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Propane Market

Propane Market

Propane Market - Global Industry Assessment & Forecast

Number Of Pages # Pages:

210

Base Year:

2023

Date

Apr - 2024

Format:

PDF XLS PPT

Report Code:

VMR-VMR-2021-0783

Segments Covered
  • By Grade By Grade HD-5, HD-10, Commercial
  • By End-user By End-user Residential, Commercial, Industrial, Chemicals and Refineries, Transportation, Agriculture
  • By Region By Region North America, Europe, Asia Pacific, Latin America, Middle East & Africa
Snapshot
Base YearBase Year: 2023
Forecast YearsForecast Years: 2024 - 2032
Historical YearsHistorical Years: 2018 - 2022
Revenue 2023Revenue 2023: USD 94.6 Billion
Revenue 2032Revenue 2032: USD 145.5 Billion
Revenue CAGRRevenue CAGR (2024 - 2032): 4.9%
Fastest Growing Region Fastest Growing Region (2024 - 2032) Europe
Largest Region Largest Region (2023): Asia Pacific
Customization Offered
  • Cross-segment Market Size and Analysis for Mentioned Segments Cross-segment Market Size and Analysis for Mentioned Segments
  • Additional Company Profiles (Upto 5 With No Cost) Additional Company Profiles (Upto 5 With No Cost)
  • Additional Countries (Apart From Mentioned Countries) Additional Countries (Apart From Mentioned Countries)
  • Country/Region-specific Report Country/Region-specific Report
  • Go To Market Strategy Go To Market Strategy
  • Region Specific Market Dynamics Region Specific Market Dynamics
  • Region Level Market Share Region Level Market Share
  • Import Export Analysis Import Export Analysis
  • Production Analysis Production Analysis
  • Other Others Request Customization Speak To Analyst
Propane Market Share

The global Propane Market is valued at USD 94.6 Billion in 2023 and is projected to reach a value of USD 145.5 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 4.9% between 2024 and 2032.

Key Highlights of Propane Market

  • The market was mainly led by the Asia Pacific region in 2023, accounting for 51.5% of the total market share
  • Europe contributed more than 30.4% of the total revenue in 2023
  • The Residential segment significantly contributed to the market’s expansion, constituting over 49.2% of the overall revenue share in 2023
  • The HD-5 Propane segment took the lead in the market in 2023
  • Consumer-grade Propane, or HD-5, is the predominant grade of Propane distributed and sold across the United States. Typically comprising at least 90% Propane, HD-5 includes propylene, butane, and other gases constituting 10%. Conversely, commercial-grade Propane and HD-10 Propane, utilized mainly in industrial operations, contain lower Propane content compared to consumer-grade Propane
  • In 2023, about 80% of the Propane supply in the United States originated from natural gas processing plants, where natural gas liquids (NGLs) undergo extraction from the raw natural gas stream to yield pipeline-quality gas
  • Due to the oil and gas production expansion within the United States in recent years, the country now generates a considerably higher volume of Propane than it utilizes domestically. As a result, U.S. Propane exports closely align in quantity with domestic consumption levels

Propane Market Size, 2023 To 2032 (USD Billion)

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Propane Market: Regional Overview

The Asia Pacific Propane market showed significant dominance in 2023, with 51.5% of revenue share. The Asia Pacific Propane market has witnessed robust growth in recent years, driven by several factors. Increased energy consumption, particularly for residential, commercial, and industrial segments, is a result of the region's growth. Propane is an attractive choice for a variety of applications, from cooking & heating to industrial processes and transport, due to its flexibility, affordability, and slightly lower emissions. In addition, the expansion of the Propane market in this region is supported by government initiatives promoting cleaner fuels and diversifying energy sources. Propane is an effective alternative in countries with limited access to natural gas infrastructure and has been adopted even by remote regions. In addition, the transition towards cleaner fuels has been stimulated by growing environmental awareness and concerns about air quality, leading to increased demand for Propane.

U.S. Propane Market Overview

The Propane market in the United States, with a valuation of USD 26.6 Billion in 2023, is projected to reach around USD 41.2 Billion by 2032. This forecast indicates a substantial Compound Annual Growth Rate (CAGR) of 5% from 2024 to 2032. Propane comprises roughly 1% of the overall energy consumption in the United States. Its primary uses include residential and commercial heating, industrial functions such as chemical and plastics production, and agricultural applications such as grain drying and providing warmth to livestock and greenhouses during winter. Additionally, Propane finds smaller-scale applications in cooking, power generation, and transportation. Approximately 6.0 million homes across the U.S., predominantly in the Midwest and Northeast regions, rely on Propane as their primary heating source, emphasizing the crucial need for a consistent and dependable Propane supply during the winter months.

U.S. Propane Market

The global Propane market can be categorized as Grade, End-user, and Region.

Parameter Details
Segments Covered

By Grade

  • HD-5
  • HD-10
  • Commercial

By End-user

  • Residential
  • Commercial
  • Industrial
  • Chemicals and Refineries
  • Transportation
  • Agriculture

By Region

  • North America
    • U.S.
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa

Regions & Countries Covered
  • North America - (U.S., Canada, Mexico)
  • Europe - (U.K., France, Germany, Italy, Spain, Rest Of Europe)
  • Asia Pacific - (China, Japan, India, South Korea, South East Asia, Rest Of Asia Pacific)
  • Latin America - (Brazil, Argentina, Rest Of Latin America)
  • Middle East & Africa - (GCC Countries, South Africa, Rest Of Middle East & Africa)
Companies Covered
  • Chevron Corporation
  • BP p.l.c.
  • Exxon Mobil Corporation
  • TotalEnergies SE
  • Royal Dutch Shell Plc
  • Reliance Propane & Fuel Oil
  • CHS Inc.
  • Eni S.p.A.
  • Ferrellgas Partners L.P.
  • Marsh L.P. Gas Co. Inc.
Report Coverage Market growth drivers, restraints, opportunities, Porter’s five forces analysis, PEST analysis, value chain analysis, regulatory landscape, technology landscape, patent analysis, market attractiveness analysis by segments and North America, company market share analysis, and COVID-19 impact analysis
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Propane Market: Grade Overview

In 2023, substantial expansion was observed in the global Propane market within the HD-5 category. The Grade segment is separated into HD-5, HD-10, and Commercial. The HD-5 segment in the global Propane market has grown significantly in recent years. HD-5 Propane is a high-purity grade Propane with negligible impurities, making it suitable for many industrial and residential applications. The increasing demand for clean-burning fuels in residential heating and cooking applications has propelled the demand for HD-5 Propane. Additionally, industrial applications such as metal cutting, brazing, and soldering utilize HD-5 Propane due to its high efficiency and low emissions.

Propane Market: End-user Overview

In 2023, the global Propane market experienced significant growth, with a 49.2% share in the Residential segment. The End-user segment is categorized into Residential, Commercial, Industrial, Chemicals and Refineries, Transportation, and Agriculture. The residential segment of the global Propane market has experienced notable growth driven by several key factors. Propane's versatility as a clean, efficient, and reliable energy source has made it increasingly popular for residential applications such as heating, cooking, hot water systems, and backup generators. In addition, the attractiveness of Propane appliances and equipment to homeowners seeking energy-efficient solutions is enhanced by technological advances, including high-efficiency furnaces, tankless water heaters, and cooking surfaces.

Key Trends

  1. Propane is the preferred heating fuel in residential areas, especially regions lacking natural gas infrastructure. In colder climates, the demand for Propane is expected to increase.
  2. Propane is increasingly used as an alternative fuel for vehicles in conjunction with other Liquefied Petroleum Gases. Adopting Liquefied Petroleum Gas in transport fleets and private vehicles is driven by environmental benefits such as reduced emissions compared to traditional gasoline and diesel.
  3. Propane is a feedstock for the production of petrochemicals, including propylene, which is utilized in manufacturing several plastics and chemicals. Due to its cost competitiveness and availability, the use of Propane as a feedstock has witnessed a substantial shift with the growing demand for petrochemical products worldwide.
  4. Renewable Propane, produced from renewable sources such as biomass or through the conversion of waste streams, is becoming more popular. The demand for renewable Propane is expected to increase because of environmental regulations and corporate sustainability goals as sustainability becomes an important issue for businesses and governments.
  5. To support the growth of the global Propane market, continued investment is being made in infrastructure for storing, transporting, and distributing Propane. Infrastructure development initiatives, including storage terminals, pipelines, and transportation fleets, are crucial for ensuring supply reliability and meeting growing demand.
  6. The dynamics of the Propane market are influenced by legal frameworks and policy changes, e.g., energy policies, emissions regulations, or tax incentives. The consumption patterns and market opportunities for Propane may be influenced by government policies aiming to promote clean fuels and energy security and reduce greenhouse gas emissions.

Premium Insights

Safety regulations and standards influence the adoption of Propane vehicles. Similar to conventional vehicles, Propane vehicles must adhere to all relevant regulations, including Federal Motor Vehicle Safety Standards (FMVSS). However, Propane exhibits a higher autoignition temperature than gasoline and diesel, requiring significantly more heat for ignition without a flame or spark. Propane tanks boast 20 times more puncture resistance than gasoline tanks and are equipped with pressure relief devices to safely release fuel during overfilling, heat expansion, or fire. The National Fire Protection Association, the U.S. Department of Transportation, and other entities offer safety guidelines for Propane vehicles and fueling equipment. These organizations provide a comprehensive list of codes and standards accessible through resources such as the Alternative Fuels Data Center (AFDC), while the Propane Education & Research Council (PERC) offers training on vehicle maintenance and fuel dispensing.

Report Coverage & Deliverables

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  • Real-Time Data Updates:
  • Competitor Benchmarking
  • Market Trends Heatmap
  • Custom Research Queries
  • Market Sentiment Analysis
  • Demographic and Geographic Insights

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Market Dynamics

Propane's versatility and environmental benefits drive the global market growth. Propane has a high octane rating, making it a favorable option for spark-ignited internal combustion engines. In the event of a spill or release from a vehicle, it poses no risk to soil, surface water, or groundwater. This gas is primarily a byproduct of natural gas processing and crude oil refining, contributing approximately 2% to the total energy consumption in the United States, with less than 3% allocated to transportation. Moreover, its primary applications include residential heating, cooking, refrigeration, clothes drying, and powering agricultural and industrial machinery. Additionally, the chemical industry utilizes Propane as a key ingredient in manufacturing plastics and various compounds.

The cost-effective infrastructure solutions propel the Propane market expansion. The cost of establishing Propane infrastructure can vary, with estimates as low as $40,000, depending on the size and quantity of storage tanks and dispensers, existing infrastructure availability (e.g., electricity lines), and payment system requirements. However, local Propane suppliers often offer customers new fueling infrastructure at minimal or no expense under a fuel supply agreement. It's imperative to adhere to local regulations and standards during infrastructure development, with early engagement of the local authority having jurisdiction (AHJ) being crucial.

Competitive Landscape

The competitive landscape of the Propane market is characterized by intense rivalry among key players vying for market share. Major companies are involved in strategies such as mergers, acquisitions, and partnerships to expand their geographic presence and product portfolios. For instance, KBR and ExxonMobil will collaborate to significantly enhance Propane dehydrogenation technology. In this partnership, ExxonMobil's innovative catalyst technology will be integrated with KBR's exclusive K-PRO℠ Propane Dehydrogenation technology to convert Propane into propylene. Additionally, market leaders focus on sustainability initiatives and customer-centric approaches to maintain their competitive edge in this dynamic and evolving market.

Recent Market Developments

  • In March 2024, TotalEnergies declared the resumption of production at the Tyra hub in the Danish North Sea following a significant redevelopment effort. Upon reaching total capacity, the Tyra hub will generate 5.7 million cubic meters of gas and 22,000 barrels of condensate per day, restoring Denmark's self-sufficiency and positioning it once again as a net exporter of natural gas.
  • In February 2024, ADNOC and BP announced their collaboration to establish a new joint venture (JV) in Egypt. This JV, with BP owning 51% and ADNOC 49%, will leverage the partners' extensive technical expertise and successful track records to develop a competitive gas portfolio.
  • In December 2023, CHS expanded its Propane infrastructure in the western region with a new terminal in Colorado. This strategic location aims to assist Propane marketers in eastern Colorado, western Nebraska, and western Kansas, alleviating the need for extended journeys to the Conway Propane hub in Kansas.
  • In September 2023, ExxonMobil revealed the start of operations for two new chemical production units at its Baytown, Texas facility. This $2 billion expansion aligns with ExxonMobil's overarching strategy to enhance value-added product output from its U.S. Gulf Coast refining & chemical facilities.

FAQ
Frequently Asked Question
  • The global Propane valued at USD 94.6 Billion in 2023 and is expected to reach USD 145.5 Billion in 2032 growing at a CAGR of 4.9%.

  • The prominent players in the market are Chevron Corporation, BP p.l.c., Exxon Mobil Corporation, TotalEnergies SE, Royal Dutch Shell Plc, Reliance Propane & Fuel Oil, CHS Inc., Eni S.p.A., Ferrellgas Partners L.P., Marsh L.P. Gas Co. Inc..

  • The market is project to grow at a CAGR of 4.9% between 2024 and 2032.

  • The driving factors of the Propane include

  • Asia Pacific was the leading regional segment of the Propane in 2023.