Industry Analysis & Industry Trends
The Pipeline Transport industry chiefly concerns high-pressure gas transmission. Small amounts of petroleum travel through pipelines, but they are an uneconomical way to transport most substances. Demand for gas transport is mainly affected by levels of electricity production and the amount of gas that is imported.
Industry revenue is estimated to rise over the five years through 2016-17, growing at a compound annual rate of 1.7%. This reflects the fact that a falling share of electricity is being produced using coal, which is not transported through the industry's pipelines. A number of coal-powered plants have closed over the past five years due to more stringent regulation... purchase to read more
Industry Report - Industry Investment Chapter
The level of capital intensity in the Pipeline Transport industry is high, due to the huge amount of investment required for the establishment and maintenance of pipelines. IBISWorld estimates that for every £1.00 spent on capital, 36p is spent on wages in 2016-17.
Gas transmission is a capital-intensive process. Depreciation is a substantial cost because of the high level of capital spending required to both maintain and expand high-pressure gas transmission networks. The National Grid in particular invests heavily in the gas transmission system in Great Britain due to its dominant nature. The company's gas transmission property, plant and equipment is valued at more than £4 billion. This demonstrates the extent of the capital base needed to succeed in the industry.
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