Midstream Oil & Gas Equipment

INDUSTRY MARKET RESEARCH FOR BUSINESS LEADERS, STRATEGISTS, DECISION MAKERS Midstream Oil & Gas Equipment

US Industry Study with Forecasts for 2019 & 2024

Study #3376 | February 2016 | $5400

Demand for equipment used in midstream oil and gas treating and processing equipment and compressors used applications in the US is expected to decline through 2019 in pipeline and other applications -- will continue to be as a low oil and gas price environment limits production strong by historical standards, although it is not expected growth and US midstream infrastructure becomes better to return to 2014 levels in the near future. The rapid adapted to the recent shifts in energy production within growth of gas production in the Marcellus and Utica shale the country. Spending on equipment for use in crude by plays of the Appalachian Basin has necessitated a high rail and gas processing plants will both fall from elevated level of gas processing and transportation infrastructure 2014 levels, but pipeline construction and liquefied natural investment to accommodate changing regional gas gas (LNG) activity will continue to support a high level of transportation needs; by 2019 the need for ongoing equipment demand through the forecast period. construction will begin to ebb.

Eventual upstream recovery to Major LNG export facilities expected boost midstream infrastructure Although the prospects for LNG export facilities are Although the market for midstream equipment is expect- clouded by short term price uncertainty, market funda- ed to return to healthy levels of demand in 2019, signifi- mentals will drive the eventual construction of a number cant declines are expected in 2016, driven by a dramatic of facilities in coming years -- several of which are likely to fall in well completions in 2015 and 2016. A recovery in remain under construction in 2019. These facilities, which drilling and completion activity is expected by 2019, with will be major investments, will boost the overall market for the upstream sector benefiting from an eventual oil price a range of equipment, including compressors, valves, and recovery along with additional export opportunities, which pumps. Additionally, several new projects will require had not been previously available, for both crude oil and construction of LNG storage tanks, which can make up a LNG. As growth returns to the upstream sector over the large component of the total project cost due to their size next few years, demand will again accelerate for mid- and heavy engineering requirements. stream infrastructure projects, in turn boosting demand for equipment. Study coverage This study analyzes US demand for equipment utilized in Pipe segment to recover by 2019 midstream oil and gas infrastructure. It presents historical Pipe will remain the largest product category in midstream data (2004, 2009, and 2014) and forecasts (2019 and 2024) oil and gas equipment, with demand expected to fully by product, application, market, and US region. The study recover and post modest gains by 2019 despite a sharp also considers market environment factors, evaluates decline in 2015 and 2016. Demand for equipment associ- company market share, and profiles 37 industry players. ated with natural gas infrastructure -- including gas Copyright 2016 The Freedonia Group Study #3376 Midstream Oil & Gas Equipment February 2016 US Industry Study with Forecasts for 2019 & 2024 $5400

Contents Summary Eastern Region 12 Reciprocating & Other Compressor Demand in Midstream Oil & Gas Production Oil & Gas Applications Well Completions 13 Valve Demand in Midstream Midstream Oil & Gas Equipment Demand Executive Summary Oil & Gas Applications Pennsylvania 14 Automatic Valve Demand in Midstream West Virginia Oil & Gas Applications Market Environment Other Eastern States 15 Conventional Valve Demand in Products Western Region Midstream Oil & Gas Applications 16 Pump Demand in Midstream Pipe Oil & Gas Production Oil & Gas Applications Steel Well Completions 17 Centrifugal Pump Demand in Plastic Midstream Oil & Gas Equipment Demand Midstream Oil & Gas Applications Rail Tank Cars Wyoming 18 Positive Displacement Pump Demand Gas Treating & Processing Equipment Colorado in Midstream Oil & Gas Applications Compressors Utah 19 Parts, Accessories, & Other Pump Centrifugal Compressors California Demand in Midstream Reciprocating & Other Compressors Other Western States Oil & Gas Applications Valves 20 Storage Tank Demand in Midstream Automatic Industry Structure Oil & Gas Applications Conventional Midstream Oil & Gas Industry 21 Instrumentation Equipment Demand Pumps Equipment Suppliers in Midstream Oil & Gas Applications Centrifugal Pumps Market Share 22 Other Equipment Demand in Positive Displacement Pumps Mergers & Acquisitions Midstream Oil & Gas Applications Parts, Accessories, & Other Pumps Product Development & Manufacturing Storage Tanks Cooperative Agreements Applications Instrumentation Equipment Supply Agreements Other Equipment 1 Midstream Oil & Gas Equipment Competitive Strategies Demand by Application Applications Company Profiles 2 Midstream Crude Oil & Natural Gas Pipeline Equipment Demand Pipelines 3 Natural Gas Processing Plant Gas Processing Plants Equipment Demand Liquefied Natural Gas Facilities Tables summary 4 Liquefied Natural Gas Facility Crude by Rail/Other Midstream Applications Equipment Demand Markets Executive Summary 5 Crude by Rail & Other Midstream 1 Summary Table Equipment Demand Demand by Resource Crude Oil Products Markets Natural Gas 1 Midstream Oil & Gas Equipment 1 Midstream Oil & Gas Equipment Demand by Region Demand by Product Demand by Resource Oil & Gas Producing Regions 2 Pipe Demand in Midstream 2 Midstream Crude Oil Southern Region Oil & Gas Applications Equipment Demand 3 Steel Pipe Demand in Midstream 3 Midstream Natural Gas Oil & Gas Production Oil & Gas Applications Equipment Demand Well Completions 4 Welded Steel Pipe Demand in 4 Midstream Oil & Gas Equipment Midstream Oil & Gas Equipment Demand Midstream Oil & Gas Applications Demand by Region Texas 5 Seamless Steel Pipe Demand in Louisiana Midstream Oil & Gas Applications Tables within each region present Mississippi 6 Pipe Fittings Demand in Midstream historical demand data (2004, 2009, New Mexico Oil & Gas Applications Other Southern States 2014) plus forecasts (2019, 2024) for: 7 Plastic & Other Pipe Demand in Oil/Gas Production & Producing Wells Midwestern Region Midstream Oil & Gas Applications Well Completions 8 Rail Tank Car Demand in Midstream Midstream Oil/Gas Equipment Demand Oil & Gas Production Oil & Gas Applications Well Completions 9 Gas Treating & Processing Equipment Midstream Oil & Gas Equipment Demand Demand in Midstream Industry Structure North Dakota Oil & Gas Applications 1 US Midstream Oil & Gas Equipment Oklahoma 10 Compressor Demand in Midstream Sales by Company, 2014 Kansas Oil & Gas Applications 2 Selected Acquisitions & Divestitures Ohio 11 Centrifugal Compressor Demand in 3 Selected Cooperative Agreements Other Midwestern States Midstream Oil & Gas Applications 4 Selected Suppliers by Project Study #3376 Midstream Oil & Gas Equipment February 2016 US Industry Study with Forecasts for 2019 & 2024 $5400

TABLE VII-1 midwestern region MIDWESTERN REGION: OIL & GAS PRODUCTION & PRODUCING WELLS Oklahoma Demand for midstream oil and gas infrastructure equipment in Oklahoma is expected to fall to $630 million in 2019. Lower investmentItem 2004 2009 2014 2019 2024 in gas processing plants and crude oil transmission pipelines will lead to declines, as both saw a high level of equipment demand in 2014 thatOil & Gas Production (quadrillion Btu) 3.4 3.9 6.8 7.7 9.2 will not remain necessary in 2019. However, growth is expected in other Crude Oil 0.9 1.3 3.6 4.2 5.2 segments of the market, such as gathering lines to collect oil and gas Natural Gas 2.5 2.6 3.2 3.5 4.0 produced from unconventional sampleplays in the Anadarko Basin. text Producing Wells (000) 312.9 350.0 375.1 382.2 401.5 Oklahoma is a significant oil and gas producing state, with much By Resource: recent interest in unconventional oil and gas in several distinct plays. Crude Oil 201.7 224.1 248.6 252.0 265.6 The primary production areas in Oklahoma are the Anadarko Basin, the Natural Gas 111.2 125.9 126.5 130.2 135.9 Ardmore Basin, the Arkoma Basin, and the Cherokee Platform (which By State: sample includes part of Kansas). The Woodford shale, much of which overlaps North Dakota 3.2 4.4 table12.1 14.0 18.0 the Anadarko and Ardmore Basins, has become the site of considerable Oklahoma 119.3 127.6 130.5 135.1 140.1 natural gas drilling activity in recent years. The SCOOP and STACK Kansas 62.5 69.4 78.0 79.0 82.0 plays saw accelerating development in 2014 and into 2015, although low Ohio 63.9 68.8 70.0 68.3 74.0 oil prices prevented a higher level of drilling activity there. Other 64.0 79.8 84.5 85.8 87.4

Oklahoma has long been a crude oil pipeline and storage hub and Source: The Freedonia Group destination for transported crude oil from the Gulf Coast. Cushing, Okla- homa is the site of the largest crude oil storage tank farm in the US and is the delivery point for West Texas Intermediate crude oil futures contracts traded on the New York Mercantile Exchange. The development of TABLE VII-3 Canadian oil sands plus unconventional resources in the Midwestern US and Rocky Mountain region has created a need for southward transpor- MIDWESTERN REGION: tation capacity. This has substantially altered the state’s energy infra- MIDSTREAM OIL & GAS EQUIPMENT DEMAND structure. For example, the Seaway pipeline that runs between Cushing, (million dollars) Oklahoma and Houston, Texas was reversed in May 2012 and is now pumping from Cushing to Texas. Item 2004 2009 2014 2019 2024

Midstream Oil & Gas Equipment Demand 510 1610 4750 2520 2840 By Resource: Natural Gas 392 936 1240 1015 1330 Crude Oil 118 674 3510 1505 1510 This study can help you: By Product: Pipe 190 755 1100 980 1190 • Determine your market & sales potential Gas Processing Equipment 36 103 320 120 200 Compressors 95 130 230 200 245 • Learn more about industry competitors Valves 82 167 220 205 250 • Assess new products & technologies Pumps 50 174 360 210 235 Storage Tanks 7 sample121 200 105 110 • Identify firms to merge with or acquire Instrumentation Equipment 15 43 table79 50 70 Other 35 117 2241 650 540 • Complement your research & planning By State: North Dakota 17 115 2070 750 730 • Gather data for presentations Oklahoma 110 310 960 630 790 Ohio 47 83 380 160 220 • Confirm your own internal data Kansas 60 130 390 260 330 • Make better business decisions Other 276 972 950 720 770

Source: The Freedonia Group

For complete details on any study visit www.freedoniagroup.com Midstream Oil & Gas Equipment Study #3376 February 2016 US Industry Study with Forecasts for 2019 & 2024 $5400

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