Liquefied Petroleum Gas Market Research
Liquefied Petroleum Gas (LP Gas) market falls under one of the biggest industries, the oil industry. The Oil Industry racks trillions of dollars annually, with the Liquefied Petroleum Gas market contributing hundreds of billions.
Even with the introduction of alternative options, demand for Liquefied Petroleum Gas is projected to grow due to government initiatives, emission control, and population growth. The positive outlook for the market makes it a lucrative investment vehicle.
However, with its growing popularity, the Liquefied Petroleum Gas market suffers its own fair share of missteps and issues. Market analysis and research are a few of the best ways to mitigate potential problems when investing in the industry.
What is Liquefied Petroleum Gas (LP Gas)?
Liquefied Petroleum Gas, more popularly known as LPG, is a fuel gas made from a mixture of five flammable hydrocarbon gases. The refining of petroleum gas or natural gas produces LPG as a product of the process.
Even though sourced from crude oil and natural gas, Liquefied Petroleum Gas became an attractive eco-friendly and low-carbon emission option. It cleanly burns, emits no black carbon, and discharges low sulfur and carbon dioxide.
Liquefied Petroleum Gas has grades instead of types, which pertain to the different mixtures of hydrocarbon gases. In the United States, there are 2 grades of LPG, namely HD-5 and commercial propane. Adjustments made in LPG mixture depend on the climate and location of where it is intended for sale.
It gained popularity in the early 1900s with the use of home appliances and vehicles. Now, various industries, such as agriculture, hospitality, and construction, rely on Liquefied Petroleum Gas to power their machinery and equipment.
Alternatives to LPG have been introduced, including piped natural gas. But, it is still incapable of providing for the growing population, especially in an urbanized area.
Trends and Opportunities
Liquefied Petroleum Gas has been a staple to homes and industries, which made it one of the best markets to invest in. With its continuous growth due to increasing demand, there are a lot of opportunities opening to interested investors. However, to make the right financial move and avoid misjudgment, investors are expected to educate themselves about the latest trends directing the market.
- Expanding as a feedstock in the chemical industry: LPG has been utilized as an energy carrier, powering different machines and appliances. It appears that not for long, it will become a potential feedstock for the synthesis of olefins.
- Increased global production of natural gas liquids: There is an increase in the production of natural gas liquids with an estimated annual growth of 3.2% over the last decade. This increase consequently influences the supply growth for LPG.
- No more oil refineries for LPGs produced from natural gas: A gas separation facility can now perform extraction of natural gas to form the LPG. Gas separation production is less expensive than those crude oil refineries.
- Easier transport of natural-gas-produced Liquefied Petroleum Gas: LPG produced from natural gas can be distributed via pipelines and tankers.
- North America leads the production of LPG produced from natural gas: North America continues to lead the natural-gas-extracted Liquefied Petroleum Gas market as its production of natural gas liquids grows.
- Europe’s security of LPG supply: Europe is self-sufficient in terms of Liquefied Petroleum Gas as they are the home of multiple natural gas and oil refineries. Distribution of the LPG is also secured with different methods of transport available, from rail to water.
Benefits of Liquefied Petroleum Gas Market Research
Liquefied Petroleum Gas market covers a global chain, which makes it difficult to assess without proper research and analysis. Having dedicated LPG market research will provide a breakdown of everything an investor should know. It also tackles factors surrounding the market, especially the companies and producers involved.
- Analysis of the LPG market: A specific market, such as LPG, can be difficult to analyze without a proper understanding of the market itself. A cohesive research can provide all the analysis necessary to understand how the LPG market operates and where it is going.
- Easier understanding of the market and its product: Most investors will not understand the latest trends and information available to the public. Discussions about the product itself might be challenging for people as they might involve scientific studies and discussions. Market research will make it easier by highlighting relevant information that can influence them to create wise investment decisions.
- Saves time: Research, analysis, and preparation can take up to a week or months to perform. Investors can opt to save their time and energy by relying on market research performed by a professional. These researchers have a better grasp of the market and tactics in making it relevant to the interest of the investor.
Challenges in the Liquefied Petroleum Gas Market
Liquefied Petroleum Gas market is under one of the biggest global industries, which means it has a fair share of troubles and controversies. From environmental-related issues to inflating prices, this is a list of challenges that the market faces.
- Scarcity concerns: LPG serves as an energy carrier for different home appliances, from cooking to heating. With the increasing demand, producers are now challenged to keep up with it.
- Inflated prices: Price increases follow low supply. One classic reason for low supply is there are a few countries hoarding most LPG supplies, creating an imbalance.
- Environmental issues: Although one of the cleanest types of gas, LPG is also produced by processing crude oil. Crude oil is a naturally occurring fossil fuel and can be found underground. To extract, companies must drill through the soil, creating adverse environmental impacts. Some of the issues related to it are disruption of wildlife, damaging the land, and generating pollution. These reasons became the driving force behind the preference for natural gas-extracted LPG. It is determined to be cleaner and less harmful to the environment.
- Safety concerns: Many producers are finding ways to distribute LPG faster while being cost-effective. One of the ways is using an underground pipeline. However, there are already reports of explosions attributed to the mismanagement of pipes, which caused the ignition.