The global centrifugal pumps market is expected to register a CAGR of around 4% over the forecast period (2020 - 2025). Factors, such as increasing exploration and production (E&P) activities in offshore deep-water oil and gas fields in the regions (like North America and Africa), are expected to increase the demand for centrifugal pumps, as it is one of the most commonly used pumps in the oil and gas industry for extraction, processing, and delivering applications.
Moreover, many countries have started phasing out nuclear and coal power generation and have started adopting natural gas-based power plants. The development of gas-fired power plants is expected to propel the growth of centrifugal pumps market, during the forecast period. However, volatile crude oil and gas price is likely to affect the centrifugal pumps market, owing to cost cutting and delayed projects by the E&P companies.
The oil and gas end-user segment is likely to dominate the centrifugal pumps market, owing to the increased use of different types of pumps in the upstream, midstream, and downstream sectors for a number of distinctly different applications.
Moreover, technological developments that have rendered the deep-water and ultra-deep-water exploration feasible and cost effective are expected to increase the oil production and can provide opportunity for the market growth, during the forecast period.
Asia-Pacific has the largest market and is expected to be the fastest growing region, owing to huge economic growth that has resulted in the development of industrial infrastructure.
Key Market Trends
Oil and Gas Segment to Dominate the Market
- Centrifugal pumps are used in the oil and gas sector to pump oil and petroleum products, liquefied gases, and other fluids during operations. The surge in development of oil and gas infrastructure is expected to provide a huge thrust to the centrifugal pump market, during the forecast period.
- The crude oil prices have recovered, but it is likely to remain stabilized and under USD 70 per barrel in 2019, which is likely to proliferate its consumption in the refinery and petrochemical sectors.
- The increasing demand for crude oil is expected to drive the demand for required infrastructure. Several downstream projects are lined up in many regions, especially in the Asia-Pacific and the Middle East, to meet the demand from consumers. Thus, this is driving the EPC market in the oil and gas sector.
- As of 2018, there were above 470 planned and announced petrochemical plants, out of which China is expected to have 240 plants with a total capacity of around 100 MTPA, by 2026. The capital expenditure for the projects in China accounted for about USD 52 billion.
- Furthermore, with the IMO 2020 regulation implemented on January 1, 2020, the increasing demand for the low sulphur fuel is likely to force major refiners to upgrade the existing infrastructure, in order to produce low sulphur fuels. With the refineries expected to go through revamp, the demand for pumps is likely to increase over the next few years and further driving the market growth.
Asia-Pacific to Dominate the Market
- The industrial infrastructure in the region is witnessing growth on account of business-friendly policies. Most of the countries in Asia-Pacific is in a growing phase, and the high rate of population growth has led to an increased requirement for water supply.
- Crude oil consumption in the region is growing at 3-4% in the past three years and accounted for around 35.2% of the global consumption. Increasing population and industrialization support the growth in consumption. Demand for centrifugal pumps, which is used to transport crude oil, has increased significantly in the past few years.
- China is expected to account for the major growth in crude oil refining, between 2019 and 2025 in Asia-Pacific. The country is expected to account for 26.8%, an increase of 1.77% from 2018, of the total refining expansion capacity in Asia-Pacific by 2025.
- Additionally, India’s refining capacity has witnessed a CAGR of 3.36%, between 2009-2010 and 2018-2019. As of August 2018, Indian Oil Corporation Limited, India’s largest refining company, aimed to increase its refining capacity from 80.7 million metric ton per annum to 150 million metric ton per annum, by 2030. Projects worth INR 320 billion are in various stages of execution.
- The oil and gas industry, apart from being a source for majority of primary energy consumption, also aids in providing raw materials for various industries, such as petrochemical, solvents, fertilizers, and many others. With the growing population and rapid urbanization, the demand for these are likely to increase promulgating the refiners to setup new plant or undergo expansion. The increase in demand is expected to drive the market during the forecast period.
The centrifugal pumps market is fragmented. Some of the key players in this market are Flowserve Corporation, Schlumberger Ltd, Baker Hughes Company, KSB SE & Co. KGaA, and Weir Group PLC, among others.
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