in the midstream, utility, oil & gas, industrial equipment manufacturing, and chemicals industries to understand the market for specialty pipeline components and materials, their application, and the product procurement and project construction process; to develop messages and images that compel consumers to invest in companies supplying or operating specialty pipelines

Business development executives understand the dynamics of the market and identify possible partnerships.

Information and research center librarians provide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.

Additional Information

Market Insights: A Selection From The Report

Ethanol

Brazil and the United States represent the two largest national producers of ethanol and the largest global consumption markets. Both countries have fostered major ethanol industries due to the abundance of agricultural ethanol crops (sugarcane and corn) and national regulation establishing significant markets for ethanol through transportation fuel blending. The market history of ethanol pipeline transportation is largely limited to Brazil where the Programa Nacional do Álcool (Proalcool) initiated by the Brazilian government in the 1970s provided support and amenable market conditions for the construction of dedicated ethanol pipelines. In the United States, the development of markets for ethanol pipeline transportation has been very recent.

Specialty Pipeline Projects

While multiple industry and market factors direct the development of the specialty renewable and alternative energy pipeline markets, the market volumes are ultimately determined by specialty pipeline construction and modification projects realized within the scope of this report (2006-2015). The following summaries for specialty pipeline projects worldwide provide greater detail regarding announced projects referenced elsewhere in this chapter and establish short-term market parameters and infrastructure development trends relevant to the projection of additional specialty pipeline projects through 2015. Projects are discussed below in terms of their preliminary siting, transportation capacity, development and construction schedule, associated investors and end users, obstacles to their completion, and role in regional renewable and alternative energy substance markets.

Eastern Shelf Pipeline

Kinder Morgan Energy Partners, L.P. purchased several units in the Katz oilfield within the Permian basin in 2006 and plans to begin CO2 injection to increase petroleum production by January 2011. With CO2-producing reservoirs and over 1,000 miles of CO2 transportation...

Page 4: Specialty Pipelines for Renewable and Alternative Energy Substances

Project Development and Financing Trends

Pipeline projects require significant financing due to their high capital costs that include equipment procurement, engineering, construction, right-of-way (ROW) land purchases. Midstream companies fund pipeline infrastructure projects through internal capital, project equity shares, and debt financing. Government support and incentives are likely to play a major role in the development of specialty pipeline projects, as there are significantly higher technical and market risks associated with infrastructure projects for renewable fuel and alternative energy substance transportation. While overall financing conditions for the midstream industry are relevant to specialty pipeline project development, specialty pipeline projects remain subject to unique considerations including their risks and market feasibility.

Large energy companies such as investor-owned public utilities or comprehensive oil companies involved in the E&P, refining, transportation, and distribution of petroleum and natural gas benefit from large cash flows that can be reinvested or used to fund the completion of large infrastructure projects. With multination...

Table of Contents

Chapter 1: Executive Summary Scope Renewable and Alternative Energy Substances and the Role of Specialty Pipelines Specialty Pipelines Requirements and Components Environmental Impact of New Specialty Pipelines Market Assessment Methodology Market Origins and History Trends in Renewable and Alternative Energy Substances Production Specialty Pipeline Project Viability and Operational Profitability Specialty Pipeline Markets Carbon Dioxide Transportation Pipelines Market Figure 1-1: CO2 Transportation Pipelines Market Size, 2006-2015 (in million $) Ethanol Transportation Pipelines Market Figure 1-2: Ethanol Transportation Pipelines Market Size, 2006-2015 (in million $) Biodiesel Transportation Pipelines Market Figure 1-3: Biodiesel Specialty Pipelines Market Size, 2006-2015 (in million $) Biogas and Biomethane Transportation Pipelines Market Figure 1-4: Biogas and Biomethane Transportation Pipelines Market Size, 2006-2015 (in million $) Product Trends and Pricing Figure 1-5: U.S. Plastic and Steel Pipes Price Changes, 2001-2010 Figure 1-6: U.S. Special Purpose Coatings Price Changes, 2001-2010 Figure 1-7 U.S. Industrial Pump and Air/Gas Compressors Price Changes, 2001-2010 Figure 1-8: U.S. Industrial Valve Price Changes, 2001-2010 Industry Trends Growing Regional Demand for Renewable and Alternative Energy Substances Specialty Pipeline Components Supply Chain Figure 1-9: Specialty Pipeline Components Supply Chain Specialty Pipeline End Users Summary Figure 1-10: Specialty Pipelines Market Size, 2006-2015 (in million $)

Chapter 2: Specialty Renewable and Alternative Energy Pipelines Scope

Page 5: Specialty Pipelines for Renewable and Alternative Energy Substances

Pipeline Technology and Operation Role of Specialty Pipelines Greater Market Availability and Consumption of Renewable and Alternative Energy Substances Higher Efficiency Transportation of Renewable and Alternative Energy Substances Renewable and Alternative Energy Substances Carbon Dioxide Ethanol Biogas/Biomethane Biodiesel Specialty Pipelines: Requirements, Systems and Methods Resource Requirements Components Operational Requirements Demand for Specialty Renewable and Alternative Energy Pipelines Environmental Impact of New Specialty Pipelines Development of Pipeline Tract Areas Environmental Contamination through Pipeline Leaks Pipeline Explosion Risks Emissions Summary

Chapter 3: Specialty Renewable and Alternative Energy Pipelines - Market Size and Growth Scope Market Assessment Methodology Project-Based Analysis Analytical Factors for Market Size and Growth Market Origins and History Carbon Dioxide Enhanced Oil Recovery Carbon Capture and Sequestration Ethanol Biodiesel Biogas / Biomethane Specialty Pipeline Projects Eastern Shelf Pipeline Table 3-1: Eastern Shelf Pipeline Green Pipeline Table 3-2: Green Pipeline Snøhvit Pipeline Table 3-3: Snøhvit Pipeline Central Florida Pipeline Table 3-4: Central Florida Pipeline PMCC Pipeline Table 3-5: PMCC Pipeline Plantation Pipeline Table 3-6: Plantation Pipeline Huckabay Ridge Biogas Project Table 3-7: Huckabay Ridge Biogas Project Brålanda Biogas Project Table 3-8: Brålanda Biogas Project Factors Affecting Market Size and Growth Greater Production of Renewable and Alternative Energy Substances Spatial Distribution of Renewable and Alternative Energy Substance Production and Consumption Specialty Pipeline Project Viability and Operational Profitability Specialty Pipeline Markets Market for Carbon Dioxide Transportation Pipelines

Page 6: Specialty Pipelines for Renewable and Alternative Energy Substances

Figure 3-1: CO2 Transportation Pipelines Market Size, 2006-2015 (in million $) Table 3-9: World Market Shares for CO2 Transportation Pipelines (United States, European Union, Asia) Market for Ethanol Transportation Pipelines Figure 3-2: Ethanol Transportation Pipelines Market Size, 2006-2015 (in million $) Table 3-10: World Market Shares for Ethanol Transportation Pipelines (United States, Brazil) Market for Biodiesel Transportation Pipelines Figure 3-3: Biodiesel Transportation Pipelines Market Size, 2006-2015 (in million $) Table 3-11: World Market Shares for Biodiesel Transportation Pipelines (United States, European Union) Market for Biogas and Biomethane Transportation Pipelines Figure 3-4: Biogas and Biomethane Transportation Pipelines Market Size, 2006-2015 (in million $) Table 3-12: World Market Shares for Biogas and Biomethane Transportation Pipelines (United States, European Union, Asia) Market for Specialty Pipeline Lengths Figure 3-5: Pipeline Lengths Market Size, Steel, 2006-2015 (in million $) Table 3-13: World Market Shares for Steel Pipeline Lengths (United States, European Union, Brazil, Asia) Figure 3-6: Specialty Pipeline Lengths (Polymers), Market Size, 2006-2015 (in million $) Table 3-14: World Market Shares for Polymer Pipeline Lengths (United States, European Union, Brazil, Asia) Market for Specialty Pipeline Pumps and Compressors Figure 3-7: Specialty Pipeline Pumps Market Size, 2006-2015 (in million $) Table 3-15: World Market Shares for Specialty Pipeline Pumps (United States, European Union, Brazil, Asia) Figure 3-8: Specialty Pipeline Compressors Market Size, 2006-2015 (in million $) Table 3-16: World Market Shares for Specialty Pipeline Compressors (United States, European Union, Brazil, Asia) Market for Specialty Pipeline Flow Control, Leak Detection, and Management Systems and Technologies Figure 3-9: Specialty Pipeline Flow Control Equipment Market Size, 2006-2015 (in million $) Table 3-17: World Market Shares for Flow Control Equipment (United States, European Union, Brazil, Asia) Figure 3-10: Inline Pipeline Management and Leak Detection Systems Market Size, 2006-2015 (in million $) Table 3-18: World Market Shares for Inline Pipeline Management and Leak Detection Systems (United States, European Union, Brazil, Asia) Summary Figure 3-11: Specialty Pipelines Market Size, 2006-2015 (in million $)

Chapter 4: Specialty Renewable and Alternative Energy Pipelines - Market and Product Trends Scope Product Trends and Pricing Specialty Pipeline Materials Figure 4-1: U.S. Plastic and Steel Pipes Price Changes, 2001-2010 Specialty Pipeline Coatings Figure 4-2: U.S. Special Purpose Coatings Price Changes, 2001-2010 Specialty Pipeline Compressors and Pumps Figure 4-3: U.S. Industrial Pump and Air/Gas Compressors Price Changes, 2001-2010 Flow Control, Pipeline Management, and Leak Detection Systems Figure 4-4: U.S. Industrial Valve Price Changes, 2001-2010 Figure 4-5: U.S. Industrial Process Instruments Price Changes, 2001-2010 Industry Trends Midstream Industry Growth and Consolidation, 2001-2008 Financial Crisis and Global Economic Turndown, 2008-2009

Page 7: Specialty Pipelines for Renewable and Alternative Energy Substances

Developments Leading towards Specialty Renewable and Alternative Energy Substance Pipelines Project Development and Financing Trends Cost and Pricing Trends for Renewable and Alternative Energy Substances Carbon Dioxide Figure 4-6: West Texas Intermediate Average Monthly Spot Prices for Crude Petroleum, January 2001-August 2010 Ethanol Figure 4-7: Ethanol Fuel and Gasoline Prices, U.S. Midwest and East Coast Figure 4-8: Ethanol Fuel Prices in Nebraska (United States) and São Paulo State (Brazil), 2001-2010 Figure 4-9: U.S. Rail Transportation Price Changes, 2001-2010 Biodiesel Figure 4-10: Average U.S. B20 (20% Biodiesel / 80% Petroleum Diesel) and Petroleum Diesel Prices, 2001-2010 Figure 4-11: Average German Biodiesel (100%; B100) and Petroleum Diesel Prices (in Euros). 2005-2009 Biomethane Figure 4-12: Average U.S. Residential, Commercial, Industrial, Power, and Vehicle Consumer Natural Gas Prices, 2001-2010 Figure 4-13: Average EU Residential, Commercial, Industrial, Power, and Vehicle Consumer Natural Gas Prices, 2001-2010 Growing Regional Demand for Renewable and Alternative Energy Substances Carbon Dioxide - United States Figure 4-14: U.S. Carbon Dioxide Pipeline Deliveries for Enhanced Oil Recovery (EOR), 2001-2010 Figure 4-15: Operationally-Active U.S. Carbon Capture and Sequestration (CCS) Projects, 2001-2010 Carbon Dioxide - European Union Figure 4-16: Operationally-Active EU Carbon Capture and Sequestration (CCS) Projects, 2001-2010 Carbon Dioxide - Brazil Carbon Dioxide - Asia Figure 4-17: Operationally-Active Carbon Capture and Sequestration (CCS) Projects in Asia, 2001-2010 Ethanol - United States Table 4-1: EISA Renewable Fuel Volume Requirements, 2010 (billion gallons) Figure 4-18: U.S. Ethanol Fuel Consumption, 2001-2010 Ethanol - Brazil Figure 4-19: Brazilian Ethanol Fuel Consumption, 2001-2010 Biodiesel - United States Figure 4-20: U.S. Biodiesel Consumption, 2001-2010 Biodiesel - European Union Figure 4-21: EU Biodiesel Consumption, 2001-2010 Biomethane - United States Figure 4-22: Operationally-Active U.S. Biogas / Biomethane Production Projects, 2001-2010 Figure 4-23: New U.S. Biogas/Biomethane Production Projects and U.S. Wellhead Natural Gas Prices, 2001-2010 Figure 4-24: New U.S. Biogas / Biomethane Production Projects with Pipeline Injection and U.S. Wellhead Natural Gas Prices, 2001-2010 Biomethane - European Union Figure 4-25: EU Biogas Production, 2001-2010 Figure 4-26: EU Biogas / Biomethane Production Projects with Pipeline Injection and Average EU Residential/Commercial Consumer Natural Gas Prices, 2001-2010 Summary

Page 8: Specialty Pipelines for Renewable and Alternative Energy Substances

Chapter 5: Specialty Pipelines and Components: Distribution and Promotion Scope Specialty Pipeline Components Supply Chain Figure 5-1: Specialty Pipeline Components Supply Chain Renewable and Alternative Energy Substance Supply Chain Figure 5-2: Ethanol Fuel Supply Chain Figure 5-3: Biodiesel Fuel Supply Chain Figure 5-4: Biogas/Biomethane Supply Chain Figure 5-5: Carbon Dioxide Supply Chain Specialty Pipelines Project Promotion Summary

Chapter 6: Competitive Profiles Scope Methodology and Selection of Profiles

3M Corporate Background Product Portfolio Performance Figure 6-1: Annual Revenues of 3M, 2006-2010 (in billion $) Company News Acquisitions and Divestitures Outlook Personnel Changes

Ameron Corporate Background Product Portfolio Performance Figure 6-2: Annual Revenues of Ameron, 2006-2010 (in million $) Company News Acquisitions and Divestitures Outlook Personnel Changes

Ashland Corporate Background Product Portfolio Performance Figure 6-3: Annual Revenues of Ashland, 2006-2010 (in billion $) Company News Acquisitions and Divestitures Outlook Personnel Changes

Boreal Laser Corporate Background Product Portfolio Performance

Flowserve Corporate Background Product Portfolio Performance Figure 6-4: Annual Revenues of Flowserve, 2006-2010 (in billion $) Company News Acquisitions and Divestitures Outlook Personnel Changes

GE Oil & Gas

Page 9: Specialty Pipelines for Renewable and Alternative Energy Substances

Corporate Background Product Portfolio Performance Figure 6-5: Annual Revenues of General Electric Oil & Gas, 2006-2010 (in billion $) Company News Acquisitions and Divestitures Innovation Outlook

International Protective Coatings Corporate Background Product Portfolio Performance Figure 6-6: Annual Revenues of Akzo Nobel Performance Coatings, 2006-2010e (in billion €) Company News Acquisitions and Divestitures Innovation Outlook Personnel Changes

Siemens Corporate Background Product Portfolio Performance Figure 6-7: Annual Revenues of Siemens, 2006-2010 (in billion €) Company News Acquisitions and Divestitures Innovation Outlook

Sulzer Pumps Corporate Background Product Portfolio Performance Figure 6-8: Annual Revenues of Sulzer Pumps, 2006-2010e (in billion CHF) Company News Outlook Personnel Changes

Tyco Flow Control Corporate Background Product Portfolio Performance Figure 6-9: Annual Revenues of Tyco Flow Control, 2006-2010e (in billion $) Company News Acquisitions and Divestitures Outlook Personnel Changes Pipeline Operator Profiles

Kinder Morgan Corporate Background Business Activities Performance Figure 6-10: Annual Revenues of Kinder Morgan, 2006-2010e (in billion $) Company News Acquisitions and Divestitures Specialty Renewable and Alternative Energy Pipeline Projects

Petrobras Corporate Background Business Activities

Page 10: Specialty Pipelines for Renewable and Alternative Energy Substances

Performance Figure 6-11: Annual Revenues of Petrobras, 2005-2009 (in billion $) Company News Acquisitions and Divestitures Specialty Renewable and Alternative Energy Pipeline Projects

Uniduto Logística Corporate Background Business Activities Company News Specialty Renewable and Alternative Energy Pipeline Projects

Chapter 7: End Users Scope Specialty Pipeline End Users Carbon Dioxide Ethanol Biodiesel Biogas/Biomethane Summary

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