Propane Market

Global Propane Market:

The global propane market size reached 181.1 Million Tons in 2023. Looking forward, IMARC Group expects the market to reach 248.7 Million Tons by 2032, exhibiting a growth rate (CAGR) of 3.5% during 2024-2032. The market is primarily driven by rising industrial applications, the escalating energy demand, supply dynamics influenced by crude oil prices and geopolitical events, and the increasing transition to cleaner energy sources.

Global Propane Market Analysis:

• Major Market Drivers: The propane market growth is primarily being supported by the growing worldwide drive towards sustainable energy sources and the emerging trend of decarbonization, which is a result of the increasing environmental concerns and stringent regulatory restrictions. Furthermore, the need for propane is escalating in households, industrial verticals, and the transportation sector, owing to its clean-burning qualities and lower greenhouse gas (GHG) emissions.
• Key Market Trends: The widespread adoption of this compound as a critical raw material for the production of chemicals and plastics is bolstering the market growth. Besides this, the growing popularity of propane across the agriculture, power generation, and petrochemical sectors is further propelling the market outlook.
• Competitive Landscape: Some of the major propane market companies comprise Air Liquide S.A., BP plc, Chevron Corporation, China National Petroleum Corporation, China Petroleum & Chemical Corporation, ConocoPhillips Company, Eni S.p.A., Evonik Industries AG, Exxon Mobil Corporation, GAIL (India) Limited, Gazprom, Indian Oil Corporation Ltd., Royal Dutch Shell plc, Saudi Arabian Oil Co., and TotalEnergies SE, among others.
• Geographical Trends: Asia Pacific accounted for the largest region in the propane market, owing to the emerging trend of industrialization, urbanization, and economic development. Furthermore, the rising need for propane in several industries, including agriculture, manufacturing, and residential heating is catalyzing the expansion of the market further. Besides this, the expanding LPG distribution networks, the extensive utilization of this compound for fulfilling the rising energy needs in rural and urban areas, and the inflating number of investments by the major companies in propane-based infrastructures are positively influencing the market growth in this region.
• Challenges and Opportunities: The major challenges hampering the propane market revenue include the rising competition from alternative fuels, such as electricity, natural gas, and renewable energy sources, owing to their widespread availability and affordability. However, the increasing transition towards cleaner and more sustainable energy sources and the introduction of propane-powered appliances, equipment, vehicles, and power systems are anticipated to present substantial opportunities for market expansion in the future.
   

Global Propane Market Trends:

Energy Demand and Transition

The escalating transition towards more sustainable and cleaner energy sources is supporting the propane market statistics. In line with this, the increasing requirement for propane in residential heating, cooking, and transportation purposes in place of coal or oil, as it emits lower carbon gases, is bolstering the market growth further. For instance, in the United States, about 12 million households use propane as their primary heating source, and around one-fifth of mobile homes use propane for heating. Moreover, the value of residential propane stood at US$ 2.825/gallon, according to the United States Energy Information Administration (EIA). Furthermore, the elevating demand for propane in various applications, such as air conditioning, heating water, cooking, refrigerating foods, drying clothes, lighting, and fueling fireplaces, is offering a positive market outlook. For example, Suburban Propane Partners LP announced the extension of its agreement with U-Haul to provide eco-friendly and renewable propane in California.

Industrial Applications and Petrochemical Demand

The expanding petrochemical sector and the escalating demand for this fuel as a feedstock for the production of chemicals, plastics, and other essential materials are bolstering the propane market recent opportunities. In addition to this, the elevating product requirement for several commercial and industrial applications, including heating, cooking, hot water generation, and as a fuel for forklifts, machinery, and vehicles is propelling the market growth forward. For instance, LPG extracted from natural gas is estimated to be the highest in North America, which contributes to the maximum percentage of LPG produced globally. Moreover, according to the United Nations Data, natural gas liquids from the United States accounted for around 151,604 metric tons, the world's highest. In addition to this, according to the BP Statistical Review of World Energy, global natural gas liquids production was at 12,047 thousand barrels per day, recording a growth rate of 2.2% and an annual increase of 3.2% over the last decade.

Market Dynamics and Supply Factors

Geopolitical events, changes in crude oil prices, and supply disruptions are primarily driving the propane market demand. In line with this, the evolving climatic conditions, especially in cold regions where this fuel is essential for heating applications, are augmenting the market growth. Moreover, propane suppliers and distributors are increasingly focusing on optimizing supply chain operations, logistics, and storage facilities to ensure the reliable and efficient delivery of this fuel to customers, which is also catalyzing the global market. For instance, KBR and ExxonMobil Catalysts and Licensing LLC ("ExxonMobil") collaborated to bring significant advancements to propane dehydrogenation (PDH) technology. Under the collaboration, ExxonMobil's new proprietary catalyst technology was combined with KBR's proprietary K-PRO Propane Dehydrogenation (PDH) technology to convert propane into propylene. Moreover, Enterprise Products Partners announced plans to extend its natural gas liquid (NGL) pipeline system in the Permian Basin and build two processing plants to accommodate the basin's continuous production expansion. The company intends to expand its Shin Oak NGL pipeline infrastructure by looping new pipelines and modifying the current pump stations. This initial extension would increase the capacity to 275,000 bpd, with completion planned in 2024.

Global Propane Market Segmentation

IMARC Group provides an analysis of the key trends in each segment of the global propane market report, along with forecasts at the global, regional, and country levels for 2024-2032. Our report has categorized the market based on form, grade, and end use industry.

Breakup by Form:

• Liquid
• Gas
   

The report has provided a detailed breakup and analysis of the market based on form. This includes liquid and gas.

Liquid propane, commonly referred to as LPG, is recognized for its portability and ease of storage, making it a favored choice for residential, commercial, and industrial settings. Moreover, the widespread adoption of LPG as a crucial energy source for off-grid locations, remote areas, and outdoor activities, such as camping and grilling, is acting as another significant growth-inducing factor. Besides this, the convenience of transportable LPG cylinders and tanks allows for flexible usage in various appliances, which is propelling the market forward. For instance, China produced 291.61 million mt of LPG, naphtha, gasoline, jet/kerosene, gasoil, and fuel oil, up 3.9% year on year, despite crude throughput falling 6.3% over the same period, as per NBS data. Furthermore, China imported 2.12 million mt of LPG, propane, and butane, in May 2022, up 7.1% month on month. Apart from this, the rising need for constant gas propane supply, delivered through pipelines in urban areas and industries for powering heating systems, stoves, and industrial processes efficiently, is positively influencing the market overview. Simultaneously, the complementary nature of liquid and gas propane caters to diverse energy requirements and ultimately pushes their combined demand for several purposes.

Breakup by Grade:

• HD-5 Propane
• HD-10 Propane
• Commercial Propane
   

The report has provided a detailed breakup and analysis of the market based on the grade. This includes HD-5, HD-10, and commercial propanes.

The rising utilization of HD-5 propane in applications that require precise and consistent combustion, such as in forklifts, residential heating, and food processing, on account of its high purity and low moisture content, contributes significantly to the growth of the propane market. In line with this, HD-10 propane, with slightly relaxed purity standards, remains a popular option for similar purposes, offering a cost-effective alternative while maintaining acceptable performance. Furthermore, the escalating demand for commercial propane across various industrial verticals, including agriculture, construction, hospitality, and transportation, owing to its versatility and adaptability to several equipment and procedures, presents lucrative opportunities for the market expansion. Additionally, the widespread product adoption as a reliable fuel source, supporting operations, including irrigation pumps, space heating, and fleet vehicles, is also stimulating the market globally.

Breakup by End Use Industry:

• Residential
• Commercial
• Transportation
• Others
   

Residential holds the largest segment in the propane market share

The report has provided a detailed breakup and analysis of the market based on the end use industry. This includes residential, commercial, transportation, and others. According to the report, residential accounted for the largest segment of the market.

The growing popularity of propane in the residential sector is driven by its distinguishing advantages and contributions to modern living. As homeowners increasingly prioritize energy efficiency and environmental responsibility, this fuel emerges as a clean-burning alternative that significantly reduces GHG emissions compared to traditional fossil fuels. Moreover, the versatility of propane in powering various residential applications, including space and water heating, cooking, and backup power generation, is augmenting the market growth. In addition to this, propane's widespread availability, mainly in areas without natural gas infrastructure, ensures consistent access to energy for households. For instance, in the United States, about 12 million households use propane as their primary heating source, and around one-fifth of mobile homes utilize propane for heating. In the first week of February 2022, the value of residential propane stood at US$ 2.825/gallon, according to the United States Energy Information Administration (EIA).

Breakup by Region:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia Pacific leads the market, accounting for the largest share in the propane market forecast

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific accounted for the largest market share.

Asia Pacific represents the largest region as per the propane market overview, owing to the emerging trend of industrialization, urbanization, and economic development. Furthermore, the rising need for propane in several industries, including agriculture, manufacturing, and residential heating is catalyzing the expansion of the market further. Besides this, the expanding LPG distribution networks, the extensive utilization of this compound for fulfilling the rising energy needs in rural and urban areas, and the inflating number of investments by the major companies in propane infrastructure are positively influencing the market growth in this region. For instance, Indian Oil Corp. (IOC) announced plans to construct three new plants in Northeast India to increase its LPG bottling capacity by nearly 53% or to 8 crore cylinders annually by 2030 to meet the growing demand in the region. The total investment in the plant expansion is likely to range between US$ 43-46 Million. Moreover, China produced 291.61 million mt of LPG, naphtha, gasoline, jet/kerosene, gasoil, and fuel oil, up 3.9% year on year, despite crude throughput falling 6.3% over the same period, as per NBS data. It imported 2.12 million mt of LPG, propane, and butane, up 7.1% month on month.

Competitive Landscape:

The global propane market statistics are characterized by a dynamic competitive landscape shaped by various factors. Key players in the market include major oil and gas companies, regional energy providers, and LPG distributors. These players often engage in exploration, production, and distribution activities, influencing supply dynamics. Market competitiveness is also driven by the diverse applications of propane, ranging from residential heating and cooking to industrial processes and transportation. The growth of cleaner energy trends has prompted these companies to invest in research and development to enhance propane efficiency and environmental performance. Geopolitical events, supply disruptions, and fluctuations in crude oil prices significantly shape the competitive environment, impacting pricing and trade dynamics. Regulatory frameworks, environmental policies, and technological advancements further contribute to competitive strategies as companies strive to meet evolving market demands.

The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. Some of the major market players in the Propane Market Industry include:

• Air Liquide S.A.
• BP plc
• Chevron Corporation
• China National Petroleum Corporation
• China Petroleum & Chemical Corporation
• ConocoPhillips Company
• Eni S.p.A.
• Evonik Industries AG
• Exxon Mobil Corporation
• GAIL (India) Limited
• Gazprom
• Indian Oil Corporation Ltd.
• Royal Dutch Shell plc
• Saudi Arabian Oil Co.
• TotalEnergies SE
   

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Propane Market Recent Developments:

• November 2023: BPCL signs a 15-year propane supply agreement, worth Rs 63,000 Crore, with GAIL for latter’s PDH-PP (Propane Dehydrogenation and Polypropylene) Plant project in Usar, Maharashtra.
• November 2023: The West Virginia Department of Health and Human Resources (DHHR) announced a supplemental payment to assist eligible residents with propane heating expenses for the 2023-24 winter season.
• September 2023: Tankfarm, the tech-enabled propane distribution platform, announced the closure on a US$ 23 Million Series-B round led by a handful of prominent family offices and existing investors. The capital will go towards customer acquisition, continued development of Tankfarm’s patent-pending technology platform, and extending its national propane delivery footprint which currently spans 37 states and over 400 locations.

Propane Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the propane market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global propane market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the propane industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.