Shale Gas Processing Equipment Market
Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2025)
All interactions and sensitive information remain confidential.
Custom Research Service
Undertaking exclusive research tailored for your business.
US Shale Boom Augurs Well for Shale Gas Equipment Sales
Globally, the shale deposits are unevenly distributed worldwide and, for the most part, not located where freshwater is abundant. The shale boom in the US unleashed a flurry of construction of new gas processing plants, with which came a major surge in gas processing capacity. As the shale gas processing equipment is used for natural gas processing purposes, it is likely that the demand for shale gas processing equipment will be on the rise over the foreseeable future. The use of horizontal drilling along with hydraulic fracturing has expanded the ability of the producers to economically recover crude oil, and natural gas from low-permeability geologic plays-particularly shale plays. The shale gas processing equipment serves a major role post-extraction of shale gas from shale reservoirs. The rise in shale gas discovery is anticipated to pave the way for the players involved in shale gas processing equipment market.
High Potential Reserves and Energy Security Concerns to Drive Growth
The market is driven by oil and gas industry’s needs to develop unconventional resources such as tight oil, tight gas, and shale gas to have a continued supply of oil and gas in long run. Rising demand for natural gas has made the oil and gas exploration and production (E&P) companies to look for oil beyond horizons. This has shifted their interest from recovering the natural gas from oil wells to extracting it from shale formations. However, the discovery of shale gas, and investment rise due to horizontal drilling techniques remain the major restraints. Also, environmental constraints, followed by underground water contaminations, are some of the other restraining factors of shale gas extraction. A majority of E&P players involved in shale gas extraction and recovery are backing out to invest further looking at the potential risks associated with oil and gas prices in the future. Low prices, and uncertain demand growth clearly indicate that many companies may need to permanently lower their cost structure, which holds a direct impact on the demand for shale gas processing equipment in the global market.
The declined demand amid COVID-19 pandemic has been posing a moderate impact on natural gas markets, with consumption flat year over year as the viral outbreak caused reduced liquified natural gas (LNG) exports. However, lower oil prices have led to shale well shut-ins, driving down associated gas production by potentially 10 billion cubic feet per day in 2020. Companies are now looking forward to the new normal in the oil market during the Great Compression. Gas production grew faster than its consumption in 2019, resulting in more gas being sent to underground storage.
Development of Efficient Equipment for Process Optimisation to Boost Sales
In terms of technology, hydraulic fracturing is widely used to extract shale gas. The shale gas processing equipment includes compressors, pumps, electrical machinery, heat exchangers, internal combustion engines, and measuring devices. Cost-effective process optimisation in shale gas processing still remains the key challenge for numerous players involved shale gas processing landscape. Moreover, the shift from traditional approach of building, and developing a plant to the modular shale gas processing plant construction approach has forced many plants to perform below their maximum potential. However, with the pace of buildout now having slowed down, significant opportunities exist to improve efficiencies, and profitability in gas processing plants. This provides ample opportunities to vendors involved in shale gas processing equipment. Companies can use information-enabled systems, tools, and technologies in a connected enterprise to turn these opportunities into financial success.
North America Leads in Terms of YoY Shale Gas Production
North America is poised to lead the shale gas processing equipment market, followed by Asia Pacific. The US natural gas production is driven by the continued development of the Marcellus, and Utica shale plays in the East. The global gas production continued to grow strongly in 2019, rising by 3.5%, or 136 billion cubic meters, which was led by the US, accounting for 64% of the global supply increase in 2019. Shale gas production surged by 10% in the US, supported by the higher output from the Appalachian, and Permian basins. Downstream opportunities in the shale gas market, increasing energy demand, and production benefits through shale area were the main factors driving the market, and on the flip side, the environmental issues such as the potential water contamination below the earth’s crust, government policies, and stringent regulations are constraining the market from growth.
In Asia Pacific, China has more than 1,250 trillion cubic feet of shore gas reserves, followed by Australia at 395 trillion cubic feet. In the Asia Pacific region, China, and Australia contributed most to the gas supply growth. China’s gas production was up by 9.8% in 2019 on a strong governmental push to raise domestic gas supply. Production in Australia rose 18% as it ramped up LNG exports. Thus, high demand for shale gas processing equipment is expected in the future. In 2019, Europe’s natural gas output fell by 7% owing to lower production from the Groningen field in the Netherlands. Supplies from Norway also declined. In Latin America, Brazil, and Argentina have more than 600 trillion cubic feet of potential shale gas reserves. However, technological, and investment constraints, followed by lower price of natural gas in the market, continue to result in lower extraction. This is likely to impact the demand for shale gas processing equipment in the Latin American region. In the Middle East & Africa, South Africa's shale gas resource endowment is garnering interest of investors as it may be attractive for use of that natural gas as a feedstock to their existing gas-to-liquids (GTL), and coal-to-liquids (CTL) plants.
Global Shale Gas Processing Equipment Market: Competitive Landscape
Some of the key players involved in shale gas processing equipment market include Exterran Corporation, GasTech Engineering LLC, Pall Corporation, Camaron, Honeywell UOP, Linde Engineering, Pall Corporation, Johnson Controls, Newpoint Gas LP, Membrane Technology & Research, Exterran, and Van Gas System, and Schlumberger Limited.