Tuesday, September 17, 2019
(September 17, 2019) — The global LPG market was valued at $277.93 billion in 2018 and is expected to reach $359.32 billion by 2025, notching a 3.1% compound annual growth rate (CAGR), according to a new report by Zion Market Research. The firm observes that rapid urbanization and enhanced purchase parity among populations in emerging economies are key factors driving the LPG market.
Further, the transportation industry in developing countries is witnessing a major shift, with rapid developments in all modes of transport. Steep rates of motorization in emerging economies has also triggered the growth of the global LPG market. In addition, the industrial sector, especially the petrochemical industry, has escalated market expansion. Also contributing is the shift to LPG from conventional fuels like coal, kerosene, wood, and dung for cooking and other domestic applications.
“Furthermore, the development of petrochemical projects such as propane dehydrogenation [plants] and steam crackers are projected to generate lucrative growth opportunities for this global market,” Zion observes.
However, the research firm adds that while LPG is being promoted as a clean fuel source for automobiles—the fuel emits a remarkably lower level of carbon dioxide com- pared to conventional vehicle fuel sources—low aware- ness among rural and low-income populations, reluctance toward its acceptance, and fluctuation of LPG costs due to volatility in the crude oil market may impede this sector’s contribution to the global LPG market.
The consultancy further notes that the LPG market is fragmented on the basis of source and end-user. By source, the market includes associated gas, non-associated gas, and refineries. Globally, the refineries segment is the largest source of LPG and holds about a 40% market share, followed by associated and non-associated gases. On average, 3% of extracted crude oil is used for LPG production.
Generally, the prime source of LPG output varies according to region. For example, in North America natural gas processing units are the major source of LPG production. There the refinery segment is expected to retain its market leadership with the highest revenue. The non-associated gas segment will grow rapidly over the forecast time period. On the basis of end-user, the market comprises residential and commercial, industrial, petro- chemical and refineries, and transportation. The residential and commercial segment holds the highest market share, about 45%, due to large-scale LPG utilization for cooking in the Asia Pacific and Latin American regions.
The Asia Pacific LPG market is the leader in terms of revenue and is projected to sustain its global leadership over the forecast period with the highest CAGR. This regional dominance can be attributed to widespread acceptance of the fuel for cooking. The region has witnessed a dramatic shift from conventional fuels to LPG and other domestic applications. This has resulted in unprecedented regional market growth. Initiatives in emerging economies such as the promotion of LPG by the government of India are also fueling the market in the region. And activities related to shale oil and gas production in China have also boosted LPG production in the Asia Pacific.
Zion Market Research writes that North America holds a distinct position in the LPG market globally, owing to rapidly rising shale gas production. North America has triggered its shale oil and gas production to reduce its dependence on imported crude oil from Persian Gulf countries, which has resulted in significant growth of LPG output. The promotion of LPG as a clean energy source for both residential and transportation applications is also expected to boost the market in the region.
Europe accounts for a significant share of the global LPG market due to the fuel’s regional use as a feed- stock in various industries like petrochemicals, food processing, metal processing, and ceramic industries, among others, and the increasing number of regional refineries.
Africa is enriched with various sources of fossil fuels, which make it a distinguished supplier of the global LPG market. Gulf Cooperation Council countries like the United Arab Emirates, Saudi Arabia, and Qatar, along with non-members such as South Africa, account for a major share of the Middle East and African LPG market. Separately, the Latin American market is expected to exhibit modest growth owing to increased LPG use for cooking.
(SOURCE: The Weekly Propane Newsletter, September 16, 2019. Available by subscription.)
Further, the transportation industry in developing countries is witnessing a major shift, with rapid developments in all modes of transport. Steep rates of motorization in emerging economies has also triggered the growth of the global LPG market. In addition, the industrial sector, especially the petrochemical industry, has escalated market expansion. Also contributing is the shift to LPG from conventional fuels like coal, kerosene, wood, and dung for cooking and other domestic applications.
“Furthermore, the development of petrochemical projects such as propane dehydrogenation [plants] and steam crackers are projected to generate lucrative growth opportunities for this global market,” Zion observes.
However, the research firm adds that while LPG is being promoted as a clean fuel source for automobiles—the fuel emits a remarkably lower level of carbon dioxide com- pared to conventional vehicle fuel sources—low aware- ness among rural and low-income populations, reluctance toward its acceptance, and fluctuation of LPG costs due to volatility in the crude oil market may impede this sector’s contribution to the global LPG market.
The consultancy further notes that the LPG market is fragmented on the basis of source and end-user. By source, the market includes associated gas, non-associated gas, and refineries. Globally, the refineries segment is the largest source of LPG and holds about a 40% market share, followed by associated and non-associated gases. On average, 3% of extracted crude oil is used for LPG production.
Generally, the prime source of LPG output varies according to region. For example, in North America natural gas processing units are the major source of LPG production. There the refinery segment is expected to retain its market leadership with the highest revenue. The non-associated gas segment will grow rapidly over the forecast time period. On the basis of end-user, the market comprises residential and commercial, industrial, petro- chemical and refineries, and transportation. The residential and commercial segment holds the highest market share, about 45%, due to large-scale LPG utilization for cooking in the Asia Pacific and Latin American regions.
The Asia Pacific LPG market is the leader in terms of revenue and is projected to sustain its global leadership over the forecast period with the highest CAGR. This regional dominance can be attributed to widespread acceptance of the fuel for cooking. The region has witnessed a dramatic shift from conventional fuels to LPG and other domestic applications. This has resulted in unprecedented regional market growth. Initiatives in emerging economies such as the promotion of LPG by the government of India are also fueling the market in the region. And activities related to shale oil and gas production in China have also boosted LPG production in the Asia Pacific.
Zion Market Research writes that North America holds a distinct position in the LPG market globally, owing to rapidly rising shale gas production. North America has triggered its shale oil and gas production to reduce its dependence on imported crude oil from Persian Gulf countries, which has resulted in significant growth of LPG output. The promotion of LPG as a clean energy source for both residential and transportation applications is also expected to boost the market in the region.
Europe accounts for a significant share of the global LPG market due to the fuel’s regional use as a feed- stock in various industries like petrochemicals, food processing, metal processing, and ceramic industries, among others, and the increasing number of regional refineries.
Africa is enriched with various sources of fossil fuels, which make it a distinguished supplier of the global LPG market. Gulf Cooperation Council countries like the United Arab Emirates, Saudi Arabia, and Qatar, along with non-members such as South Africa, account for a major share of the Middle East and African LPG market. Separately, the Latin American market is expected to exhibit modest growth owing to increased LPG use for cooking.
(SOURCE: The Weekly Propane Newsletter, September 16, 2019. Available by subscription.)
