Small-scale LNG Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The small-scale LNG market was estimated to be USD 6.85 billion in 2019, and it is expected to regsiter a CAGR of 12.63% during the forecast period of 2021-2026. The COVID-19 pandemic has severely impacted the market due to disruption in the supply chain, reduction in energy consumption, and discouraging investments in newer technologies. However, with increasing pressure on large-scale LNG plants to showcase returns to investors, the operating companies are increasingly backing small-scale LNG initiatives. The small-scale LNG plant with a capacity of less than 1 MTPA can be constructed within three years, compared to large-scale LNG plants, which can take up to 10 years. Moreover, factors, such as increasing demand for LNG in bunkering, road transportation, and off-grid power, are expected to drive the small-scale LNG market in the coming years. However, factors such as the high operation cost of small-scale LNG and lack of supporting infrastructure in the regions such as the Middle-East and Africa and high CAPEX requirements, along with a long payback period of more than 12 years, are expected to hinder the growth of the market studied.

• Transportation application is expected to dominate the small-scale LNG market, owing to the increasing demand for LNG as a fuel source for ships and heavy-duty trucks.
• Owing to the high capital expenditure required for a small-scale LNG infrastructure, the development of cost-efficient small-scale LNG infrastructure is expected to provide significant opportunities to the small-scale LNG technology providers and transporters in the future.
• Europe dominated the market across the world, with the majority of the demand coming from countries such as Norway, Spain, and the United Kingdom.

Scope of the Report

The small-scale LNG market report includes:

Report scope can be customized per your requirements. Click here.

Key Market Trends

Transportation Segment is Expected to Dominate the Market

• LNG is primarily used to fuel trucks and ships, mainly due to its economic and environmental benefits, as compared to diesel and fuel oil. Since LNG is non-corrosive and non-toxic in nature, it can extend the life of a vehicle by up to three times. Moreover, since LNG has an extremely low boiling point, very little heat is required to convert it into a gaseous form at high pressure, with negligible mechanical energy. This makes LNG an efficient fuel for transportation. ​
• Handling LNG is an immense task since even a slight difference in the temperature can lead to the boiling and vaporization of fuel, which, in turn, leads to fuel wastage. Therefore, it makes passenger cars far less viable than heavy vehicles, such as commercial trucks. This has limited the application of LNG in the transportation segment.​
• The use of LNG as a transportation fuel is gaining momentum across the world. China, the United States, and Europe have already started deploying LNG-powered trucks, mainly for long-distance freight carriage. This is mainly due to the government policies and regulations on decarbonizing and emission control, such as China VI and European Green Deal. ​
• Formed in 2019 by the European Commission, the European Green Deal is a set of policy initiatives with an aim to make Europe carbon-neutral by 2050. The policies briefly underline the importance of LNG in reaching the aim, and they emphasize the usage of LNG as fuel for trucks and marine vessels.​
• According to SEA-LNG, as of 2020, there were 75 LNG-fueled ships in operation, and 155 LNG-fueled ships were on order.​
• In January 2020, the International Maritime Organization began implementing a new regulation by placing a 0.5% global sulfur cap on marine fuels. Thus, LNG has become a more viable option as a marine fuel since it emits almost 90% lower NOx and virtually no SOx and particulate matter in comparison to the existing petroleum-based marine fuel oils. Therefore, in this clean air initiative, LNG will play a key role. This will also have a significantly positive impact on the small-scale LNG market. ​
• Hence, owing to the above-mentioned factors, the demand for small-scale LNG infrastructure for the transportation segment is likely to grow and significantly dominate the market during the forecast period.​

To understand key trends, Download Sample Report