Northern Sky Research

Pipeline Spills Spur SATCOM Spending

Jun 27th, 2012 by Brad Grady   More from this Analyst | Profile

On the footsteps of two previous oil spills, repair crews continue to clean up a spill of heavy crude oil onto farmland in Alberta, Canada. In 2010 alone, for example, the Alberta province recorded nearly two pipeline failures a day, causing disruptions across their pipeline distribution network.  The reason – corrosive oil sand-derived petroleum, which is at the forefront of the unconventional resource movement.   These unconventional resources, which have caused a boom in the exploration markets, will provide further incentive to pipeline operators to increase monitoring and control infrastructure across their new and existing pipeline distribution networks.

As NSR points out in its Oil and Gas via Satellite, 2nd Edition, pipeline safety applications will help drive the market to increase from nearly 46,000 In-service SATCOM units in 2011 to nearly 80,000 In-service SATCOM units by 2021.  Driven by the one-two punch of government regulation and corporate profitability, the traditional narrowband market will increase its bandwidth requirements.  From video-monitoring to VoIP services for remote workers, new applications are entering the traditionally SCADA-bound network of pipeline operations to help identify, diagnose, and repair potential trouble-spots.  Although North America accounts for only about one-third of In-service units by 2021, these new applications will become an omnipresent requirement for VSAT providers operating in the pipeline market across the globe.

A Ku-band dominated market, remote VSAT terminals for pipeline operators will need to incorporate traditional SCADA network design with modern IP-based applications.  As mentioned in NSR’s Oil and Gas via Satellite, 2nd Edition, pipeline operators will continue to rely on narrowband SCADA services for day-to-day operations; however, new installations will need to be able to operate at broadband-capable speeds to support these higher-bandwidth applications.  Critical Infrastructure Protection, alongside pipeline maintenance needs, will drive the adoption of video-based services on new and existing pipelines.  In the two-thirds of In-service units found outside North America, regulations are only expected to strengthen through 2021, as the global pipeline industry faces increasing security and environmental challenges.

Not only limited to Canadian pipelines transporting corrosive oil sand, sophisticated monitoring and control infrastructure will be a government-mandated norm to help protect people and the environment throughout the globe.  As an example, the pipeline regulator of India has proposed draft legislation that will include provisions for remote video and data-based pipeline integrity monitoring.  Satellite solutions are specifically mentioned within the draft legislation as part of an, “Integrated electronic surveillance system,” which could be integrated with a pipeline SCADA system to provide spill detection and physical-security monitoring.  Australia, similarly, is in the process of updating their pipeline safety legislation, and Russia, China, and other major countries are likely to review their pipeline safety legislation in the coming years.

Bottom Line

Regulators across the globe continue to increase pipeline safety regulations, which is only good news to satellite players in the pipeline market.  Broadband-capable remote terminals are finding their way into the RFPs of pipeline operators, video-monitoring is moving from nice-to-have to must-have, and an uptick in pipeline construction means new areas are opening up for satellite services.  Overall, this is one market where government regulations are helping boost the bottom line of satellite service providers.