The global natural gas liquids (NGL) market is fragmented in nature. Key players in the market are focusing on the development of cost effective operations and newer technologies in order to gain a lead over the competition. Pricing of natural gas plays a key role in making the market competitive, states Transparency Market Research (TMR) in its new study. Various laws and regulations are making it difficult for new entrants to establish their presence in the market. Other entry barriers faced by new players include the need for proper infrastructure and high expertise and capital-intensive nature of projects. The threat of substitutes is expected to be high in the global natural gas liquids market owing to the presence of external substitutes, which are cheaper in price.
According to the report, global natural gas liquid production stood at 7,982.6 Kilo barrels/Day in 2015 and is expected to reach 14,806.6 Kilo barrels/Day in 2024. On the basis of geography, the Middle East led in 2014 but North America is anticipated to take over and account for 39% of the market by 2024. By type, the ethane segment will lead; the production of ethane is projected to be 6,663.0 Kilo barrels/Day by 2024.
Utilization in Petrochemical and Fertilizer Industries Boosting Demand for Natural Gas Liquids
Natural gas liquid (ethane) is used for ethylene production, which is widely used for manufacturing plastics. As the plastics industry is growing consistently, the demand for ethane is also growing, thus benefitting the market. Ethane, along with other NGL such as propane, butane, and isobutene are increasingly being used as feedstock in the petrochemical industry and this is boosting the global natural gas market. Pentane, another NGL, is used as a blowing agent for polystyrene foam. Natural gas liquids are also widely used in the manufacture of fertilizers and olefins. The rising applications of propane as a green fuel in industrial, residential, commercial, chemicals, refinery, and transportation sectors will drive the market towards significant growth. Thus, the increasing utilization of NGL in various sectors is projected to drive the natural gas liquids market during the forecast period.
Substitution of Ethane by Naphtha to Pose a Threat to Natural Gas Liquids Market
Owing to the drop in the prices of crude oil, naphtha, a petroleum by-product, which is low in price, is increasingly being preferred as an alternative to ethane. This is a key challenge faced by players in the global natural gas liquids market. However, the cost of crude oil is expected to normalize in the coming years and this will create opportunities of growth in the market. In addition to this, natural gas producers and natural gas processing plant operators have started diverting their attention to natural gas liquids for increasing profitability and keeping business operations viable since NGL has higher demand and market price. This could boost the sales of natural gas liquids in the coming years.
This information is based on the findings of a report published by Transparency Market Research, titled “Natural Gas Liquid Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2016 - 2024.”
The global natural gas liquids market is segmented as follows:
- Normal Butane
- Pentanes Plus
- North America
- Asia Pacific
- Rest of Asia Pacific
- Middle East
- Saudi Arabia
- Rest of Middle East
- Rest of Africa
- Latin America
- Rest of Latin America
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