Propane

Global propane will increase significantly over the next five years. According to the WK-chem Research, “Global Propane Professional Survey Report 2024, Forecast to 2029”, worldwide increasing energy demand created high consumption in industrial and commercial end-use is a key growth driving factor for the industry. The compound annual growth rate (CAGR) for the 2024-2029 period is projected to be 4.71% base on WK-chem Research regression analysis model.


Analysts’ Viewpoint:
“Consumption of propane for residential heating and cooking purposes is also rising globally. Furthermore, substitution of fuels such as gasoline and fuel oil with propane is a cost-effective and viable step toward cleaner air. In chemical & refinery applications, propane is used an essential feedstock to manufacture various materials and compounds, especially plastic raw material. Increase in R&D activities in plastic, recycling, and petrochemical industries is expected to provide lucrative opportunities for market players”, said Dorothy Patel, Senior analyst, in WK-chem Research.

Market insight:
Propane appliances have significantly lower energy consumption and environmental impact than electric ones. Propane burns cleaner and generates more power than natural gas, fuel oil, diesel, and even electricity since it is a low-carbon fuel. Since there is a large domestic supply of propane, price is frequently lower and more steady than that of other fuels. Cost saving on energy bills when using appliances fueled by propane are steady, and governments of some countries offer financial incentives for adopting environmentally friendly alternative fuels like propane. Because propane does not damage soil or groundwater, propane tanks can be buried underground. In addition, since propane burns cleanly, furnaces and other equipment fueled by propane often require less maintenance. In the same length of time, propane water heaters may create twice as much hot water as electric ones. Compared to diesel, gasoline, or even electricity, propane emits fewer greenhouse gases. The amount of carbon dioxide in the atmosphere as well as other air pollutants like nitrogen oxide and carbon monoxide can be decreased by using propane instead of gasoline or fuel oil. The factors have driven the development of propane. The key market driver for the global propane market is increasing in demand for low emission sustainable fuel in the automotive and transportation sector. Burning propane produces less greenhouse gas emissions than other types of fuel. Propane is convenient & portable gas cylinders can be transported, refilled, and installed anywhere. It is also environment-friendly with very low sulfur content and zero lead content. It can be used for heating homes, fuelling backyard grills, healing balms and operation of farm equipment, to fuel fleet vehicles, to fuel hot air balloons and appliances.
The factor that is expected to inhibit the growth of the propane market is high installation and maintenance cost. Installation is done by the professionals which automatically increases the cost of installation. Propane gas is very flammable and if it is escaped in a narrow space, it can build up and explode if exposed to a spark or flame. This means propane lines must be very carefully inspected to ensure that they aren't leaking. Damaged propane tanks can also be an explosion risk, as their internal pressure could cause them to burst. However, a drawback of propane is possibility of propane poisoning, which can become a serious condition and have unwanted outcomes. The risk of propane poisoning increases if a person accidentally swallows or inhales it. If accidentally inhaled, propane can burn if exposed to a spark, which could be disastrous since carbon monoxide poisoning could follow. Propane needs to be delivered to homes where it will be piped inside. This implies that the user must store the propane tank safely in addition to waiting for a supply truck to arrive and fill it. If the person lives in a small space, this can get a little problematic. The delivery could also be an issue, particularly during the icy winter months when roads could be closed. Safety is another problem with propane.

Competition Landscape:
In October 2021, Suburban Propane Partners LP announced the extension of its 2020 agreement with U-Haul to provide eco-friendly and renewable propane in California. This WK-chem Research market report is designed to help clients improve their market position, and in line with this, this report provides a detailed analysis of several leading propane companies that include: AmeriGas Propane, Inc., DCC Plc, China Petroleum & Chemical Corporation (SINOPEC), Ferrell Gas, Saudi Arabian Oil co., Gazprom, Air Liquid, GAIL (India) Limited, Indian oil corporation Ltd, Suburban Propane, L.P., Lykins Energy solutions, Marsh L.P. Gas Co. Inc., Sparlings, and Thompson Gas.

Segmentation of Propane Market:
According to the type, the market for propane is divided into: Liquid and Gas. The liquid segment registered the highest market revenue. A flammable hydrocarbon gas that becomes liquefied under pressure, propane is frequently used as fuel for heating, cooking, providing hot water, and powering automobiles. In addition, petrochemical feedstock, propellants for aerosols, and refrigerants can all be produced from propane. Low pressures can be used to compress propane gas into a liquid. Typically, propane is kept in metal containers, ranging in size from small BBQ gas bottles to larger gas cylinders and LPG storage tanks, as a liquid. Home heating, cooking, hot water heaters, gas fireplaces, and clothes drying are among the frequent uses. Patio heaters, pool heaters, backup generators, and barbeque fuel are just a few uses for propane in daily home outdoor living. For others, it also refers to the fuel used in LPG cars and other vehicles. It also has applications as a propellant, refrigerant, motor fuel, and petrochemical feedstock.
According to the application, the market for propane is divided into: Residential, Transportation and Commercial. The residential segment registered the largest market share in terms of revenue. Air cooling, water heating, food preparation and storage, lighting, and fireplace fueling are among the major propane applications. Mobile homes and rural dwellings without access to natural gas typically utilize propane. Propane is used in millions of homes to supply some of their energy needs. Gas grills powered by propane are used to cook outdoors by fairly large number of families and people. In addition, propane-powered appliances are typically used in recreational RVs, providing portable energy source for refrigeration, hot water, and cooking. Propane is widely used for outdoor cooking, and campers and mobile homeowners especially prefer it owing to high portability. The number of residential space heating customers is expected to slowly increase due to increasing number of new residential buildings and ongoing fuel oil conversions that will counteract residential space heating losses to electricity and natural gas.

Propane Market: Regional Analysis
In terms of geography, the global propane market has been segmented into: North America, Asia Pacific, Europe, South America, and the Middle East and Africa. The propane gas is widely used for water heaters, air conditioners, pest controls, and generation of electricity in the US. The US is among the highest producer and exporter of propane gas all over the world. Recent growth in oil and natural gas processing from U.S. shale gas has increased the export capacity investment in the U.S. Gulf Coast region, which has made the U.S. become a net propane exporter to the global marketplace. The traditional markets for propane in Europe are the off-grid consumer for space heating and cooling. The economic and population growth are the major factor for the increase in demand for LPG in countries like China and India. The demand is primarily expected to arise from the industrial sector. GCC has also planned to explore new untraditional sources of feedstock for chemicals industry projects in Algeria and Nigeria for increasing petrochemical industries. GCC has also planned to explore new untraditional sources of feedstock for producing chemical.

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