COVID-19 Impact on Pharmaceutical Packaging in Chemicals and Materials Industry

COVID-19 Impact on Virtual Pipeline Systems in Chemical and Materials Industry

  • Chemical and Materials
  • Jun 16, 2021

COVID-19 Impact on Virtual Pipeline Systems in Chemical and Materials Industry

INTRODUCTION

Virtual pipeline is a system that allows natural gas transportation in the form of compressed/liquefied gas using modules coupled to mobile platforms, which are transported by trucks, ferry boats, boats and/or rail platforms. In virtual pipeline systems, the simple gases and highly toxic gases are transported to different industries and residential for daily use.

Rather than build pipelines across remote, rugged or highly-populated terrain, a new “solution” called “virtual pipelines” has come on the division, with roots in New England in 2011. In virtual pipeline systems, specially designed container or tanker trucks move compressed natural gas (CNG) or liquefied natural gas (LNG) via our highways and public roads. The gases are stored in the high pressure in the tankers so that the tankers can easily load onto train, cars or boats. The demand for the virtual pipeline has increased due to increasing demand of different type of gases in industries. Several industries are located where physical pipeline is not available.

The virtual pipeline systems involve the transportation of the natural gas products through various mode of transportation instead of physical pipelines. Industries which are in remote area are benefited from the virtual pipeline systems as specified quantity of gases can be ordered for industrial use. The virtual pipelines lower the maintenance cost which is very high in the physical pipeline systems. Virtual pipeline are very cost effective due to lower replacement cost and bulk quantity of gases can be stored and transported through ships. The virtual pipelines do not have impact on the environment as compared to the physical pipeline.

Several advantages associated with the virtual pipeline systems are convenience to a remote location and ideal for extreme weather conditions and several government initiatives and programs regarding the modernization of infrastructure. The major factor impacting the virtual pipeline systems market negatively is limited transportation capacity of tankers, due to which the cost of transportation increases in virtual pipeline systems. The opportunity for the virtual pipeline systems market is aging physical pipeline infrastructure across the globe, due to which the demand for virtual pipeline systems will increase in various applications.

IMPACT OF COVID-19 ON VIRTUAL PIPELINE SYSTEMS

The pandemic situation which is created due to COVID-19 has hit the economy very hard worldwide. The lockdown rules and regulations have been enforced in all the regions which have made the condition challenging for all sector for development and also the developing actives will take place in the stager manner. The COVID-19 has formed the pandemic situation in all over the world due to which the economies of all the countries have been affected on the larger extend and will recover in very steady pace. The manufacturing industries were producing 20% of their total capacity due to which manufacturers have to face the huge losses during the period.

Virtual pipeline systems refer to the type of system which allows natural gas transportation in the form of liquefied gas by the usage of modules coupled to mobile platforms that are transported through trucks, boats, or rail platforms. In the virtual pipeline systems, the CNG or LNG gases are transported to the point via road, sea, rail or a combination of one or more of these transport modes. The CNG and LNG gases are loaded into cryogenic containers for transportation from its source. The gases can be imported from terminal, distribution hub or liquefaction plant to the point of use.

The virtual pipeline systems are used in a wide range of sectors such as industrial, transportation as well as in commercial and residential. The virtual pipeline systems are available in various types, such as ordinary and special. The gases can be stored in different quantity in the tanks according to the use. The oil and gas industry is facing a lot of problems in the pandemic. Due to the outbreak of COVID-19, the demand for such virtual pipeline systems has gone down as lowered the consumption of various gas products in industries.

The decreased level of demand has limited the production capacities as well as lack of workers at the factory level is interrupting the manufacturer’s growth. Though, the manufacturers are working constantly on the management of the problem which they are facing due to the lockdown. The government and various countries are trying to maintain the level of supply along with the rate of demand. The measures may help in quick coping up from the problem of loss of sale that happens in the virtual pipeline systems market.

The demand for virtual pipeline systems has gone down after the spread of coronavirus. The fear of the virus has increased the awareness among people, which has resulted in getting locked at homes. Virtual pipeline systems along with other oil and gas industries are constantly diminishing. It is observed that virtual pipeline systems demand has decreased mainly due to the downfall in the oil industry. The demand for the natural products is increased in the residential which helps the virtual pipeline company to earn revenue during the pandemic. In residential applications, the demand for the gases is not in the bulk quantity and re-ordering is not on frequent basis.

Lockdown measures started to impact gas demand from March. As in May 2020, consumption was 11% lower than March. Gas used in power plants was down by 11% in Italy and Spain in the last week of May, compared to business-as-usual. Industrial gas demand also declined by 11% in Italy and by 14% in Spain compared to expected demand.

In the U.S., the impact was limited, despite lower economic activity. Consumption of gases fell by 2.8% over January-May 2020. The main effect was on industrial gas demand from March onward due to factory shutdowns. Residential gas demand was increasing at very low rate. As the demand for the gas product was decline which impacted the price of the gases. Several industries have shifted from coal to the gas products during COVID-19 which increases the demand from the virtual pipeline systems.

In China, the impact of the virus on gas consumption was largely contained to early 2020 which have impacted the demand for the virtual pipeline systems. Lockdown measures slowed down demand growth to 1.6% in 1Q 2020 compared to 14% in 1Q 2019. Industries restarted gradually in 2Q 2020, which revived demand growth.

Government is also initiating the market growth for virtual pipeline systems by organizing several conferences related to virtual pipeline systems in other countries. The U.S. trade and development agency (U.S.TDA) will be funded to evaluate the development of a virtual pipeline that will distribute natural gas via truck, rail or ship to areas unserved by traditional gas pipeline infrastructure. The virtual pipeline will also enter into India while creating significant opportunities for the U.S.

IMPACT OF IMPORT OF LNG DURING COVID-19

Covid-19 Impact On Virtual Pipeline Systems In Chemical And Materials Industry

From the above diagram, we can infer that the demand of the LNG products have decline as in year 2020, the import of the LNG were falling in all regions. In Q1 of 2020, the import of LNG was 134.40 (BSCM) which fallen down to 120.70 (BSCM) in Q2 of 2020 also in Q3 of 2020, the import falls to 97.90 (BSCM). With the falling down of the import in the regions, the demand for the virtual pipeline also declined in the global market.

DURING SECOND WAVE OF COVID-19 IN DEVELOPING COUNTRIES, HEALTHCARE INDUSTRY ACTS AS AN OPPORTUNITY FOR VIRTUAL PIPELINE SYSTEMS

Majorly, the virtual pipeline is used in the transportation of the natural gases to industrial for the production of finished goods. Several industries and residential area in the remote location increases the demand for the virtual pipeline systems. During the COVID-19, the demand for the virtual pipeline has increased in the health care industry on larger extends. In the virtual pipeline systems tons of oxygen gases are been transported to hospitals in different location to fulfill the deficiency of the oxygen for the treatment of COVID-19 patients.

The second wave of COVID-19 in developing countries have increased the demand for the oxygen products as patients are located in remote areas and several hospital does not have pipeline systems. The demand of the oxygen has increased approximately 50% in the market. In India, several hospitals were running out of oxygen which was fulfilled by virtual pipeline systems.

With the increasing number of the COVID-19 patients in the countries, the government has taken steps to import the gasses products from other countries which have boosted the demand for the virtual pipeline systems in the second wave of the pandemic.

For instance,

  • Working with industrial gas major Linde India and others, the government is also using the Air Force's cargo planes to fly empty tankers to production hubs. Refilled oxygen tankers will then move back by road.
  • In India, the armed forces are importing 23 mobile oxygen generation plants from Germany.
  • Saudi Arabia is shipping 80 metric tonnes of liquid oxygen to India as the country is running low on supplies due to an unparalleled spike in coronavirus cases.
  • First shipment of 4 ISO cryogenic tanks with 80 tons of liquid oxygen is now on its way from Dammam to Mundra.
  • The Indian Air Force on Saturday brought four cryogenic tanks to be used for transporting oxygen from Singapore.

CONCLUSION

The COVID-19 crisis has created the pandemic situation widely which affected all the manufacturing industries all over the world. As the government imposed lockdown rules for all the manufacturing activity and sites which resulted in halt in the fabrication of the finished goods due to which demand of the gas in the manufacturing industries have stopped which lead to the huge loss for both the countries and producers and will show a steady growth in coming years. With the decline in the demand of the CNG and LNG in the industries, the virtual pipeline systems market has to face losses during the pandemic.

In the COVID-19, the demand of the gases have fallen down due to which several virtual pipeline providers have to face losses on the larger extend. The industries sector has shown the steady growth as several projects were delayed in the developing countries due to which the demand of the gasses in the industries has fallen down. With the increase in the COVID-19 cases in the courtiers, the demand for the oxygen is increased unexpectedly which creates the opportunity for the virtual pipeline providers and able to earn in the pandemic.

In the coming months of 2020 or post COVID-19, the demand of the LNG and CNG will increase in both industrial and residential sector which help in the upliftment of the virtual pipeline systems market. The demand in the other industries will also increase which help in the growth of the virtual pipeline systems market. Thus, the government is taking various initiatives to curb the demand-supply imbalance. Along with this, the manufacturers are making new techniques to revive from the current situation, which is expected to help maintain the demand for virtual pipeline systems.