Globally, the demand for natural gas liquids (NGL) has been rising in response to their increasing use in petrochemical applications. NGLs such as butane, ethane, propane, and isobutene are used as feedstocks in the petrochemical industry. This has proven crucial in boosting prospects for the sale of natural gas liquids globally. Despite the decreasing cost of natural gas, Transparency Market Research (TMR) projects the cost of natural gas liquids market to remain comparatively higher through the forecast period from 2016 to 2024.
On the flip side, the natural gas liquids market faces challenge from the declining prices of crude oil, due to which naphtha, a petroleum by-product, is replacing ethane in petrochemical applications. However, the price of crude oil is expected to normalize in the next few years, thus boosting prospects for natural gas liquids. During the same time, prices of natural gas are likely to fall. This declining trend of natural gas prices is likely to continue through the forecast period between 2016 and 2024. Lower price of natural gas as a result of weak demand, will in turn bolster sales of natural gas liquids.
Transparency Market Research forecasts the global natural gas liquids market to expand at a CAGR of 7.16% by volume between 2016 and 2024. In 2015, the market stood at 7,982.63 kilo barrels/day and is expected to reach 14,806.59 kilo barrels/day by the end of 2024.
Industrialization in Middle East and Shale Gas Boom in U.S. to Bolster Opportunities for Natural Gas Liquids Market
Regionally, North America and the Middle East emerged as the most attractive markets for natural gas liquid in 2015. While the Middle East held the largest share in the overall market in 2015, North America is poised to surge at the fastest CAGR during the forecast period. The Middle East presently accounts for 40% of the proven natural gas reserves globally. The rapid industrialization witnessed in Saudi Arabia, Qatar, Iran, and the UAE has proven quite benefitting for the prospects of the natural gas liquids market in the region. Among these countries, Qatar held the distinction as the highest producer of natural gas liquids in the Middle East in 2014. The Middle East NGL market stood at 2,909.2 kilo barrels/day in 2014 and is expected to reach 5,468.9 kilo barrels/day by the end of 2024.
In North America, the U.S. and Canada emerged as the largest producers of natural gas liquids in 2014. The U.S. is presently witnessing shale gas boom due to which the production of natural gas has significantly increased in the country. Residential heating and petrochemical industries have emerged as the key application segments of natural gas liquid in the U.S. In Canada, sale and production of natural gas liquids are encouraged by the presence of established infrastructure.
Asia Pacific is also constantly increasing in its production and processing capacity of natural gas. Some of the leading markets for natural gas liquids in Asia Pacific include India, Australia, China, and Indonesia.
Some of the leading companies operating in the global natural gas liquids market include Exxon Mobil Corporation, Chesapeake Energy Corporation, BP Plc, Range Resources Corporation, Royal Dutch Shell Plc., and others.