The cryogenic equipment market is expected to rise at a CAGR of more than 4% during the forecast period of 2020-2025. Increasing usage of natural gas and LNG by the countries to phase out or shift from the coal-based energy to a cleaner form of energy is likely going to drive the cryogenic equipment market. However, the costly process of liquefaction for cryogenic gases is expected to restrain the cryogenic equipment market.
- Due to its use in multiple industries to carry out different types of jobs, the tank segment is expected to be the largest growing segment in the cryogenic equipment market during the forecast period.
- Advancement and development in the cryogenic technology in healthcare and the medical field is expected to create several opportunities for the cryogenic equipment market in the future.
- Due to the constant growth of industries using cryogenic equipment, Asia-Pacific is expected to be the largest and fastest-growing market for cryogenic equipment during the forecast period. In 2018, approximately 74% of the global LNG was imported into the Asia-Pacific region.
Key Market Trends
Tanks Segment Expected to Experience Significant Market Growth
- Tanks used for cryogenic purposes are generally called cryotank or cryogenic tanks. These tanks are usually made up of double or triple layers having space in between filled by insulating material and vacuum. These tanks are mostly used for storage and transportation purposes.
- As of 2019, many countries in the world have planned to phase out from coal-based energy to decrease the greenhouse gas effect on the environment. For the above cause, many countries started reducing the usage of coal and increases using natural gas for energy and power generation. Gas is more comfortable to be transported in liquefied natural gas (LNG) form that includes various segments of cryogenic equipment such as tanks and is likely to drive the market during the forecast period.
- As of 2018, the global import of LNG for the countries was 431 billion cubic metres (bcm), which was higher than the global import of 393.9 billion cubic metres (bcm) in 2017. The increase in the transportation of LNG is expected to trigger the tanks segment and attract investment from different market players.
- In 2019, VINCI Construction signed an engineering, procurement, and construction (EPC) contract with Novatek to build two new cryogenic LNG tanks on the Yamal Peninsula, Russia. The two new LNG storage tanks are expected to have a capacity of 160000 cubic meters.
- In 2019, Mcdermott signed an EPC contract with Precision Mechanical, Inc. to build a double wall liquid hydrogen storage tank at the John F. Kennedy Space Center in Cape Canaveral, Florida, United States. The contract includes the engineering, procurement, and construction (EPC) of the tank, which will be the largest ever built for NASA. The storage tank is expected to have a containment capacity of 1400000 gallons.
- Hence, owing to the above points, the tanks segment is likely to see significant growth in the cryogenic equipment market during the forecast period.
Asia-Pacific Expected to Dominate the Market
- Due to the constant increase in the energy demand and several developments in the fields, such as space research, healthcare, and chemicals, the Asia-Pacific region is likely to be the fastest-growing and largest growing market for the cryogenic equipment market.
- Japan is the largest importer of LNG in the world, whereas countries such as China and India have seen a considerable increase in LNG imports in the last decade. Asia-Pacific is the largest importer and the largest exporter of LNG in the world. This involvement in the LNG uses a variety of equipment from converting gas into LNG, to its transportation, distribution, and storage.
- In 2019, IHI Corporation received an order for an EPC of two above-ground LNG tanks for LNG receiving terminal jointly with a significant construction company in India, Afcons Infrastructure Ltd., and signed a contract. The LNG receiving terminal is going to be constructed at the HSEPL Site at ChharaPort, Gujarat Province. The storage capacity is 200000 kiloliters per unit, which is the largest in India and is expected to be complete by 2022.
- In 2018, Linde Group was awarded an EPC contract from Chinese chemical and energy company Inner Mongolia Huineng Coal Chemical Co Ltd to supply a mid-scale LNG plant near Beinichuan in Inner Mongolia, China. The plant is expected to have a capacity of 750000 tonnes of liquefied natural gas (LNG) per annum. Several cryogenic types of equipment are likely to be used for the LNG plant’s functioning, such as storage tanks, valves, heat exchangers, etc. This is the company’s seventh and the largest LNG plant in the country.
- Hence, owing to the above points, Asia-Pacific is expected to dominate the cryogenic equipment market during the forecast period.
The cryogenic equipment market is moderately fragmented. Some of the key players in this market include Linde plc, Emerson Electric Co., Beijing Tianhai Industry Co Ltd, Cryofab Inc, and Chart Industries, Inc.
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