April 24, 2024
Propane Market

Propane Market Growth is projected to Driven by Rising Demand for Clean Energy Solutions

The global propane market overview: Propane, also known as liquefied petroleum gas (LPG), is a flammable gas used as fuel for transportation, indoor and outdoor heating, cooking and other applications. It is a by-product of natural gas processing and petroleum refining. Propane has higher energy density than natural gas, thus making it a suitable replacement for electricity, gasoline and diesel across various applications. Growing demand for clean and affordable energy as well as expanding infrastructure of LPG worldwide are major drivers of the propane industry.

Global Propane Market is estimated to be valued at US$ 113.48 Bn in 2024 and is expected to exhibit a CAGR of 14.% over the forecast period 2024 to 2031.

Key Takeaways

Key players: Key players operating in the Propane Market Demand are Chevron Corporation (U.S.), Royal Dutch Shell Plc (U.K.), Exxon Mobil Corporation (U.S.), ConocoPhillips (U.S), Reliance Industries Ltd. (India). These companies distribute and market propane globally and undertake strategic initiatives such as capacity expansion and mergers & acquisitions to strengthen their foothold.

Growing demand: Rapid industrialization and urbanization particularly in developing regions are fueling the demand for clean fuel in transport, power generation and other industrial applications. Propane is increasingly used as autogas for vehicles and backup power due to its cost-effectiveness and eco-friendly attributes compared to gasoline or diesel.

Global expansion: Major propane suppliers are investing heavily in infrastructure and distribution networks across emerging markets to cater to their rising energy needs. Developing Asia Pacific and Middle East regions are witnessing significant capacity additions of LPG terminals, pipelines and storage facilities to ensure secure supply of propane.

Market key trends

One of the major propane market trends is increasing production of shale gas. Technological advancements have unlocked large reserves of shale gas in North America which are a lucrative source of natural gas liquids including propane. Leading shale gas producers are expanding their facilities to capitalize on this opportunity. Further, stricter emission regulations, carbon pricing mechanisms and focus toward sustainable energy are augmenting the adoption of propane as clean burning fuel alternative across multiple industries globally.

Porter’s Analysis

Threat of new entrants: Low economies of scale and capital requirements

Bargaining power of buyers: Buyers have moderate bargaining power due to differentiated products

Bargaining power of suppliers: Suppliers have moderate bargaining power due to availability of substitutes

Threat of new substitutes: Presence of substitutes like natural gas and liquefied petroleum gas

Competitive rivalry: High due to presence of established players.

Geographical Regions

North America region currently holds the highest share in the global propane market in terms of value. Factors such as growing industrial sector and increasing applications in transportation sector are driving the market in this region.

Asia Pacific region is projected to witness the fastest growth during the forecast period. Rapid urbanization and industrialization along with the expansion of residential and commercial sectors are expected to boost the demand for propane in Asia Pacific. Countries like India, China, Japan, and South Korea are anticipated to offer numerous opportunities for market players in the coming years.

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