By 2030 around 70 percent of the Europe's energy requirements is predicted to come from abundant reserves of gas in Russia, the Artic and the neighboring areas of southeast Asia and North Africa. Also to the European Union's 27 member states, gas has the added attraction of having lower CO2 emissions than other fossil fuels so it will help the EU fulfil its commitments to reduce greenhouse gases.
To supply this gas to the densely populated areas of Western Europe long-distance steel pipelines covered externally and internally with large quantities of anti-corrosion coatings are having to be built. In addition increasingly sophisticated coatings are required for piping for the production of gas, as well as oil, from deep reservoirs in the North Sea, Siberia and the Artic.
The first phase of a €7.4 billion ($10.4 billion), 1,224-kilometer gas pipeline, called Nord Stream, from Russia under the Baltic Sea to northwest Europe was completed earlier this year with the second and final phase due to be finished in late 2012.
In addition even longer gas pipelines are being planned to deliver gas from Russia and southeast Asia to parts of eastern and southern Europe.
Demand in Europe for pipeline coatings now accounts for 19 percent of the world's total of around $5 billion, second to Asia with a 23 percent share but higher than North America with 17 percent, according to a report on the global steel pipe coatings market by Applied Market Information (AMI), a market research company in Bristol, England.
Steel pipeline coatings are becoming one of the Europe's fastest growing major coatings sectors. Coatings make up around one to three percent of the total cost of a pipeline.
"Demand for pipeline coatings in Europe is not increasing as fast as that in Asia where it is at a double digit level, while in Europe it is around the middle single digit level," said Noru Tsalic, an AMI consultant. "But steel pipeline coatings demand in Europe is higher than the average for coatings as a whole in Europe and well above current GDP levels in most of the region. Furthermore this strong demand is likely to continue for some years because of the many more gas pipelines being planned."
The European market for steel pipeline coatings is supplied by two groups, integrated pipeline makers who have their own coatings operations and independents who specialize in coatings formulations and raw materials as well as services related to them.
However the independents with their expertise in coatings chemistry and in the on-site or field application of coatings are able to take advantage of the increasing need for more complex technologies.
With the Nord Stream project, two integrated pipe suppliers—Europipe of Germany and OMK of Russia—are providing the primary external and internal coatings. But the intricate task of applying concrete coatings to the pipes across the Baltic Sea to make them heavy enough to sink to the seabed is being done by the independent EUPEC Pipecoatings of France. It has organized the logistics of having the concrete coatings applied in specially constructed coatings plants in two Baltic Sea ports.
In the gas and oil exploration and production sector in the North Sea, Siberia and yet-to-be-exploited Artic, there are and will be much more opportunities for niche players able to provide coatings for specific functions in difficult environments.
In offshore, deep-sea oil exploration, for example, there is a need for an extensive bending of pipes. "Customers are requesting highly flexible coatings," said Sean Cornerford, technical services manager for pipe coatings at LyondellBasell, a leading polyolefins producer.
Also in deepwater operations more use is made of insulations materials in coatings to provide resistance against the effects of high pressure and high temperature environments (HPHT).
"The integrated pipe manufacturers have been increasing their volume sales faster but the revenues of the independents have been going up more quickly because they can provide added-value, higher-end products," said Tsalic. "They can respond to the technological requirements of harsher environmental conditions in deep waters where much of offshore oil and gas is now produced."
Socotherm of Italy, one of Europe's leading independent pipeline coatings producers and a specialist in deepwater insulation coatings, went into administration last year after being financially overstretched by the costs of international expansion. It is now majority owned by two equity funds.
Pipeline coatings companies can have problems gaining a worldwide presence because of the way that two basic technologies—fusion bonded epoxy (FBE) and layered polyolefins—dominate different regions. North America is the stronghold of FBE and Europe polyolefin systems.
"The reasons seem to be historical," said one coatings technical manager. "The way both regions have stuck to the same basic technology shows the innate conservatism of the sector. But it also demonstrates the tremendous fear of things going wrong as a result of pipeline ruptures and accidents, which can cost enormous sums of money."
In Europe gradually polymers other than polyolefins are being introduced into the sector, like polyurethanes, polyamides and powder coatings. But trials of new coatings systems and materials, often in partnership with equipment manufacturers, can take several years before they are launched on the market.
Borealis, one of Europe's largest polymer producers, started developing in 2006 materials and an application machine with KWH Pipeline Technology of Finland for coating field pipeline joints in which molten polyethylene is used. Coating joints is a crucial part of the pipeline laying process because the welding between pipe sections is the area where the most serious ruptures occur.
"Full market launch is now under preparation including the provision of detailed certification as required by the major oil and gas companies," said a Borealis official. "All the big oil and gas companies have signalled their interest in the process."
Arkema, a French-based materials producer, has joined with Cybernetix, a specialist in automation and monitoring systems, to develop a robotic technology for the internal application of polyamide 11 coatings inside pipelines.
As it looks ahead to a promising future, the pipeline coatings sector in Europe will continue to be mainly a combination of the two disciplines of chemistry and engineering.
