Liquefied Petroleum Gas Industry
The global liquefied petroleum gas (LPG) market was valued at USD 117.3 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 3.7% from 2023 to 2030. This growth is primarily driven by increasing awareness of the benefits of LPG as a substitute for traditional fossil fuels and the rising adoption of clean and renewable energy sources across both developed and developing nations. Governments have launched various initiatives to educate rural populations on the advantages of switching to LPG from traditional cooking fuels such as kerosene, wood, and coal, which is expected to significantly contribute to the market's growth. Furthermore, the expanding global population and the increasing demand for LPG as a vehicle emission gas are also likely to fuel market growth. However, the high cost associated with installing liquefaction process equipment and technology may pose challenges and limit demand during the forecast period.
Governments in countries like India, Indonesia, and China have been promoting the use of LPG, particularly as a cleaner and more efficient cooking fuel, which is anticipated to further drive market expansion in the coming years. In the United Kingdom, LPG is increasingly seen as a viable option for commercial properties, particularly when combined with low-carbon and renewable technologies, to provide year-round electricity with notable carbon savings. Additionally, advancements in research and development within the LPG industry are expected to further support the growth of the market over the forecast period.
Gather more insights about the market drivers, restrains and growth of the Liquefied Petroleum Gas Market
Source Insights
- In 2022, the non-associated gas source type contributed significantly to the liquefied petroleum gas (LPG) market, generating over USD 62.0 billion in revenue. The sources of LPG can vary widely across different geographical regions, highlighting the diversity of extraction methods and technological implementations. For example, in North America, the majority of LPG is sourced from natural gas processing units, which refine raw natural gas to separate the various hydrocarbons and produce market-ready LPG. In contrast, the Asia Pacific region relies heavily on its refining capabilities to produce LPG from crude oil. This variation in sourcing emphasizes the importance of local infrastructure and resource availability in shaping the LPG supply chain.
- On a global scale, refineries are recognized as one of the primary sources of LPG production. The refining capacity in key countries such as Saudi Arabia, Brazil, India, and China is expected to increase significantly in the coming years. This surge in refining capacity is projected to enhance product supply, enabling these countries to meet both domestic and international demand for LPG. The expansion of refining operations in these regions will likely play a critical role in stabilizing and increasing the overall availability of LPG in the global market.
- In the Asia Pacific region specifically, the demand for LPG derived from associated gas exceeded 17.0 million tons in 2022, reflecting a robust consumption trend driven by rising energy needs and a shift toward cleaner fuel sources. This demand is projected to increase significantly, potentially reaching over 23.0 million tons by 2030. This anticipated growth represents a compound annual growth rate (CAGR) of over 3.0% from 2023 to 2030. The importance of non-associated gas sources is highlighted by their noteworthy revenue share and the expectation that they will observe the fastest growth during the forecast period. This trend indicates a shift towards more sustainable and efficient energy practices in the region.
- The shale boom in the United States has emerged as a pivotal development in the LPG market, resulting in an oversupply situation. This boom has led to the exploration and extraction of significant amounts of natural gas, contributing to a surplus of LPG on the global market. Additionally, there have been substantial developments in oil and gas fields, with many companies investing in expanding on-site processing facilities. This trend is particularly evident in countries such as Russia, China, the United States, and Canada, where advancements in extraction technology and processing capabilities are driving production efficiencies. These developments are expected to further strengthen the global LPG supply chain, making LPG more readily available to meet the growing energy demands of various sectors.
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