The global liquid natural gas (LNG) market is expected to reach USD 20.6 billion by 2025, growing at a CAGR of 12.7%, according to a new report by Grand View Research, Inc. Rising focus on development and expanding gas pipeline infrastructure and growing demand for natural gas from downstream sectors is a crucial driving factor for the industry.
Decreasing LNG prices along with execution of favorable government rules and regulations, which are attracting FDIs & tax schemes are also conducive to industry growth. Cumulative emphasis of adequate support infrastructure in numerous economies is anticipated to enhance product demand in the construction sector, since the product is used in building equipment.
On the contrary, insufficient channel infrastructure is supplementing demand for small scale projects to source natural gas for key consumers in remote areas, specifically in the power generation and industrial manufacturing verticals. Rapid urbanization, industrialization and increasing projects supporting power, gas & petrochemical distribution are projected to positively provide stimulus to the industry.
Power generation accounted for 46% of the volume share in 2016, and is anticipated to grow at over 6.9% CAGR from 2017 to 2025. Power generation plants are gradually shifting from naphtha-based feedstock towards LNG in order to provide cost-competitiveness and enhanced delivery times while also receiving support in the form of favorable regulations encouraging these trends.
Further key findings from the report suggest:
- The global LNG market demand exceeded 265 million tons in 2016 and is expected to grow at a CAGR of 6.5% from 2017 to 2025
- Transportation is emerged as the largest application in 2016 and is estimated to generate revenue over USD 3.6m billion by 2025 owing to widespread adoption of sustainable resources in place of conventional fuels
- Prices in North America are expected to be dependent upon the Henry Hub model, while demand in South Africa is likely to continue being unpredictable on account of civil unrest and fluctuating supply dynamics
- Europe is likely to witness moderate progress with rising competition from Russia and Norwegian piped natural gas (PNG). Africa is expected to remain a rapidly developed market with new production strategies in the Cameroon and development anticipated in Mozambique.
- Asia Pacific consumption patterns are projected to remain exponentially high over the next decade owing to various developments across emerging economies, especially in the power generation and transportation market. The region is expected to grow at a CAGR of 6.5% from 2016 to 2025
- Key players including Chevron, Exxon Mobil, PetroChina, Total SA, Stat oil, Eni S.p.A., BP plc, Royal Dutch Shell, Conoco Philips and CPCC dominated the sector accounting for over 60% of the total volume in 2016