Small-Scale LNG Market

[115 Pages Report] The Global Small-Scale LNG Market is projected to grow from 30.8 MTPA in 2016 to 48.3 MTPA by 2022, at a CAGR of 6.7% between 2017 and 2022. The small-scale LNG market across the globe is driven by their increasing LNG demand from remote locations by applications, such as industrial & power, and the ability to transport LNG over long distances without the need for heavy investment such as pipelines. By terminal type, regasification terminal is expected to grow at a highest CAGR between 2017 and 2022. The increasing demand for LNG from the remote locations and global commoditization of LNG are some of the major factors that are driving the demand for small-scale LNG in this segment.

Market Dynamics

Drivers

• Energy cost advantage of LNG over alternate energy sources for end users
• Environmental benefits
• Fiscal regime and subsidies

Restraints

• Limited receiving terminal infrastructure in Asia-Pacific

Opportunities

• LNG as fuel in transport and power generation applications
• Integration of new technologies

Challenges

• Expensive supply chain

Energy cost advantage of LNG over alternate energy sources for end-users

Heavy duty transport companies save approximately 30% on fuel costs on LNG-fueled trucks, compared to diesel fueled trucks, and produce 30% lower emissions. Air pollution from diesel engines is one of the biggest concerns, especially in areas that struggle to meet air-quality standards. On the other hand, natural gas causes complete combustion and fewer emissions than diesel. It is estimated that increasing environmental concerns from the utilization of diesel vehicles is likely to increase the adoption of green fuel technologies such as natural gas. In the case of electric power generation, natural gas engines below 150 KW are more cost effective than oil fueled engines.

Fuel cost is one of the major cost for road transportation, which is strongly subject to excise taxation. Typically, an LNG-fueled Volvo FM truck can travel up to 600 km with LNG. With an additional 150 litres of diesel, it can travel up to 1,000 km without refuelling. Thus, reducing the cost of travel. With additional LNG liquefaction capacity expected to come online in the next few years, an oversupply of LNG is expected, which will drive the price of LNG further lower. Considering all these factors, both developed and developing countries are undertaking feasibility studies to recognize the techno-economics of shifting their economies from diesel to natural gas. Therefore, the cheap price of small-scla LNG over others alterantive fuels will drive the growth during the forecast period.

The following are the major objectives of the study.

• To describe and forecast the small-scla LNG market, in terms of value, by terminal type, and application
• To describe and forecast the small-scla LNG market, in terms of value, by region–Asia Pacific (APAC), Europe, North America, and South America along with their respective countries
• To provide detailed information regarding major factors influencing market growth (drivers, restraints, opportunities, and challenges)
• To strategically analyze micromarkets with respect to individual growth trends, prospects, and contributions to the overall market
• To study the complete value chain of reed sensor
• To analyze opportunities in the market for stakeholders by identifying the high-growth segments of the reed sensor ecosystem
• To strategically profile key players and comprehensively analyze their market position in terms of ranking and core competencies, along with detailing competitive landscape for market leaders
• To analyze strategic approaches such as product launches, acquisitions, contracts, agreements, and partnerships in the reed sensor market

During this research study, major players operating in the small-scale LNG market in various regions have been identified, and their offerings, regional presence, and distribution channels have been analyzed through in-depth discussions. Top-down and bottom-up approaches have been used to determine the overall market size. Sizes of the other individual markets have been estimated using the percentage splits obtained through secondary sources such as Hoovers, Bloomberg BusinessWeek, and Factiva, along with primary respondents. The entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews with industry experts such as CEOs, VPs, directors, and marketing executives for key insights (both qualitative and quantitative) pertaining to the market. The figure below shows the breakdown of the primaries on the basis of the company type, designation, and region considered during the research study.

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Some of the major players operating in the small-scale LNG market are Linde AG (Germany), Wärtsilä (Finland), Honeywell International Inc(US), General Electric (US), ENGIE (France), IHI Corporation (Japan), Gazprom (Russia), Skangass AS (Norway), Sofregaz (France), Dresser-Rand (US), Prometheus Energy Company (US), PLUM ENERGY (US), Excelerate Energy. L. P. (US), and Cryostar SAS (France).

Major Market Developments

• In December 2016, SkanGas AS signed an agreement with Statoil ASA, an oil and gas company in Norway for the reloading of small-scale LNG at Klaipeda LNG Terminal in Lithuania
• In November 2016, Wärtsilä signed a Memorandum of Understanding (MoU) with ENGIE, a French multinational company to develop services and solutions in the small-scale LNG sector. The agreement includes LNG distribution in remote areas and islands, LNG for ships, small-scale LNG and bio-liquefaction, and LNG to power stations
• In October 2016, GAZPROM announced to develop a program for a small-scale LNG production, which includes a list of gas distribution stations and liquefaction technologies for LNG production. The program involves the construction of mobile LNG filling stations and cryogenic filling facilities.
• In June 2014, The Linde Group developed a small-scale LNG technology namely StarLNG™ for the integration into natural gas liquids (NGL) plants. Some of the benefits of this technology includes zero impact on the reliability of the NGL plant production and monetizing the stream of the residue gas through small-scale LNG.

Target Audience:

• Small-scale LNG producers
• Traders, distributors, and suppliers of small-scale LNG
•  LNG industry associations
•  Natural gas suppliers

 “The study answers several questions for the stakeholders, primarily which market segments to focus on in the next two to five years for prioritizing their efforts and investments.”

Scope of the Report

This research report categorizes the small-scale LNG market based on terminal type, application, and region.

Small-Scale LNG Market, by Terminal Type:

• Liquefaction Terminal
•  Regasification Terminal

Small-Scale LNG Market, by Application:

• Heavy-Duty Vehicles
• Marine Transport
• Industrial & Power

Small-Scale LNG Market, by Region:

• APAC
• Europe
• North America
• South America

The market has been further analyzed for the key countries in each of these regions.

Critical questions which the report answers

• What are new application areas which the small-scale LNG companies are exploring?
• Which are the key players in the market and how intense is the competition?

Available Customizations:

With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies. The following customization options are available for the report:

Application Analysis

• A product matrix, which gives a detailed analysis of various types of small-scale LNG used in various applications.

Regional Analysis

• A further breakdown of the regional small-scale LNG market to the country level

Company information

• Detailed analysis and profiling of additional market players (up to 5)

The Small-scale LNG market is projected to grow from 30.8 MTPA in 2016 to 48.3 MTPA by 2022, at a CAGR of 6.7% from 2017 to 2022. The increasing LNG demand from remote locations by applications, such as industrial & power, and the ability to transport LNG over long distances without the need for heavy investment such as pipelines are the key factor driving the growth of market of this market.

Small-scale LNG terminals are regarded as facilities, including liquefaction and regasification terminals, with a capacity of less than 1 million tons per annum (MTPA) within the scope of this study. It includes the LNG produced from small-scale liquefaction terminals and regasified at small-scale regasification terminals for catering to applications such as LNG-fueled heavy-duty transport, LNG-fueled ships, and industrial & power generation.

Based on terminal type, the small-scale LNG market has been segmented into liquefaction terminal and regasification terminal. The liquefaction terminal segment is expected to have the highest share in the small-scale LNG market in 2017, in terms of value. The growth of this segment can be attributed to their increasing demand for LNG from the remote locations and global commoditization of LNG.

Based on application, the small-scale LNG market has been segmented into heavy-duty vehicles, marine transport, and industrial & power. The heavy-duty vehicles segment is projected to lead the small-scale LNG market, in terms of value during the forecast period due to the increase in demand for small-scale LNG as fuel in heavy-duty vehicles as it is available in cheaper prices compare to other alternative. Furthermore, LNG is the most viable option for long-haul LNG-fueled trucks, globally. In the LNG-fueled heavy duty vehicles, the density of LNG can vary considerably over a range of saturation pressures and storage temperatures.

The small-scale LNG market has been studied for North America, Europe, APAC, and South America. The North America small-scale LNG market is projected to register the highest CAGR, in terms of value, during the forecast period. The growth of the small-scale LNG market in the region is primarily driven by industrial & power application. The APAC region accounted for largest share during the forecast period. The growth in this region is attributed to increasing demand for small-scale LNG, from applications, such as heavy-duty vehicles, industrial, & power.

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Industrial & Power to Drive The Small-Scale LNG Market

Heavy-duty Vehicles

Utilization of LNG-fueled heavy-duty vehicles can make the economics of natural gas utilization most favorable. LNG is the most viable option for long-haul LNG-fueled trucks, globally. In LNG-fueled heavy-duty vehicles, the density of LNG can considerably vary over a range of saturation pressures and storage temperatures. LNG vehicle fuel system delivers the natural gas to the engine at a required supply pressure while maximizing the fuel density at the vehicle tanks and the fueling station.

Marine Transport

LNG has a lower content of SOx, NOx, and CO2, than conventional marine fuel such as heavy fuel oil (HFO). This is important going forward as governments globally are implementing regulations for lowering emissions and setting up Emission Control Areas (ECA). For example, the North Sea ECA in Europe and the Gulf Coast ECA in North America. In the marine application, LNG is preferred to CNG even though LNG-fueledfueled ships require storage tanks up to twice the size of a conventional oil bunker. This is mainly because it is easier to handle liquid on board the vessel than high-pressure gas. In addition, in conventional LNG carriers, the boil off gas from the storage tanks is used as the fuel for the vessel.

The Industrial & Power

The industrial & power application includes off-grid power generation, typically of few hundred MW; industrial use such as steel and aluminum factories; district heating; high horsepower engines in the oil field; and mining. The decision to switch to LNG from fuel oil, diesel, petroleum, and liquefied petroleum gas (LPG) is highly correlated with the economics of alternating fuels. Natural gas has become one of the popular fuels for the generation of electricity owing to its clean burning nature.

Small-scale liquefied natural gas (LNG) systems and supply infrastructure are generally more expensive than those required for conventional liquefied natural gas (LNG) infrastructure due to the utilization of complex technologies and equipment in them.

Limited receiving terminal infrastructure in APAC is a major restraining factor for small-scale LNG. LNG consumers in Asia-Pacific have intermediate demand for LNG. However, there are no receiving terminal infrastructures, including loading arms, jetty, and storage, at present. Construction of these receiving terminal infrastructure is expected to involve huge capital investment. However, small-scale LNG vessels can dock beside any normal jetty and, subsequently, LNG can be discharge directly into LNG ISO containers or trucks. These LNG ISO containers or trucks can take LNG to end user’s site and discharge LNG. Some LNG receivers have inadequate space at their site for receiving LNG through truck as they are located in congested area where road network does not permit turnaround of trucks. Truck loading facility at the receiving terminal is a crucial part of small-scale LNG infrastructure as it plays a major role in delivering LNG to remote communities. Therefore, lack of truck loading facility at the receiving terminal can be one of the major restraints in the small-scale LNG market.

The Linde Group (Germany), Wärtsilä (Finland), Honeywell International Inc. (U.S.), General Electric (U.S.), and Engie (France), among others are the leading companies operating in the small-scale LNG market. These companies are expected to account for significant shares of the small-scale LNG market in the near future.  

Critical questions the report answers:

• Where will all these developments take the industry in the mid to long term?
• What are the upcoming industry applications for reed sensors?

To speak to our analyst for a discussion on the above findings, click Speak to Analyst