CNG vehicles powering global markets for natural gas storage

LNG is emerging as for world natural gas expansion because of flexibility

A new study suggests the market for compressed natural gas will triple by 2020 thanks to demand for CNG vehicles, which will in turn spur growth of the global natural gas storage market.

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Natural Gas Semi-truck.

BCC Research says the global natural gas storage market should reach $796.4 billion in 2020, up from $562.2 billion in 2015, registering a five-year compounded annual growth rate of 7.2 per cent for the period.

Underground gas storage, as a segment, should grow at a five-year CAGR of 2.9 per cent to reach $430.5 billion in 2020, from $374.2 billion in 2015. The liquefied natural gas (LNG) tanker trade segment is expected to reach $197 billion by 2020, reflecting a CAGR of 10.3 per cent, says the report Global Markets and Technologies for Natural Gas Storage.

“Driven by more stringent emissions requirements, increased natural gas extraction through hydraulic fracturing, and a lower total cost of ownership, interest in NGVs is growing, thus increasing demand for compressed natural gas storage in the vehicles and in refueling stations to serve these vehicles,” said BCC Research analyst Edward Gobina.

The consumption of natural gas varies day-to-day and month-to-month. Weather and the varying demands of electric power generation translate into usage fluctuations. Seasonally the fluctuation is as much as 50 per cent, and short term it can be even more variable.

Exact timing, location and volume of peak demand are unpredictable. Because natural gas is not produced in a way that corresponds to these fluctuations, surplus gas is pumped during slumps in usage into numerous storage facilities (underground gas and LNG) for use during inevitable surges in consumption.

In international trade, LNG storage provides the vital link between gas producers and consuming countries. This allows continuous service even when production or pipeline transportation services cannot meet demand.

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Louisiana LNG plant

Although still far from being a commodity, LNG is emerging as an essential vector for world gas expansion, according to BCC Research.

The flexibility it offers in terms of supply is of prime importance for future market equilibrium.

The greatest challenges in the CNG vehicle market penetration are the availability of refueling infrastructure, raw material prices and the high price of composite tanks.

However, research and development of new products is creating more sustainable products and enhancing the competitive position in the market for companies involved in CNG storage tank production, BCC Research said in a press release.

“Current NGVs, like their internal combustion engine counterparts, are undergoing significant technical changes with an aim to reduce costs reduction and improve overall efficiency. Component manufacturers and suppliers are developing direct injection systems and storage tanks that will enable more universality with most generations of fossil-fueled engines,” said Gobina.