Increased market activity is expected to continue across our international segment. The Russian-Ukrainian conflict continues to push investments in Europe towards becoming independent of Russian energy supplies.
In the DIET sector, increased investments are expected in the LNG sub-sector because of increased LNG demands in Europe. In addition, we expect to see a continuation of investments pouring into projects aimed towards repurposing infrastructure for clean energy options, such as renewable biofuels and hydrogen.
Upstream activity is gathering pace in the international segment, particularly the North Sea area. A considerable number of new major oil and gas and offshore wind projects have matured from front end engineering and design (FEED) into the execution phase. At the same time, there has been a drive to maximize the production of oil (price-driven) and gas (demand-driven) that has resulted in fast-track developments. These activities are expected to drive growth in procurement during 2023 and 2024.
We expect modest price increases in 2023 across pipe, valve and fitting (PVF) product groups from international suppliers, driven by inflationary pressure. Ocean freight costs are nearing pre-pandemic levels; however, caution should remain as China might encounter supply chain disruptions due to their current COVID-19 outbreak, which could result in unpredictable cost increases.