Centrifugal Compressor Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Centrifugal Compressor Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Global Centrifugal Compressor system market is expected to reach USD 12.08 billion by the end of this year and is projected to register a CAGR of over 4.26% during the forecast period (2022-2027).

The market was negatively impacted by COVID-19 in 2020. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the medium term, natural gas is increasingly replacing oil and coal as an energy source in the power generation and transportation sectors. In order to fulfill the increasing demand for gas, governments across the world are planning on investing in the expansion of the infrastructure for gas. This is likely to boost the demand for centrifugal compressors during the forecast period
• On the other hand, the declining cost and increasing investments in renewable power generation are hampering the demand for natural gas-fired power generation, in turn, negatively impacting the demand for centrifugal compressors in the power generation industry.
• Nevertheless, several centrifugal compressor manufacturers making strides to develop more energy-efficient products, amid rising end-user demands and changing energy efficiency standards. This factor is expected to create several opportunities for the market in the future.
• Asia-Pacific dominated the market across the world, with China and India accounting for a major share, mainly driven by increasing demand of electricity.

Key Market TrendsOil and Gas Segment to Dominate the Market

• The oil and gas industry offers widespread applications for centrifugal compressors across the upstream, midstream, and downstream sectors. The centrifugal compressor serves various purposes across the oil and gas industry, such as gas transportation, compression for gas injection, gas gathering, gas lift, etc..
• In oil and gas upstream operations gas lifts are used, in which low-pressure gas (3 to 7 bar) is compressed to a higher pressure and recycled down the well casing-tubing annulus, through a gas lift valve into the tubing at a predetermined depth that enables to lighten the liquid column in the tubing.
• Centrifugal compressors are used in later phases to maintain or increase gas flow into the pipeline systems in gas fields, as the reservoir pressure tends to decrease over time. The gas reinjection is used for enhanced oil recovery (EOR) to compensate for the natural decline in production from the oil fields.
• With the increasing environmental awareness over the last decade, most countries have planned to lower their carbon emissions by shifting from coal-based electricity generation to gas-based energy generation concept, which, in turn, supported the natural gas production increase globally during 2010-2021 by 28.14%. The increase in natural gas production and its consumption for power generation is likely to continue, which is expected to support the demand for centrifugal compressors from the oil and gas industry.
• The oil and gas midstream sector across the world is growing on account of the development of new pipeline projects. In the midstream sector, centrifugal compressors are used for gas transportation to boost the pressure and also to overcome pressure drop caused in the pipeline due to friction in the pipeline infrastructure.
• In 2020, the Indian government revealed its plan to invest around USD 60 billion to create gas infrastructure until 2024 and increase gas' share in the energy mix from 6% in 2020 to 15% by 2030. Such efforts by the government are expected to increase the demand for centrifugal compressors during the forecast period.
• In June 2021, INOXCVA, an Indian multinational company, commissioned the United Kingdom’s first-ever multifunctional mini-LNG terminal in Kyleakin, Scotland, for MOWI Scotland. INOXCVA has manufactured and supplied the mini-LNG terminal on a turnkey supply basis to the company. The project includes two 1000 cubic meters of vacuum insulated storage tanks, 300-meter vacuum jacketed piping, a ship bunkering station, a trailer loading station, and a vaporization system suitable for natural gas consumption by a fish feed factory. The mini-LNG terminal is capable of taking LNG through small-scale vessels as well as by semi-trailers and IMO containers.​
• Furthermore, in February 2021, Qatar reached FID on the North Field East Project (NFE), comprising of four mega LNG trains of 8 MTPA each, at an estimated cost of USD 28.75 billion. The 33 MTPA project is expected to start production in Q4 2025 and will raise Qatar’s LNG production to approximately 110 MTPA by late-2026 or early 2027. With the growing demand for LNG, similar projects are expected to support the growth of centrifugal compressors in the oil and gas sector.
• Therefore, owing to the above points, oil and gas segment is expected to dominate the centrifugal compressor market during the forecast period.

Asia-Pacific to Dominate the Market

• Asia-Pacific dominated the global market share in 2021. The oil and gas and power industries remain the largest end-users of these compressors in the region. There are a number of floating production storage and offloading (FPSOs) projects in Asia-Pacific, which is expected to begin operations over the next four years. The increasing FPSO projects are expected to create tremendous opportunities in the market studied.
• Asia-Pacific is witnessing a widespread development of industrial infrastructure, which leads to a surge in demand for power. As the requirement of continuous power supply is imperative for industrial operations, new power plants need to be developed. Therefore, the increase in development of power generation plants, particularly the gas-fired generation plants, is expected to drive the demand for centrifugal compressor during the forecast period.
• China is also committed to strengthen its oil and natural gas pipeline network in the next 10 years, in an attempt to further boost the clean fuel’s share in the country’s energy mix. According to the National Development and Reform Commission, the country’s natural gas pipelines is expected to reach 123,000 km, by 2025. As centrifugal compressors are one of the most commonly used equipment powering the long distance natural gas pipeline, the growth in the pipeline network is expected to drive the demand for the centrifugal compressor during the forecast period.
• As China is the world’s 2nd largest oil consumer and the 6th largest producer of oil, it imports nearly 50% of its hydrocarbon demand. Due to this, the oil and gas import, handling, and processing infrastructures are concentrated along the coastal regions in East China. The rising demand for oil and gas and related imports, handling, and processing infrastructure is expected to provide significant demand for centrifugal compressors in the country.
• Further, in India, under the Make in India program, the government expects to place India on the world map as a manufacturing hub. According to the Indian Brand Equity Foundation, the manufacturing sector in the country has the potential to reach USD 1 trillion by 2025. It is likely to increase the demand for centrifugal compressors during the study period.
• Therefore. owing to the above points, Asia-Pacific is expected to dominate the centrifugal compressor market during the forecast period.

Competitive Landscape

The centrifugal compressor market is consolidated in nature. Some of the major players (in no particular order) include Ingersoll Rand Inc., Baker Hughes Company, Siemens Energy AG, Mitsubishi Heavy Industries Ltd, and Atlas Copco AB.

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• The market estimate (ME) sheet in Excel format
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