LPG Market Size, Share & Trends Analysis Report By Source (Refinery, Associated Gas, Non-associated Gas), By Application, By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global liquefied petroleum gas market size to be valued at USD 164.36 billion by 2027 and is expected to grow at a compound annual growth rate (CAGR) of 4.4% during the forecast period. Growing awareness regarding benefits related to the usage of liquefied petroleum gas (LPG) as an alternative to the fossil fuels and rise in the adoption level of clean and green energy sources across both developed and developing countries are some of the factors likely to boost the market growth. Additionally, technological aspects, coupled with the growing number of initiatives taken by the government to educate the rural people to substitute LPG with the traditional cooking fuels, such as kerosene, wood, and coal, are likely to play a vital role in the growth of the market. However, the growing population and an increase in demand for liquefied petroleum gas as vehicle emission gas are likely to boost the growth of the market.

Besides, the high cost of installation related to liquefaction process equipment and technology may affect the demand and can confine the growth of the market during the projected timeframe. Rise in government initiatives across countries, such as India, Indonesia, and China, to inspire liquefied petroleum gas applications on account of its prolonged benefits as a cooking fuel is anticipated to boost the market growth over the upcoming years.

In the United Kingdom, LPG is gradually being considered a striking option for commercial assets joined with low-carbon and renewable technologies to assimilate a consistent year with round the clock electricity supply with carbon savings. Improving R&D in the liquefied petroleum gas industry is projected to propel the market growth over the upcoming years.

LPG has emerged as one of the key fuel sources in the commercial and residential segments for heating and cooking applications substituting the conventional fuel sources, such as wood and coal. However, it could be ascribed to the many benefits such as easy accessibility, non-toxic, clean, convenient, portable, and cost-efficient as compared to other fuels, such as wood and coal. The surge in the population across regions like Africa, Asia Pacific, and Central and South America is projected to fuel up the demand during the projected timeframe as the residents in the subsequent regions use LPG as cooking fuel. For instance, in India, over 60%-75% of household works are done by using liquefied petroleum gas, i.e. for heating and cooking.

The abrupt onset of the COVID-19 pandemic caused a decrease in demand for liquefied petroleum gas in the commercial sector. There has been an increase in demand owing to the rise in consumption of liquefied petroleum gas for household cooking purposes due to situations like lockdown. The usage of liquefied petroleum gas across the industrial, commercial, and transportation sectors is projected to create demand across the regions in the future. Numerous market players are now expected to pursue opportunities in the traditional markets and cater to the demand for LPG across the regions. As the demand for LPG continued to deteriorate in Europe owing to the COVID-19 outburst, in April 2020, Russia’s largest petrochemical company, Sibur capitalized on the prospect to enter into a new market by delivering two cargoes of LPG to India.

LPG Market Trends

The global expansion of infrastructure is one of the key factors driving the market for LPG. Furthermore, growing public awareness of the benefits of using LPG as a viable alternative to fossil fuels contributes to a positive market outlook. In line with this, the market growth is being driven by the significant change in the automotive industry. LPG is a low-carbon, clean energy source widely used as an autogas. It is kept in pressurized cylindrical containers and is used in agriculture, hospitality, construction, and sailing. Furthermore, natural gas extraction and refining technology advancements are driving the market forward.

LPG has emerged as a critical fuel source in the commercial and residential sectors for heating and cooking applications, replacing traditional fuel sources like wood and coal. However, it is attributed to the numerous advantages such as easy accessibility, non-toxicity, cleanliness, convenience, portability, and cost-effectiveness, owing to these properties when compared to other fuels, the global LPG market is on the uptrend.

The most significant limitation affecting the market is the product's flammability. As a result, it is retained in high-pressure cylindrical or spherical vessels. Furthermore, the flammability of the gas increases the costs of storage, transportation, and distribution to end-users. Another factor weighing on the market is oil feedstock price fluctuations, negatively affecting the industry growth.

The global market is expanding the supply for LPG from different operations. Moreover, the implementation of strict regulations against environmental pollution is a significant factor driving the market growth. The government initiatives encouraging the use of LPG over conventional fuels and an increase in the use of gas in vehicles are expected to provide lucrative growth opportunities for the LPG industry.

Source Insights

Based on the source, the non-associated gas source segment accounted for 53.9% share in terms of revenue in 2019. The source segment is segregated into the refinery, associated gas, and non-associated gas. The sources of the fuel differ from area to area, for example, in North America, the majority of the gas production is basically from natural gas processing units. However, Asia Pacific is reliant on its refineries for production. On a global scale, refineries are one of the primary sources of production of numerous gases. Escalating refining capacity, specifically in Saudi Arabia, Brazil, India, and China, is projected to surge product supply over the upcoming years.

In Asia Pacific, liquefied petroleum gas demand from associated gas was 18.92 million tons in 2019. Non-associated sources accounted for a noteworthy revenue share and are projected to witness significant growth over the projected period. The United States shale gas boom has occurred as a major drift, resulting in excess in the global industry. The market has also witnessed substantial field developments in oil and gas wells, coupled with growing on-site processing facilities, mainly in Russia, China, the U.S., and Canada.

Application Insights

Based on the application, the others segment accounted for the largest share of 49.8% in terms of volume in 2019. The application segment is sub-divided into residential/commercial, chemical, industrial, autogas, refinery, and others. The chemical application segment is expected to witness the fastest growth in terms of revenue over the forecast period. Extensive dependency on liquefied petroleum gas as a cooking fuel can be witnessed among the urban and rural residents across the regions, such as the Asia Pacific and Central and South America.

The commercial and residential application segment accounted for a substantial share in the LPG market in 2019. Promising government subsidies and initiatives to endorse the product as the major substitute for conventional fuels, such as wood and coal, have been the key factors contributing to the segment growth. Liquefied petroleum gas is also replacing chlorofluorocarbon and hydrofluorocarbon as a refrigerant owing to a nominal contribution towards depletion in the ozone layer. This has led to amplified application opportunities in the commercial/residential segment in ventilating and heating applications in addition to the cooking uses. The sector is likely to witness significant growth over the upcoming years to influence a net global industry worth exceeding USD 6.81 million by 2027.

Autogas is projected to witness substantial growth in the near future owing to increasing alternative fuel demand in the transportation sector to minimize environmental concerns, such as carbon emission levels and pollution levels. In addition, it is one of the cheapest energy sources, which is making it suitable for diesel and gasoline in the global transportation industry. The segment is anticipated to expand at a CAGR of 4.7% from 2020 to 2027 in terms of revenue in Germany.

Regional Insights

Europe held the largest volume share of 78.5% in 2019. In Europe, LPG demand in residential/commercial applications is expected to witness significant growth from 2020 to 2027. Numerous summit meetings such as COP21 are taken into consideration by many countries to decrease carbon emissions in the atmosphere. For instance, India is taking up initiatives to use other cooking fuels for cooking purposes.

Mature economies of Europe and North America are anticipated to witness significant growth in the years to come owing to growing awareness regarding the reduction of carbon emission. In Europe, Germany is expected to expand at a CAGR of 4.0% in terms of revenue.

The Asia Pacific accounted for a significant share in 2019. Population growth, ample resource availability, and high energy necessities, coupled with easy affordability, owing to the existence of government subsidies on LPG cylinders have been the key factors fueling the regional market growth. This is further maintained by the increasing petrochemical capacities across India, China, India, Thailand, and South Korea.

India emerged as a prominent importer of liquefied petroleum gas in 2019, taking consignments at a steady rate from the United States and Middle East regions to fund domestic fuel usage. Prime Minister Narendra Modi announced that India had met its target to provide 80 million free cooking gas connections to the residents of India and 2020 demand will fulcrum on the capability of the government to sustain the market at low marketing prices. To that end, an entry of investment in liquefied petroleum gas receiving distribution pipelines (over 14 million mt/year) and terminals (over 12 million mt/year) will support LPG usage in India.

Key Companies & Market Share Insights

The global industry has been characterized by high competition owing to the presence of major manufacturers and distributors, along with numerous multinational corporations. The global market is likely to attract a large number of regional players over the estimated period. The majority of the market players have been focusing on expanding their autogas capabilities owing to the rapidly growing fleet count, mostly in Europe and the Asia Pacific. Some of the other initiatives undertaken by the players are long-term partnerships with auto-OEMs and distributors for supportable supply over the next few years.

Recent Developments

• In April 2022, JGC Holdings Corporation announced the signing of an agreement with KBR Inc. for an ammonia manufacturing process. Under the terms of the deal, JGC Group will be able to use KBR's ammonia manufacturing plant engineering, procurement, and construction (EPC) projects beginning with the conceptual stage.

• In March 2021, Total Oil India Private Ltd. (a Total SE subsidiary) introduced a new LPG cutting gas product specifically designed for the metal-cutting industry. The product will be manufactured at Total's LPG facilities in Bangalore, Namakkal, and Maduranthakam. This product launch has expanded the company's product portfolio.

Some of the prominent players in the liquefied petroleum gas market include:

• Repsol

• China Gas Holdings Ltd

• Saudi Arabian Oil Co.

• FLAGA Gmbh

• Kleenheat

• Bharat Petroleum Corporation Limited

• JGC HOLDINGS CORPORATION

• Phillips 66 Company

• Chevron Corporation

• Reliance Industries Limited

• Exxon Mobil Corporation

• Total

• Royal Dutch Shell

• Petroliam Nasional Berhad (PETRONAS)

• PetroChina Company Limited

• Petredec Pte Limited

• Qatargas Operating Company Limited

• Petrofac Limited

• Vitol

• China Petroleum & Chemical Corporation

• BP Plc.

LPG Market Report Scope

Global LPG Market Segmentation

This report forecasts volume and revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global liquefied petroleum gas market report on the basis of source, application, and region:

• Source Outlook (Volume, Million Tons; Revenue, USD Billion, 2016 - 2027)

  • Refinery

  • Associated Gas

  • Non-associated Gas

• Application Outlook (Volume, Million Tons; Revenue, USD Billion, 2016 - 2027)

  • Residential/Commercial

  • Chemical

  • Industrial

  • Autogas

  • Refinery

  • Others

• Regional Outlook (Volume, Million Tons; Revenue, USD Billion, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • The U.K.

    • France

    • Italy

    • Russia

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

    • South Korea

  • Central and South America

    • Brazil

  • The Middle East and Africa

    • Saudi Arabia

    • South Africa