Process plant equipment in downstream oil and gas industry: Key market research findings
- New refinery construction drives market growth
- Plat segment accounts for a majority of the market’s revenue
- Key vendors – Fluor, Hyundai, Saipem, Samsung, and Technip
Technavio’s market research analysts predict the global process plant equipment market in the downstream oil and gas industry to grow at a CAGR of more than 1% between 2016 and 2020. The growth of this market is fueled by the increase in new refinery construction across Asia and Middle Eastern countries. The construction of new refineries has increased in the developing countries, such as India and China, and the Middle East. All these countries have a strong focus on developing their downstream refining so as to reduce the import of refined petroleum products and petrochemicals. China, being the world’s most populous country, had witnessed strong demand for refined products as well as petrochemicals. During 2015, the global process plant equipment market in the downstream oil and gas industry was dominated by MEA with a market share of more than 54%. The projected increase in capacity additions in the region is expected to contribute to the further growth of the market in this region during the forecast period.
The new market research report from Technavio presents a breakdown and analysis of the process plant equipment segments based on the type.
“The players in the oil refining industry have started increasing their operations in other countries, especially those who present greater demand for petrochemical and refined products. A prominent example of this would be the plans of Saudi Aramco to increase its footprint in the upcoming fuel demand centers in Asia. The company is analyzing the countries where it wants to set its refineries. The countries under consideration are China, Indonesia, Malaysia, Vietnam, and India,” says Thanikachalam Chandrasekaran, Lead Analyst, Energy, Technavio Research.
During 2015, the plant segment accounted for around 55% of the overall market share to become the key revenue generating vertical of the global market. The plant equipment segment consists of heavy equipment used in oil and gas refineries. The equipment considered in the report are pressure vessels, storage tanks, columns, crystallizers, heat exchangers, evaporators, and furnaces. This segment forms the core of any refinery and accounts for the largest share of equipment costs. The share and demand of plant equipment segment is expected to increase in step with an overall expansion in the construction of complex refineries.
The key vendors in the global process plat equipment market in the downstream oil and gas industry include Fluor, Hyundai, Saipem, Samsung, and Technip. A key trend in recent refinery construction is to build the plant offsite in modules and fabricating the structure onsite. It is not necessary for EPC companies to manufacture the entire plant themselves. At times, the vendors prefer to sub-contract the manufacturing of components to players with good manufacturing capabilities while it itself acts as the management firm. For instance, Saipem once completed a hydrocracking project whereby 23 very large modules were sub-contracted to a contractor in Abu Dhabi, UAE. The decision to manufacture the plant offsite was taken due to little available space at the site and a shortage of skilled labor. Saipem acted as the project manager in this case and was responsible for the quality of the hydrocracking unit.
A more detailed analysis is available in the Technavio report, Global Process Plant Equipment Market in the Downstream Oil and gas Industry 2016-2020.
We can customize reports by other regions and specific segments upon request.
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