The global oil and gas pipeline sector might be better off looking for “new opportunities” and be prepared for “future disasters,” GlobalData warned on Thursday.

The analytics company said pipeline operators are mitigating the negative impact of the Covid-19 crisis by postponing final investment decisions (FIDs) and other measures. These offer temporary relief, but on a longer-term future, more actions may be needed, Kallanish Energy learns.

“Delaying FIDs, slashing capital expenditure and stalling projects have become the norm for several pipeline operators to conserve cash and sustain the Covid-19 crisis,” said GlobalData.

However, the pandemic puts the sector under vulnerability as it affects demand for fuels and weakens global economic growth. “With the recurring nature of the pandemic, pipeline operators globally might encounter an uphill task to fully recover from its devastating impacts,” the firm said.

According to O&G analyst Haseeb Ahmed, diversification may be the key for risk mitigation and ensuring sustainability. “Also, focusing more on revenue generating streams by augmenting operational efficiency using breakthrough technologies such as data analytics might help companies during times of crisis,” he added, without elaborating further.

Recent delayed FIDs include Phillips 66 Partners’ Ace Pipeline and Enbridge’s Rio Bravo Pipeline. Meanwhile, Australian pipeline operators Woodside and Santos have cut their capex this year by around 62% and 37%, respectively.

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