Natural gas is one of the fastest growing energy forms and has been gaining market share significantly in the global energy basket. Due to its cleaner existence, natural gas has been rapidly catching up to crude oil as a fuel alternative, with the latter not feasible for producing clean energy. Natural gas is slowly evolving as the primary global fuel with increasing penetration in transportation and domestic application markets. By 2040, natural gas is expected to be on par with crude oil in the global energy landscape. However, depleting conventional natural gas reserves raise questions on its sustainable status, due to which there is an increased focus towards the use of unconventional gas sources such as CBM, shale gas and tight gas. Moreover, it is estimated that recoverable unconventional sources of gas including CBM are much larger than the conventional natural gas resources, with a substantial chuck still unexplored. Increasing exploration and extraction on a global scale is expected to drive CBM production over the next six years. Cost of producing one cubic meter of CBM by the means of vertical drilling is estimated to be approximately USD 0.11 globally. Drilling cost incurred accounts for the maximum share of it. Drilling cost is estimated to account for approximately 74.3% of the total cost for the production of one cubic meter of CBM gas. Electricity accounts for the next biggest segment sharing 8.1% of the total cost for producing CBM gas by the means of vertical drilling. Maintenance cost for machinery and equipments used for the production of CBM accounts for 6.8% of the total cost. Operational expenses shares approximately 5.4% of the total cost and other cost incurred for the production of CBM accounts for 5.4% of the cost. Global CBM (coal bed methane) market revenue is expected to reach USD 17.31 billion by 2020, growing at a CAGR of 5.9% from 2014 to 2020.
Power generation emerged as the leading application market for tight gas and accounted for 35.3% of total CBM produced globally in 2013. Power generation along with being the largest market is also expected to be the fastest growing application markets for CBM at an estimated CAGR of 8.5% from 2014 to 2020.
U.S. dominated CBM production, accounting for 61.8% of total CBM produced globally in 2013. Canada followed U.S. in the global market and accounted for 11.5% of total production in 2013. The growth of North American market is primarily driven by the growing demand for sustainable fuel in the country and in order to reduce reliance on conventional sources of natural gas However, Asia Pacific on account of growing drilling activities mainly in coal rich countries such as China, India, Indonesia and Australia is expected to be the fastest growing CBM market at an estimated CAGR of 14.9% from 2014 to 2020. Asia Pacific is one region where GDP growth rates due to growing disposable income of consumers is growing at rapid pace. Growing GDP is leading to growing demand for energy in the region. The growth of Asia Pacific energy is mainly driven by China, India and Indonesia. Along with being a large demand centre, Asia Pacific is also emerging as a large supply centre for unconventional gas resources including CBM. China, India and Indonesia contains huge amount of unproven reserves for CBM which in turn has been attracting companies to invest in Asia Pacific.
Major chunk of the global CBM market is captured by BG Group and Arrow Energy. The two companies together accounted for over half of the global market in 2013. There is stiff competition in the rest half of the market and is shared by companies such as Dart Energy, Santos, Origin Energy, Great Eastern Energy and PetroChina.
Key questions answered by the report
- What was the size of the CBM market in 2013; what are the expected growth trends and market forecast for 2014 to 2020
- Which companies were the leaders in 2013, what are the strategic initiatives taken by them
- What opportunities are available to these and other contenders in this space
- What are the barriers and opportunities in the CBM market
- Which were the top-performing applications segments in 2013? How will these segments perform in 2020
- Which were the top-performing regional markets in 2013? How will these markets perform in 2020