Market Trends of Compressor Industry
Oil and Gas Segment Expected to Dominate the Market
- The oil and gas industry offers widespread applications for positive displacement and dynamic compressors, including the upstream, midstream, and downstream sectors. The compressors serve various purposes across the oil and gas industry, such as gas transportation, compression for gas injection, gas gathering, gas lift, etc.
- In oil and gas upstream operations, gas lifts are used, in which low-pressure gas (3 to 7 bar) is compressed to a higher pressure and recycled down the well casing-tubing annulus through a gas lift valve into the tubing at a predetermined depth that enables to lighten the liquid column in the tubing.
- Dynamic compressors are used in later phases to maintain or increase gas flow into the pipeline systems in gas fields, as the reservoir pressure tends to decrease over time. The gas reinjection is used for enhanced oil recovery (EOR) to compensate for the natural decline in production from the oil fields.
- With the increasing environmental awareness over the last decade, most countries have planned to lower carbon emissions by shifting from coal-based electricity to gas-based energy generation. The increase in natural gas production and its consumption for power generation is likely to continue, which is expected to support the demand for compressors from the oil and gas industry. In 2022, around 4043.8 billion cubic meters of natural gas were produced globally, per Energy Institute (EI).
- For instance, India is developing its gas pipeline infrastructure to meet the growing demand. The Indian government announced a pipeline project in various states.
- On a similar note, the government of China has set a target to achieve net-zero emissions by 2060. Under the country's energy transition plan, natural gas is expected to play a crucial role in reducing CO2 emissions, and it is expected to be the country's largest energy source in the next decade.
- Further, according to the United States Energy Information Administration (EIA), in the long term, due to expected increases in international demand for natural gas, the country's LNG exports are expected to more than double between 2020-2029, which is likely to have a positive impact on the compressor market.
- Therefore, owing to the above points, the oil and gas segment is expected to dominate the compressor market during the forecast period.
Understand The Key Trends Shaping This Market
Download Sample
Asia-Pacific to Dominate the Market
- Asia-Pacific is home to some of the world's largest consumers and largest importers countries of natural gas. This region still primarily depends on oil and coal for its energy needs. But the recent trend is toward increasing the use of natural gas owing to growing concerns over air pollution.
- The power generation and manufacturing industries are the region's biggest natural gas consumers. Increasing demand for electricity in countries such as India and China is expected to drive natural gas demand.
- Urbanization and the increasing middle class in countries in the Asia-Pacific region are expected to drive the growth of residential gas consumption. The growing gas consumption is expected to help drive the gas compressor demand in the midstream gas industry and the power and manufacturing industry.
- China is committed to strengthening its oil and natural gas pipeline network in the next ten years to boost further the clean fuel's share in China's energy mix. According to the National Development and Reform Commission, the country's oil and gas pipeline network is expected to reach 240,000 km by 2025. Out of the 240,000 km, the natural gas pipelines are expected to reach 123,000 km. As compressors are one of the most used equipments powering the long-distance natural gas pipeline, the growth in the pipeline network is expected to drive the demand for compressors during the forecast period.
- Similarly, India is investing in its petrochemical business which is anticipated to create a rising demand for compressors. For instance, in June 2021, the Indian Oil Corporation (IOC) signed a memorandum of understanding (MoU) with the Gujarat government to set up six different projects, including the LuPech project for petrochemicals Acrylics-Oxo Alcohol project at Dumad near Vadodara and hydrogen dispensing facility around Vadodara. The projects combined will entail an investment of USD 3.25 billion.
- Therefore, due to the above points, Asia-Pacific is expected to dominate the compressor market during the studied period.
Get Analysis on Important Geographic Markets
Download Sample
