The reason for the steady growth of natural gas consumption, and subsequently, its production, can be attributed to multiple factors. In addition to the conditions of the global economy, crude oil prices, ease of installations of clean energy sources, availability of natural gas in regions with high demand, monetization of natural gas, and global trade logistics play a key role in shaping the consumption of natural gas. However, the primary driver for the natural gas market is environmental consideration.
Strategic initiatives taken by governments across the globe to reduce the emissions of greenhouse gases (GHG) and curtail pollution have placed natural gas as one of the key sources of energy production. The adoption of liquefied natural gas (LNG) as a viable source of natural gas has encouraged the monetization of natural gas reserves across the world in a bid to deliver natural gas to regions with high demand. Such a trend has also resulted in the development of a more mature natural gas trading market, encouraging better price discovery, decreased logistical costs, and better opportunities for growth for both the suppliers as well as consumers.
In Europe, natural gas consumption declined at 0.4% per year from 2009 to 2019. With the green hydrogen policy, issued as part of the European Union’s (EU) COVID-19 pandemic recovery efforts, green hydrogen will take center stage. In contrast, in such developing regions as the Middle East, Africa, and Central and South America, natural gas consumption has shown steady growth.
North America accounted for the highest consumption of natural gas in the world with a share of almost 27%, followed by Asia-Pacific with 22% in 2019. Within Asia-Pacific, China and Japan together account for about 46% of the region’s natural gas consumption. Other key consumers include India, Thailand, South Korea, and Australia. Asia-Pacific consists of fast-growing economies such as India and China, and the need for energy in these economies is massive. Natural gas is increasingly being accepted as a key source of energy in these developing countries, though coal still plays a major role in the energy production there.
Electricity generation is expected to drive the natural gas engine oil (NGEO) market due to increasing environmental concerns and regulations which prompt power generators to move toward environmentally friendly sources such as natural gas and renewables.
Therefore, the NGEO market has ample room for growth and development. The market offers opportunities to all concerned parties across the value chain, from OEMs, additive suppliers and lubricants producers to third-party service providers. An increase in the adoption of natural gas engines for producing electricity by commercial establishments as well as other captive users, either as backup or as the main power source, offers opportunities for the OEMs, additive producers, and NGEO suppliers to increase their market penetration.
Kline’s new syndicated report Natural Gas Engine Oils: Global Market Analysis and Opportunities will help market participants develop business strategies by understanding the economic, technological, and regulatory trends shaping and driving the global natural gas market and its impact on NGEOs.
Subscribers can develop market entry and expansion strategies by evaluating current and future demand scenarios and key NGEO suppliers in terms of their offerings. By subscribing to the study in its initial stages, you can also have your own questions answered within the study.