Pipelines are big business and even bigger geo-politics. Just ask Russia’s President Vladimir Putin who without much fanfare cancelled the “South Stream,” one of the world’s largest pipeline projects. And there is the controversial Keystone XL pipeline project, which elicits a continental divide of opinions in the US congress. Dreams for new pipelines abound but political realities dampen prospects. Early this month, a 180-meters vessel laden with 32-inch diameter pipes got stuck in shallow waters off the Bulgarian port of Burgas. While undamaged and quickly towed back out to sea, the ship neatly illustrated the recent vagaries of the multi-billion-dollar pipeline industry and the shippers, freight forwarders and logistics specialists surrounding it. Days earlier, Russian President Vladimir Putin had without fanfare cancelled one of the world’s biggest pipeline projects, South Stream, which was designed to carry natural gas from Russia under the Black Sea to Bulgaria and then onto Western Europe, without having to pass through Ukraine. The $40 billion project got caught in geopolitics and Russia’s annexation last year of the Crimea. Bulgaria, under pressure from other European Union members, had put contract conditions on the project and Putin reacted in a fit of pique. Now, work is grounded. Pipes are piled up in yards. Pipe-laying ships chartered at $500,000 to $1 million a day are anchored on site. All sorts of suppliers are left in the lurch. The industry is scrambling to figure out what comes next. “I don’t know how this will end,” says one European pipeline manufacturer, with a note of exasperation in his voice. “I haven’t seen anything like this before.” South Stream isn’t the only pipeline project that carries voluminous controversy with it, as just about anyone in Washington can attest to these days. Witness the proposed Keystone XL pipeline, the 1,197 miles project designed to move tar sands oil from Canada through the American heartland to refineries on the Gulf Coast. Because it is so steeped in partisan politics, landowners’ rights and environmental concerns, the proposal has assumed an outsized importance that exceeds its $8 billion price tag. Often lost in politically charged undertakings such as South Stream or Keystone are the hundreds of other pipeline projects. Some are moving ahead full-steam, while others are quietly being delayed or scrapped altogether. Increased reliance on gas, the shale revolution and rising energy demands from emerging economies can all spur pipeline development. Energy price volatility, not to mention politics, can cause numerous project starts and stops along the way. In early 2014, for example, a Koch brothers’ company cancelled a proposed pipeline from the Bakken oil fields of North Dakota to Illinois. Then, last month, Enterprise Products Partnership announced that it was axing a proposed pipeline linking Bakken with Oklahoma. “Right now, the plunge in oil prices is the protagonist in gas and oil projects,” says Anthony Livanios, CEO of Energy Stream CMG, an oil and gas advisory firm based in Frankfurt, Germany and Washington DC. “It affects everything else.” Livanios, for one, believes low oil prices will delay or scuttle altogether some major pipeline projects. On the other hand, he continues, other efforts may actually be accelerated for reasons that range from diversification of supply to technological efficiency. Uncertainty rules. “Although I wouldn’t say it’s critical, the market is very tough at the moment,” says the pipeline manufacturer, who asked not to be identified. “We don’t know how it will proceed in the future.” The pipeline and pipeline construction industry is huge. It makes up a vital, but challenging sector for project cargo. “It’s tremendously time consuming and requires a lot of special handling,” says Thaswin Nagantran, COO of Mory-Tnte Mondial Express Sdn Bhd, a logistics provider based in Petaling Jaya, Malaysia, “It’s not your everyday cargo.” Just how many oil and gas pipeline projects are being built and how much the entire industry is worth represents a moving target. Estimates vary widely. Petroleum and Gas Journal’s annual survey at the end of 2014 said about 109,000 total miles of oil and gas pipelines “are planned or under construction worldwide,” of which 35,132 “are in various stages of construction.” Simdex Publishing puts the total number of “new registered projects” globally in 2014 at 538, representing 74,215 miles, for a total value of $168.3 billion. The energy consultancy Douglas-Westwood in 2013 estimated projects during a five-year period ending 2017 would total $216 billion, a 12% increase over the previous five years. The range of these projects is vast as well. The U.S. Energy Information Administration lists, for example, more than 160 discrete gas pipeline projects in various stages of construction, approval or announcement in the US. Many of these are small expansions to existing lines, and carry with them a price tag in the tens of millions. Seven (not including Keystone) have price tags of more than $1 billion. The most expensive is a proposed $5 billion, 550-mile natural gas pipeline called the Atlantic Coast Pipeline, which would snake from West Virginia into Virginia and then North Carolina. A consortium, including Duke Energy and Dominion, hopes to begin construction next year. Pipeline projects span the globe. In terms of both lengths of pipes and value of projects, North America leads the way, according to various surveys, with Asia not far behind. Europe, including Russia, comes next. However, South Stream shows how the picture can dramatically change in a matter of hours, despite project lead times that can stretch toward a decade. Putin announced that most of the gas originally destined to Bulgaria would instead be shipped to Turkey through a proposed new underwater pipeline, a development that caught everyone by surprise. Details have yet to be made public and many of those in the industry remain unconvinced. “These kinds of projects aren’t decided in one day,” says the supplier. “It takes months, years of work.” The sudden collapse of South Stream revived interest in a $3 billion pipeline project from Algeria to Italy. It further boosted as well the likelihood of the hugely ambitious Southern Gas Corridor being launched. This $45 billion, 2,100 miles series of pipelines is designed to bring gas from Azerbaijan to Italy via the Adriatic Sea. This project has already encountered lengthy delays and it could easily be five or six more years before the pipeline is operational. The industry is also attempting to analyze a mammoth 2,500 miles gas pipeline that will link eastern Siberia traverse Russia with China. Construction began late last year, although with a $20-plus billion price tag, the project has questionable viability, especially given China’s recent economic softening. “I am very skeptical where it will lead,” says Livanios, although he hastens to add: “Russia is not well known taking commercial decisions or planning long-term.” The Russia-China project heightens speculation as well of a possible pipeline from Russia’s Sakhalin Island to Japan and strengthens the desire of a pipeline linking China with South Korea, either via North Korea or under water. This tilt toward Asia bodes well for some in the business, says Sunny Choi, COO at Seoul-based logistics provider Daewon Logipia Co. “We believe the Chinese-Russia project is a very positive development,” says Choi, whose company specializes in project logistics, including the handling of Korean-made pipe. Korean pipeline manufacturers had seen their market share shrink over the past decade, but in the past year or two, mounted a concerted effort to regain business. In addition to Asia, Korean suppliers have landed contracts in South America and the Middle East, Choi explains. Geographic diversity helps spread the wealth and while some projects in Europe or North America may be in jeopardy, other locations are seeing an upsurge in activity. Grant Wattman, president and CEO of Agility Project Logistics, talks of “increasing opportunities in Myanmar, Vietnam, Malaysia and East Africa,” even as he anticipates more activity in North America “in support of shale gas, LNG and NGL exports and support of petrochemical complexes.” “What the next shift may be as a result of low oil prices, reduction in working capital and geopolitical issues, only time will tell,” Wattman says. Those handling pipeline logistics say the kind of uncertainty now surrounding Russian gas is just part of the game. These are projects that can stretch for years and involve months of careful planning with engineers and contractors. Logistics costs alone can run in the millions of dollars. On the other hand, when a project nears deadline, speed becomes tantamount and cost secondary. This is, after all, the oil and gas industry. “Gas projects are rush, rush, rush,” says Thaswin, whose company has extensive experience in pipelines in Eastern Malaysia. “If you can perform well, they’re willing to spend. They don’t screw around on the little things.” For those in logistics, pipeline projects can be lucrative, but are also arduous, exacting and difficult. “Long lead times, changing schedules, difficult locations and complex sourcing strategies are routine,” Wattman concludes. Pipelines must be transported to terrain that is often remote and many times rugged. Thaswin describes a 500-plus miles pipeline project connecting China and Myanmar that went online last year. Not only did the project battle crude infrastructure, but equipment itself, such as cranes and specially equipped trucks, had to be shipped in because it was unavailable locally. Wattman, who is based in Houston, notes the “increased complexity” in offshore projects, operating at sea and unloading from vessel to barge. Advances in pipeline technology complicate the process as well. Coated pipes leave little margin for damage. Then there are the compressors needed to keep gas moving under pressure over long distances. The usual rule of thumb is one compressor for every 120 miles of pipe. A single compressor can cost as much as $250 million. Damage can be catastrophic and hold up construction. Logistics providers rely on advanced technology themselves. Agility, says Wattman, has introduced iPhone-based systems for cargo status and delivery update. It’s also using drones for route surveys and overseeing vessel discharge and is now experimenting as well with their use for inventory management.