Natural Gas Distribution Market Definition
The natural gas distribution market consists of sales of natural gas by entities (organizations, sole traders and partnerships) that operate gas distribution systems (mains and meters), including gas marketers that buy gas directly from the gas wells or storages and sell it through a distribution system, through gas brokers or agents that arrange the sale of gas over gas distribution systems operated by others. This industry includes establishments that transmit and distribute gas to final end-consumers only.
A natural gas distribution system is the final step of delivering natural gas to end consumers. Large industrial, commercial, and electric generation companies receive natural gas in bulk quantities through high-capacity interstate and intrastate pipelines that are contracted through natural gas marketing companies. While, the majority of small and mid-size enterprises (SMEs) and residential households receive natural gas from their local gas utility systems (LDCs) which are regulated utilities that deliver natural gas to customers within in a specific location or geography.
Natural Gas Distribution Market Size
The global natural gas distribution market reached a value of nearly $466,183.8 million in 2020, having at a declining compound annual growth rate (CAGR) of -1.1% since 2015. The market is expected to grow at a CAGR of 10.2% from 2020 to reach $758,910.4 million in 2025. The global natural gas distribution market is expected to reach $1,057,566.5 million in 2030, at a CAGR of 6.9%.
Growth factors in the historic period include rapid economic growth in emerging markets, social security energy schemes, rise in demand for gas in end-user industries, pipeline expansions, and government initiatives to have access to cleaner energy. Factors that negatively affected growth in the historic period were impact of wind energy, high risks related to storage, volatile costs and unfavorable weather conditions.
Going forward, rising urbanization, increasing demand for automotive natural gas vehicles, alternate modes of natural gas distribution, and development of new gas pipelines will drive growth. Factors that could hinder the growth of the natural gas distribution market in the future include rising wind energy use, stringent environmental regulations, and outbreak of coronavirus disease (COVID-19).
Natural Gas Distribution Market Drivers
The key drivers of the natural gas distribution market include:
Increasing Demand for Automotive Natural Gas Vehicles
Growing demand for automotive natural gas vehicles is anticipated to boost the revenue for the natural gas distribution market over the upcoming years. The surge in production of passenger and commercial vehicles generates huge demand for natural gas vehicles as the transportation sector across the world is adopting natural gas for vehicles. Conventional fuels, such as diesel and petrol are causing pollution and emitting greenhouse gas emissions on a large scale. For example, CNG costs about 50% less than petrol and emits up to 90% fewer emissions than petrol. The increase in demand for natural gas vehicles will drive the natural gas distribution market.
Natural Gas Distribution Market Restraints
The key restraints on the natural gas distribution market include:
Stringent Environmental Regulations
Stringent environmental regulations are expected to limit the market growth over the forecast period. With more regulations and restrictions being set into place caused by climate change, industries and governments are looking to cleaner energy resources restraining the natural gas distribution market. Methane, the main ingredient found in natural gas, is a far more potent greenhouse gas than CO2. Methane accounts for nearly 15% of greenhouse gas emissions. Methane is more than 80 times as effective at trapping heat as carbon dioxide, which has a lower capacity for heat storage but can linger in the earth’s atmosphere for hundreds of years.
Natural Gas Distribution Market Trends
Major trends influencing the natural gas distribution market include:
Advanced Metering Infrastructure (AMI) For Gas Utilities
Natural gas distribution companies are using advanced metering infrastructure (AMI) technology to better monitor and maintain assets and infrastructure. AMI is an integrated system of smart meters, communication systems and data management systems. AMI improves meter reading, cuts incremental costs and reduces the need for estimated billing. It also helps to obtain real-time insights and analysis on the entire distribution network to detect corrosion and leaks. As part of its AMI deployment program, British Gas has installed smart gas meters in the UK and plans to install them in every home and small business by 2020. This target date has since been extended to the end of June 2025. . For instance, some of the major companies in the US using AMI technology include SoCalGas, PG&E, SDG&E, Con Edison, and Baltimore Gas & Electric.
Acoustic Leak Detection Technology For Gas Pipelines
Natural gas distribution companies are using acoustic leak detection technology to monitor gas pipelines. This technology uses the principle of sound for pipelines of diameter 4 meters or larger. It consists of an acoustic sensor, tri-axial accelerometer and magnetometer, GPS system and detects irregularities associated with leaks in a pressurized pipeline. This helps in preventing gas pipeline failures and thus improves gas distribution. For Instance, some of the major companies offering acoustic leak detectors include Det-tronics, Atmos, Emerson, MSA and Sewerin.
Opportunities And Recommendations In The Natural Gas Distribution Market
Opportunities –The top opportunities in the natural gas distribution market segmented by type will arise in the industrial and commercial natural gas distribution segment, which will gain $248,223.9 million of global annual sales by 2025. The top opportunities in the natural gas distribution market segmented by type of operator will arise in the private operator segment, which will gain $217,984.9 million of global annual sales by 2025. The natural gas distribution market size will gain the most in Russia at $66,377.5 million.
Recommendations-To take advantage of these opportunities, The Business Research Company recommends natural gas distribution companies to focus on AMI (Advanced Metering Infrastructure) technology and acoustic leak detection technology to obtain real time insights and analysis and to better monitor leaks in the plant, scale up through mergers and acquisitions, offer competitive pricing, increase visibility through business websites and listing websites, direct marketing and focus on fast-growing end-use industries among other strategies.
Natural Gas Distribution Market Segmentation
The natural gas distribution market is segmented by type, by type of operator and by geography.
By Type Of Operator -
The natural gas distribution market is segmented by type of operator into
- a) Private Operator
- b) Public Operator
The natural gas distribution market is also segmented by type of operator into private operator, and public operator. The private operator market was the largest segment of the natural gas distribution market segmented by type of operator, accounting for 72.6% of the total in 2020 and is expected to be the fastest growing segment, at a CAGR of 10.5% during 2020-2025.
By Type –
The natural gas distribution market is segmented by type into
- a) Industrial and Commercial Natural Gas Distribution
- b) Household Natural Gas Distribution.
The natural gas distribution market is segmented by type into industrial and commercial natural gas distribution, and household natural gas distribution. The industrial and commercial natural gas distribution market was the largest segment of the natural gas distribution market segmented by type, accounting for 80.4% of the total in 2020 and is expected to be the fastest growing segment, at a CAGR of 10.7% during 2020-2025.
By Geography- The natural gas distribution market is segmented into
- o North America
o Western Europe
- • UK
- • Germany
- • France
- • Italy
- • Spain
- • Austria
- • Belgium
- • Denmark
- • Finland
- • Ireland
- • Netherlands
- • Norway
- • Portugal
- • Sweden
- • Switzerland
o Asia Pacific
- • China
- • India
- • Japan
- • Australia
- • Indonesia
- • South Korea
- • Hong Kong
- • Malaysia
- • New Zealand
- • Philippines
- • Singapore
- • Thailand
- • Vietnam
o Eastern Europe
- • Russia
- • Czech Republic
- • Poland
- • Romania
o South America
- • Brazil
- • Argentina
- • Chile
- • Colombia
- • Peru
- • Venezuela
o Middle East
- • Israel
- • Saudi Arabia
- • Turkey
- • UAE
o Africa
- • Egypt
- • Nigeria
- South Africa
Asia-Pacific was the largest region in the global natural gas distribution market, accounting for 28.7% of the total in 2020. It was followed by eastern Europe, North America, and then the other regions. Going forward, the fastest-growing regions in the natural gas distribution market will be Africa, and Eastern Europe, where growth will be at CAGRs of 13.7% and 13.6% respectively. These will be followed by the South America, and the Middle East where the markets are expected to grow at CAGRs of 13.1% and 10.1% respectively, during 2020-2025.
Natural Gas Distribution Competitive Landscape
Major Competitors In The Natural Gas Distribution Market are:
PJSC Gazprom
Uniper SE
Naturgy Energy Group S.A.
Centrica plc
Engie S.A.
Other Competitors In The Natural Gas Distribution Market Include:
E.ON SE
GAIL Limited
Iberdrola, S.A.
Daigas Group
Tokyo Gas Co., Ltd
Osaka Gas
Gujarat State Petronet
Indraprastha Gas
Mahanagar Gas
Petronet LNG
ENN Group
Beijing Enterprises Group Company Limited
China Resources Gas GrouP
Korea Gas Corporation (KOGAS)
GASAG
Enagás
Italgas
Eni Gas & Power
Cadent Gas Ltd
Gazprom
Novatek
Omv petrom
G.EN. GAZ ENERGIA
NaftoGaz Group
PGNiG
AGL Resources
Enbridge Inc
Sempra Energy
TC Energy Corporation
Oneok Inc
Williams Companies Inc
Dominion Energy Inc
Southern Co
Kinder Morgan Inc
Total E&P Canada Ltd
Gas Natural Fenosa
Planta Compresora Piedra del Aguila TGS
Galea LG S.A
Montevideo Gas
Sede Central de la Compania de Gas de Montevideo
Hunt LNG
Abu Dhabi National Oil Company
Integrated Gas Services Company LLC
Laheeb Gas Trading
Natural Gas Distribution Company
Aksa Cukurova Dogal Gaz Dagitim Anonim Sirketi
National Iranian Oil Company
Chevron West African Gas Pipeline Ltd
Nigeria National Petroleum Corp.
Shell Overseas Holdings Ltd
Takoradi Power Co. Ltd.
Societe Togolaise de Gaz
Societe BenGaz SA