The demand within the global natural gas liquids market is rising at a sturdy pace in recent times. In the contemporary scenario, use of hydrocarbons has gained momentum in several industries and sectors. The residential, commercial, and industrial sectors have emerged as important consumers of natural gas liquids. Domestic uses of these liquids have helped in driving sales across the global market. Furthermore, the humongous demand for hydrocarbons in industrial manufacturing has also created a plethora of opportunities for market maturity. Some of the common industries where natural gas liquids are used are plastics, detergent manufacturing, and anti-freeze agents. The next decade has witnessed the inflow of increased revenues over into the hydrocarbons industry.
The transportation sector has emerged as an important consumer of hydrocarbons in recent times. This factor has directly influenced the demand within the global natural gas liquids market in the years to follow. Blowing agents used for polystyrene foam have become an important industrial ingredient, and have helped in driving market demand and maturity.
Heating applications in the residential and commercial sectors involve the use of natural gas liquids. Blending of propane and gasoline is also an important chemical process that also necessitates the use of natural gas liquids. The total volume of natural gas liquids used in the industrial sector has increased in recent times.
Ethanol is extensively used for manufacturing personal care products such as perfumes and sprays. LPG cylinders experience increased demand in recent times, and this is an important dynamic of market growth. Blending vehicle fuel necessitates the use of new-age technologies. This factor has also generated fresh demand within the global natural gas liquids market. Gasoline and solvent manufacturing are other important areas of application for natural gas liquids. The revenue index of this market shall improve in the following years.
China’s Natural Gas Liquid Market Suffers as Coronavirus Halts Economic Activities
The onset of the coronavirus has paralyzed commodity supply chains in China due to cancelled shipments and delayed stocks that are now piling up. Short-term sales of natural gas liquid and crude oil in China have come to a halt, thus slowing down the economic activity of the region. On the other hand, buyers in China’s natural gas liquid market are concerned about legal actions that could be taken against them in case they honor purchase agreements. Moreover, spot crude trade has also reached a halt, thus affecting imports for independent refiners.
According to popular news outlets, sellers of crude oil and natural gas liquid managed to sell some cargoes for the month of April before the Chinese New Year. However, consecutively, all trade activities have been stopped. Chinese buyers are increasing efforts to invoke the force majeure clause on imports. However, producers state that they have not received any notices from buyers so far. In order to avoid damaging the relationship with sellers, Chinese buyers are resorting to divert or resell cargoes for the time being.
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Traders are expected to tap incremental opportunities in the U.S. natural gas liquid market after all economic activities are put to practice post the COVID-19 pandemic. The flourishing liquefied natural gas (LNG) industry of the U.S. is grabbing the attention of traders whilst North America is estimated to dictate the highest revenue among all regions in the market landscape. Hence, companies are increasing efforts to construct natural gas liquid plants in the U.S. that are capable of transforming global energy industries. Thus, under construction infrastructure projects worth billions of dollars are anticipated to create revenue streams for stakeholders.
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Companies in the U.S. natural gas liquid market are increasing their production capabilities to supply LNG to Europe and Western Europe. This explains why the global market is anticipated to reach an output of ~19,500 Thousand B/D by the end of 2027. However, complexities surrounding the market for natural gas liquid in the U.S. such as prevailing geopolitical uncertainty and increasing competition are likely to hamper market growth. Hence, companies are advancing in liquefying technologies by expanding their exports to Qatar and Australia.
Unprecedented Rise in LNG Production Fuel Transportation Innovations
Transport innovations are one of the most prominent trends revolutionizing the natural gas liquid market. As such, companies are increasing their focus in ship-to-ship operations to improve oil and gas transportation. For instance, Fluenta— a specialist in flow sensing and ultrasonic technology, revealed that container ship Wes Amelie received natural gas liquid fuel with the help of the innovative ship-to-ship technique, thus marking an important step in the global energy industry. Such innovations play an instrumental role in boosting market growth, which is estimated to progress at a modest CAGR of ~6%.
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Natural gas liquid is being highly publicized as low-carbon energy system, which is building the credibility of companies in the market landscape. Europe is anticipated to absorb most of the natural gas liquid supply from exporters, as users are switching from coal to gas in the power sector. As such, Europe is projected to dictate the third-highest revenue in the natural gas liquid market.
A modest rise in imports to Asia are benefitting traders in the natural gas liquid market, owing to rising electricity generation in Japan and South Korea. According to the U.S. Energy Information Administration, Australia, is predicted to emerge as one the largest global exporters of LNG in the coming years. Companies are initiating strategic ties with traders in Japan, China, and South Korea to generate revenue opportunities.