Substantial Application Base Upholds Demand for Turbo Expanders
Turbo expander or expansion turbine is basically a centrifugal or axial flow turbine through which a high-pressure gas is expanded to produce work that is often used to drive other machinery such as a compressor. This process avoids fuel consumption, improves overall process efficiency, and reduces plants’ environmental impacts. Turbo expanders are used extensively in hydrocarbon liquids extraction and widely utilized in all segments of the oil and gas industry, sustaining their demand in the global market. Other applications of turbo expanders include power generation, refrigeration systems, and power recovery in fluid catalytic crackers. The turbo expanders that are currently in operation range from 750 W to 7.5 MW (1 hp to ~10,000 hp). These turbo expanders are widely used as the source of refrigeration in industrial processes such as extraction of ethane and natural gas liquids from natural gas, liquefaction of gases, and other low-temperature processes, which significantly drives the global turbo expander market.
Rising Demand for Natural Gas followed by Fossil-fuel based Product Recovery to Boost Demand
The increasing demand for gas turbine in power generation plants is augmented to boost the sales of turbo expanders. A majority of power plant operators/owners are switching coal with natural gas, thus giving rise to the demand for turbo expanders. Rising concerns regarding excess carbon emission through the usage of coal as a fuel in power plants has made regulatory bodies to strictly monitor the industrial carbon emissions. This has compelled power plant operators to embrace sustainable fuel alternatives to comply with carbon emission standards. The increasing demand for natural gas in power generation is considered to be a major growth driver for this market. Growing demand for ethane, liquified petroleum gas (LPG) or natural gas liquids (NGL), hydrogen, and gas-to-liquid (GTL) is expected to benefit the turbo expander market in the near future.
Supply and Operations Experience a Heavy Dent amid COVID-19 Pandemic
Unlike other industries, the COVID-19 pandemic has hit the supply of turbo expanders. Delays in oil and gas, petrochemicals, power plant planned engineering, procurement, and construction (EPC) work has badly impacted the sales of turbo expanders. Along with the new sales, the retrofit or operation and maintenance market for turbo expanders has also declined due to strict lockdowns imposed across several countries. The unavailability of spare parts and skilled technicians was the key reason for these declines. However, the market is beginning to revive post-unlock activities due to the backlog demand. Furthermore, a U-shaped recovery is expected in the turbo expander market post-2020.
Demand Prominent in Oil and Gas Industry
Gas turbo expander, and liquid turbo expander are the key types of turbo expanders. Oil and gas, chemicals and petrochemicals, and power plants have been the major end users of turbo expanders worldwide. In these industries, turbo expanders are in demand for various applications such as in natural gas treatment plant, liquified natural gas (LNG) plant, petrochemical plant, clean power generation, and hydrogen and synthesis gas (syngas) plant. The two main markets for turbo expanders are hydrocarbon processing and air separation plants. High demand for turbo expanders is attributed to year-on-year growth in natural gas and LNG production. Turbo expanders constitute a highly preferred option in cryogenic plants for the extraction and recovery of butane, ethane, and propane. The rise in industrialisation activities, followed by concerns regarding energy security through recovery of energy through various routes, is expected to push the demand for turbo expanders.
High Market Opportunity Abound in Asia Pacific; Other Developing Economies Also Reflect a Promising Market Outlook
The global turbo expander industry is highly concentrated in China, Europe, and North America. Of these, North America is poised to lead the market in coming years, driven majorly by shale boom in the region. The US is expected to become the leading market for gas compressors in the oil and gas industry, followed by some other countries. Europe, and Asia-Pacific are currently the fastest growing markets for gas compressors in the oil and gas industry. Increase in natural gas production and rise in the usage of natural gas for power generation, as well as in other industry verticals, are the main factors fuelling the turbo expander market growth. Countries such as China, the Netherlands, and the North Sea present a decent market opportunity for gas compressors in the coming years.
Latin America, and Africa are also expected to capture a decent share of global demand in the near future; however, there are some factors restraining the oil and gas activity in these regions. Africa’s oil and gas industry has suffered a lot from various unfavourable social scenarios and political unrest. The situation however has improved recently. There was a problem of piracy as well but it has been handled well by the authorities and is now dwindled. Moreover, there is a tremendous improvement in security across different countries in the region, helping the companies to look into the region again, thus boosting the oil and gas industry. The key market for turbo expanders in oil and gas industry lies with the nations having a large number of oil and gas refineries, petrochemical plants, and LNG terminals (liquefaction & regasification).
Global Turbo Expander Market: Competitive Landscape
Atlas Copco was the first turbo expander manufacturer that successfully employed dry-gas seals in cryogenic applications. Besides, some of the other key players in the turbo expander market include Cryostar, GE, L.A. Turbine, WOODWARD INC, MAN Energy Solutions, Tibo, Hangyang Group, Sichuan Air Separation Plant Group, Air Liquide, and PBS Group, a. s. In November 2020, Cryostar installed its 1000th turbo expander in China. The installed turbo expander is now operational in an air separation unit (ASU) built by Hangzhou Oxygen Plant Group for Shenhua Yulin Energy Chemical.