According to a new report from Grand View Research, Inc., the global LNG market is expected to reach 20.6 billion by 2025, growing at a CAGR of 12.7%.
Reasons given for this growth include:
- A rising focus on development and expanding gas pipeline infrastructure and growing demand for natural gas from downstream sectors.
- Decreasing LNG prices along with execution of favorable government rules and regulations.
- Insufficient channel infrastructure is supplementing demand for small scale projects to source natural gas for key consumers in remote areas, specifically in the power generation and industrial manufacturing verticals.
Other key findings:
- Power generation accounted for 46% of the volume share in 2016, and is anticipated to grow at over 6.9% CAGR from 2017 to 2025. Power generation plants are gradually shifting from naphtha-based feedstock towards LNG in order to provide cost-competitiveness and enhanced delivery times while also receiving support in the form of favorable regulations encouraging these trends.
- The global LNG market demand exceeded 265 million tons in 2016 and is expected to grow at a CAGR of 6.5% from 2017 to 2025.
- Transportation emerged as the largest application in 2016 and is estimated to generate revenue over $3.6 billion by 2025, due to widespread adoption of sustainable resources in place of conventional fuels.
- Prices in North America are expected to be dependent upon the Henry Hub model, while demand in South Africa is likely to continue being unpredictable on account of civil unrest and fluctuating supply dynamics.
- Europe is likely to witness moderate progress due to rising competition from Russia and Norwegian piped natural gas (PNG).
- Africa is expected to remain a rapidly developing market with new production strategies in Cameroon and development anticipated in Mozambique.
- Asia Pacific consumption patterns are projected to remain exponentially high over the next decade, due to various developments across emerging economies, especially in the power generation and transportation market. The region is expected to grow at a CAGR of 6.5% from 2016 to 2025.