July 16, 2024

Rising global demand for clean energy projected to boost growth of the Liquefied Natural Gas Market

Liquefied natural gas or LNG is natural gas that has been cooled to liquid form for ease and safety of non-pressurized storage or transport. The volume of LNG is about 1/600 the volume of natural gas in the gaseous state at atmospheric pressure. This process involves cooling the natural gas liquefaction at approximately -162°C, at which temperature it takes up about 1/600th the volume of its gaseous state. The smaller volume enables cost-effective shipping of natural gas between countries worldwide. Main applications of LNG include electricity generation, space heating, vehicle fuel and industrial use. The demand for LNG is increasing all over the world owing to environmental regulations limiting emissions from coal and oil, growing need for cleaner resources and multiplying demand from transportation sector.

The global Liquefied Natural Gas Market is estimated to be valued at US$ 8.8 Bn in 2023 and is expected to exhibit a CAGR of 9.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One of the key trends in the LNG market is increasing adoption as a marine fuel. LNG produces very low emissions of sulphur and particulate matter and can meet stringent emission regulations imposed on marine vessels. Shipping companies are increasingly opting for LNG powered vessels and retrofitting older ships to use LNG. China has set targets to increase LNG use in shipping significantly. Rapid capacity additions in North America and Russia along with new projects in countries like Mozambique and Tanzania are leading to ample supply of LNG in the global market. Expanding LNG infrastructure like ports, pipelines and carriers will further support the growing use of LNG. Partnerships between countries for joint development of gas assets and distribution networks will continue shaping trade dynamics in the LNG industry over the coming years.

Porter’s Analysis

  • Threat of new entrants: The threat of new entrants is moderate as building Liquefied Natural Gas infrastructure requires huge investments. However, abundant natural gas reserves offer opportunities.
  • Bargaining power of buyers: The bargaining power of buyers is high as LNG is commodity which allows buyers to choose suppliers based on competitive prices.
  • Bargaining power of suppliers: A few countries dominate global LNG supply chain giving high bargaining power to suppliers to control pricing and supply.
  • Threat of new substitutes: The threat of new substitutes is low as LNG faces limited competition from alternate fuels in applications such as electric power generation and transportation.
  • Competitive rivalry: The competitive rivalry is high among existing players to gain market share by expanding capacities and supplying at competitive prices in price-sensitive Asia Pacific region.

Key Takeaways

The global Liquefied Natural Gas market is expected to witness high growth, exhibiting CAGR of 9.0% over the forecast period, due to increasing demand for clean energy supply. The market size for 2023 is US$ 8.8 Bn.

The Asia Pacific region dominates the global LNG market with over 60% share, led by China, Japan and India. Strong government support for gas-based economy along with rising industrialization and urbanization is driving the regional market.

Key players operating in the LNG market are Asahi Kasei Corporation, Ascend Performance Materials, BASF SE, Invista, Lanxess Ag, PetroChina Liaoyang Petrochemical, Radici Group, Rhodia, Shandong Haili Chemical Industry Company Ltd., and Shandong Hongye Chemical Company, Ltd. Key players are expanding their production capacities and supplying LNG to emerge as major suppliers to meet the growing demand.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it