The global propane market size is projected to reach US$ 107 billion by 2025, and register CAGR of 4.5% over the forecast period (2019 - 2027).
Propane is a flammable hydrocarbon gas that originates during the process of petroleum refining and natural gas processing. The gas is usually compressed into a liquid state at low pressure and stored in LPG (Liquid Petroleum Gas) tanks, gas cylinders, or steel cylinders. Propane finds primary application as a fuel for cooking, heating, in refrigeration, and automobiles. Propane is a colourless and odorless gas that belongs to a class of LP gases such as butane, propylene, isobutylene, and other mixtures. Owing to its low boiling point, it can be stored easily, which in turn makes it transportable and a popular substitute for natural gas for heating and generation of electricity. Furthermore, it can be used to electrify trucks, buses, motor boats, and trains due to its cost effectiveness, ability to provide more torque in heavy vehicles, and low fuel consumption.
Propane is garnering high demand from end use industries such as oil and gas, chemical, manufacturing, and automobile. According to the Propane Education & Research Council, after gasoline and diesel, propane is the third most commonly used fuel in vehicles across the globe. Moreover, over 180,000 vehicles on U.S. roads run on propane, and it powers over 440,000 forklifts. According to the same source, over 12 million vehicles around the world use propane. Due to its easy transportability, propane is widely used to provide off-the-grid refrigeration. Additionally, the U.S. Environmental Protection Agency approved propane as a replacement refrigerant owing to its mild impact on the environment compared to other refrigerants. Propane is also a key fuel for hot air balloons, and the main flammable gas in the soldering process.
Propane is a lot denser than natural gas, and tends to collect near the floor or other low spaces. Excessive inhalation of propane can cause hypoxia, and result in cardiac arrest. Furthermore, owing to its dense texture, propane can leak into enclosed areas and pose as a fire hazard. For propane to explode, it needs to collect in enclosed spaces, which makes it highly unsuitable for certain applications such as a fuel for powering boats. Such factors are expected to restrain its demand over the forecast period.
Asia Pacific is expected to be the fastest growing market and account for the largest market share, owing to rapid industrialization and increasing gross domestic product (GDP) of emerging economies such as India and China. Additionally, regions such as Latin America, Africa, and the Middle East are witnessing significant economic growth which is estimated to benefit the market in the regions. Recovery from the economic slump in Europe and North America is also expected to have a positive impact on the global propane market. The oil and gas industry in India, China, and Brazil is undergoing rapid expansion as a result of increasing demand for oil and gas for residential purposes, as well as large number of automobile users in the region. Presence of key players in the region is also likely to favour the market growth as they are focusing more on exploring their market potential by extending their footprint in untapped markets all over the world.
Some of the primary player in the global propane market are British Petroleum, PetroChina Company Limited, AmeriGas, Chevron Corporation, Volero Energy Corporation, Shell Oil Company, Sinopek, Exxon Mobile, and Evonik.
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