Global Natural Gas Liquids (NGLs) Market By Product (Propane, Ethane, Isobutene, Natural Gasoline), Application (Petrochemicals, Space Heating), & Region for 2024-2031

Natural Gas Liquids (NGLs) Market Valuation – 2024-2031

The utilization of NGLs as petrochemical feedstocks serves as a cornerstone for various chemical-based products, underpinning a robust demand trajectory. This versatile resource finds application in home heating, the production of plastics, and as a fuel. Thus, the versatility of natural gas liquid is driving the market size to surpass USD 20.26 Billion in 2024 to reach a valuation of USD 32.48 Billion by 2031.

Technological advancements in drilling techniques have notably expanded the availability of NGLs, augmenting their accessibility and contributing to market growth. Oil and gas companies stand to benefit from this expansion, as NGLs offer them diversified revenue streams beyond traditional hydrocarbon products. Thus the technological advancement in drilling methods is enabling the market to grow at a CAGR of 6.08% from 2024 to 2031.

Natural Gas Liquids (NGLs) MarketDefinition/ Overview

Natural gas liquids (NGLs) refer to the lighter hydrocarbons found dissolved in associated or non-associated natural gas within a hydrocarbon reservoir. They are constituents of the gas stream and encompass ethane, propane, butane, and isobutene, collectively known as LPG, as well as pentane-plus and gas condensate. These molecules typically range from 2 to 8 carbon atoms (C2H6-C8H18).

In the realm of natural gas processing, the rich gas stream encountered above ground undergoes a natural separation process, wherein heavier components condense while lighter ones typically remain gaseous. To extract valuable components, such as ethane, propane, butane, and pentane-plus, from this mixture, gas processing plants (GPPs) play a vital role. This process yields two primary categories of natural gas liquids (NGLs)condensate and other NGLs. Condensate, distinguished by its unique characteristics, stands apart from other NGLs due to its properties and uses. However, in industry reporting, NGLs are often bundled with various other oil products, such as Gas-to-Liquids (GTL), mined synthetic crudes, or biofuels. This discussion focuses exclusively on condensate and other NGLs, excluding other oil types.

Rapid urbanization and industrialization, particularly in emerging economies, present considerable prospects for the natural gas liquids (NGLs) market. NGL demand is expected to rise, driven by their use in heating applications and as critical feedstocks for the petrochemical industry. NGLs are a cleaner-burning alternative to traditional fuels such as coal, fitting with the global trend toward cleaner energy sources. This growing demand for cleaner fuels increases the appeal of NGLs in a variety of applications, supporting market prospects.

How the Increasing Concern about Greenhouse Emissions and Cost-effectiveness is Fostering the Growth of the Natural Gas Liquids (NGLs) Market?

The growing concern about greenhouse gas emissions and their influence on global climate change has accelerated the rise of cleaner-burning natural gas as the preferred fuel source. While coal and oil will continue to dominate the fossil fuel landscape for the foreseeable future, natural gas is expected to play an increasingly important role in setting the nation’s energy trajectory. In addition, growing acknowledgment of natural gas’s environmental benefits has resulted in increased consumption. Natural gas technology and supplies have advanced significantly during the last 25 years. Innovations in exploration, production, transportation, storage, and consumption have increased confidence in the long-term viability of natural gas supplies.

The abundant and cost-effective excess of natural gas liquids (NGLs) has fueled a surge in infrastructure development, particularly in wet gas-rich regions like Appalachia. In the recent decade, oil, gas, and chemical industries have launched an infrastructure buildout push, investing more than $200 billion in shale gas projects.  This boom in investment has accelerated the construction of roughly 350 gas-dependent chemical plants in the United States. These activities represent a deliberate reaction to capitalize on favorable market conditions and meet the growing demand for NGLs. The proliferation of infrastructure and the creation of new chemical plants highlight NGLs’ critical role in driving market growth and facilitating downstream value addition. As businesses capitalize on the abundance and with an economical NGL supply, the natural gas liquids sector continues to expand and thrive, propelled by strong investment and strategic growth plans.

The direct connection of natural gas pipelines to consumers’ households streamlines the delivery process, eliminating the complexities associated with traditional fuel supply chains. This convenience enhances accessibility and encourages widespread adoption. Natural gas’s lighter-than-air property ensures safety in usage scenarios, mitigating risks associated with leaks. Its rapid dissipation into the atmosphere minimizes the potential for fire hazards, enhancing consumer confidence and trust. With abundant reserves surpassing those of crude oil and other fossil fuels, natural gas promises long-term availability and stability in supply. This abundance fosters market resilience and sustains momentum in NGLs production and utilization.

Natural gas boasts superior energy efficiency compared to alternatives like propane gas, delivering more energy output when burned. This increased efficiency optimizes resource utilization and contributes to cost savings for consumers and industries. The transition to natural gas as a preferred fuel for cooking and other purposes simplifies delivery logistics. Utilizing existing networks of pipelines facilitates efficient and seamless distribution, driving market penetration and scalability. Natural gas is highly flammable, making it an efficient source of energy. Its combustion yields substantial energy output, contributing to its widespread use in heating, electricity generation, and industrial processes. Natural gas infrastructure, including pipelines and distribution networks, facilitates convenient delivery to consumers’ homes and businesses. This accessibility streamlines usage and supports market growth.

How the Pollution and Environmental Concerns Hampering the Growth of the Natural Gas Liquids (NGLs) Market?

Raising serious concerns about pollution, environmental justice, and public health repercussions the fast rise of natural gas liquids (NGL) production and accompanying infrastructure raises serious worries about increased pollution and a worsening of environmental justice issues.  Plants that convert natural gas and NGLs into petrochemicals generate significant amounts of air and climate pollutants, including polycyclic aromatic hydrocarbons, carbon dioxide, ozone-producing volatile organic compounds (VOCs) like benzene and toluene, and nitrogen oxides. Furthermore, these facilities contribute to the spread of harmful plastics, which adds to the growing garbage in landfills and oceans.

The development of new petrochemical, cracker, and plastic plants exacerbates existing environmental issues in places where the sector is expanding. Furthermore, it spreads these environmental burdens to other areas where projects are being created. This increase in pollutant levels threatens to exacerbate existing air quality and public health concerns, particularly in areas already dealing with high pollution levels and accompanying ailments. For instance, the Gulf Coast, known for its significant industrial presence, already has some of the highest pollution levels and accompanying health problems. Similarly, the Tri-State region, which includes Ohio, Pennsylvania, and West Virginia, faces enormous environmental difficulties as a result of a century of industrial pollution.

Natural gas liquids (NGLs) are transported via hazardous liquid pipelines, which pose substantial safety risks. They transport not only NGLs, but also crude oil, refined petroleum products, and highly volatile liquids like condensates.  Pipelines are the primary and most cost-effective form of NGL transportation, accounting for more than 90% of all NGLs carried by volume in the United States. With over 54,000 miles of documented NGL pipelines crisscrossing the country, they serve a variety of purposes, including transferring purity goods to downstream products like petrochemicals and gasoline mixtures.

The hazardous Liquids Pipeline Safety Act of 1979 establishes minimum safety standards for hazardous liquid pipelines nationwide. While the Pipeline and Hazardous Materials Safety Administration (PHMSA) primarily oversees and enforces pipeline safety, other agencies such as the U.S. Environmental Protection Agency, the Coast Guard, the Occupational Safety and Health Administration, and state agencies may also be involved in safety-related matters such as inspection, spill response, cleanup, and worker safety. However, jurisdictional borders are frequently unclear.

Despite regulatory frameworks in place, a considerable amount of pipelines remain unregulated, falling outside the scope of federal and state oversight. For example, only 4,000 miles of onshore hazardous liquid collection lines are regulated by the PHMSA, with most states opting out acquire regulatory obligations. Furthermore, there is no official federal siting or permitting process for hazardous liquid pipelines, resulting in major variances in approval procedures from state to state.

Category-Wise Acumens

How the Petrochemical Industry is Surging the Growth of Ethane in Natural Gas Liquids (NGLs) Market?

The ethane segment is substantially fostering growth in the natural gas liquid (NGLs) market and is expected to dominate the market during the forecast period, owing to the primary feedstock for the petrochemical industry in the foreseeable future. Ethane cost-effectiveness for the production of ethylene and its derivatives, providing cost advantages for the petrochemical industry. However, this results in a shortfall in supply for co-products such as propylene, while propane demand is likely to shrink as families switch to natural gas for heating, which is surging the growth of ethane in the natural gas liquid market.

Furthermore, heavier NGLs like butane and pentane exhibit different behaviors. North America may face a surplus of butane when it is displaced from the motor gasoline pool due to higher ethanol mixing, but natural gasoline demand could grow pushed by the oil sands.

The boom in ethane production, especially in the United States, is likely to continue until 2035, driven by the anticipated increase in North American dry natural gas production. This significant growth in ethane production is backed by its long-term advantage over other feedstocks, which is due to increased availability and downward pressure on prices.

With petrochemical facilities preferring the use of the lowest feed slate, US crackers have increased ethane consumption. However, as utilization rates reach reasonable levels, the chemical sector in the United States is looking into ways to expand ethane use even higher.  The petrochemical industry’s demand for ethane remains strong, as it is fully dependent on petrochemical plants, known as steam crackers, for its use. The United States stands out as an appealing global source of ethylene, benefiting from its capacity to access demand centers and offer competitive prices for cheap feedstock.

For instance, according to the U.S. Energy Information Administration (EIA), domestic ethane production has nearly doubled since 2013, surging from 0.95 million barrels per day (b/d) to 1.85 million b/d as of the beginning of 2021. Around 80 percent of the annual ethane production in the United States is currently absorbed by the domestic petrochemical industry. However, the U.S. holds the distinction of being the foremost global exporter of ethane, with exports projected to increase by 20 percent between 2020 and 2022. This growth is driven by rising demand from diverse markets, including Canada, China, Europe, and India.

How the Highest Portion of the World’s Oil and Gas Resources Consume by Petrochemical is Driving the Growth of Petrochemical Segment in the Natural Gas Liquid (MGLs) Market?

The petrochemical segment is significantly dominating the growth natural gas liquid market. Petrochemical and derivative production consumes a significant portion of the world’s oil and gas resources, accounting for over 14% of oil and 8% of gas. Interestingly, much of this energy is used as feedstock in the petrochemical industry and is not burned, making it the largest industrial energy consumer but only the third-highest industrial carbon dioxide (CO2) emitter.

Despite this, the petrochemical sector remains an important engine of industrial growth, with demand for its products expected to rise further as the global economy improves. Plastics, in particular, have seen extraordinary demand growth, outperforming other bulk commodities such as steel, aluminum, or cement, virtually doubling since the turn of the millennium.

Developed economies, such as the United States and Europe, now consume substantially more plastics and fertilizers per capita than developing economies like India and Indonesia, showing tremendous global development potential.

Chemicals obtained from oil and gas make up the majority of all raw materials, accounting for over 90% of feedstocks, with the remaining coming from coal and biomass. Fuels used as raw materials account for over half of the petrochemical sector’s energy consumption, allowing for the production of a variety of products.  Given its importance in resource consumption, industrial output, and global economic development, the petrochemical segment wields substantial influence over the natural gas liquids market, driving demand and defining market dynamics for the foreseeable future.

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Country/Region-wise Acumens

Will the Natural Gas Liquids (NGLs) Market Fare in North America?

North America is significantly dominating the natural gas liquid (NGLs) market and is expected to continue its growth throughout the forecast period owing to the continual breakthroughs in drilling and extraction methods, particularly hydraulic fracturing and horizontal drilling, which have unlocked prolific shale plays across the country. Many Americans have reaped the benefits of greater domestic oil and gas production, including cheaper costs for home heating, gasoline, and electricity, as well as lower emissions from the electrical sector as natural gas-fired power plants become more prevalent. Furthermore, there has been less reliance on foreign energy imports.

The natural gas liquids (NGLs) market is undergoing substantial adjustments as a result of expanding import and export demand, increased NGL production, and rapid urbanization patterns. The fast rise of the shale gas sector, along with low-cost NGLs and reduced reliance on foreign energy imports, has positioned the United States as a market leader in North America. Supply cost efficiencies, currency exchange rate volatility, and effective product monetization methods all help to drive regional market growth. North America, particularly the United States, is establishing dominance in the natural gas liquids (NGLs) industry, owing to considerable production growth and breakthroughs in extraction technology.

Natural gas marketed production in the United States is expected to increase significantly, reaching an average of 104.4 billion cubic feet per day (Bcf/d) in 2022 and a record high of 106.6 Bcf/d in 2023. Almost all of this production, at 97%, comes from the Lower 48 states, excluding the Federal Offshore Gulf of Mexico, with the remaining 3% coming from Alaska and the Gulf of Mexico. Furthermore, NGL output in the United States has skyrocketed, increasing by 300% over the last 16 years, from roughly 634 million barrels in 2006 to around 2.17 billion barrels in 2022.

Texas and Louisiana emerged as important contributors in 2022, accounting for over 54% of total fractionated NGLs in the United States. Despite this large fractionation activity, these states collectively constituted just around 37% of U.S. natural gas production, indicating a widespread distribution of NGL production across North America. Moreover, the United States has emerged as a key player in the global NGLs market, boasting a burgeoning export business. This growing export activity further propels market dynamics, positioning the U.S. as a significant contributor to the international NGLs trade landscape.

How the Expanding Urbanization, Industrialization is Escalating the Growth of Asia Pacific Natural Gas Liquid (NGLs) Market During the Forecast Period?

Asia Pacific is expected to be the fastest growing region during the forecast period owing to its status as a growing market poised for rapid growth. The region’s energy consumption exceeds original forecasts, resulting in increased interest in NGLs. This spike is driven by expanding urbanization, industrialization, and rising consumer demand for energy resources. As a result, the Asia-Pacific market is expected to have strong expansion, creating profitable prospects for industry participants. Rapid modernization in nations such as China and India is driving up demand for natural gas liquids. This spike in industrial activity, fueled by strong economic growth, emphasizes the need of NGLs as a critical petrochemical feedstock and for industrial heating.

Furthermore, Liquefied Petroleum Gas (LPG), a key product derived from NGLs, remains a vital source of cooking fuel, particularly in rural regions across Asia. As populations grow, LPG usage is expected to rise, emphasizing its importance in addressing the cooking and heating needs of increasing communities. While certain Asian countries, such as Qatar, have their natural gas liquids (NGL) production capabilities, the area relies primarily on imports to meet its NGL demand. This reliance on imports presents a lucrative market for exporters such as the United States, which can capitalize by producing NGLs to meet Asia’s expanding demand.

Competitive Landscape

The NGL market is a competitive landscape with various players vying for market share. Staying ahead requires a focus on cost efficiency, technological innovation, strategic partnerships, and adaptation to the evolving energy landscape. Companies like Exxon Mobil (US), Shell (Netherlands/UK), Chevron (US), and BP (UK) are major players, especially in North America’s shale gas boom. They possess expertise in extraction and processing technologies.

The organizations are focusing on innovating their product line to serve the vast population in diverse regions. Some of the prominent players operating in the natural gas liquid (NGLs) market include

• ExxonMobil Corp.
• Chesapeake Energy Corp.
• BP Plc
• Range Resources Corp.
• Royal Dutch Shell Plc
• SM Energy
• Swift Energy Company
• Statoil ASA
• Linn Energy LLC
• Chevron Corp.
• Canadian Natural Resources Limited
• Anadarko Petroleum Corp.
• Alkcon Corp

Latest Developments

• In April 2019, Hess Midstream Partners LP announced plans to boost natural gas processing capacity at the Toga gas facility by 150 million cubic feet per day, bringing total processing capacity north of the Missouri River to 400MMcf/d.
• In March 2023, Saudi Aramco announced record profits of $161 billion, as gasoline prices rose in response to the Coronavirus outbreak. The statistics beat ExxonMobil and Shell, which reported profits of $55.7 billion and $39.9 billion, respectively.
• In July 2019, Occidental Petroleum announced the acquisition of Anadarko Petroleum, which had a long history of environmental infractions, including the largest environmental contamination settlement in American history, involvement in the Deepwater Horizon BP disaster, and Clean Water Act fines.

Report Scope

Natural Gas Liquid (NGLs) Market, By Category

Product

• Propane
• Ethane
• Isobutene
• Natural Gasoline

Application

• Petrochemicals
• Space Heating

Region

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Research Methodology of Market Research