The market for hydraulic fracturing fluids in Europe is expected to grow at a CAGR of more than 0.66% during 2020 - 2025. The increase in demand for oil and gas and the countries trying to reduce their dependence on imports are the factors that have led to some growth in the sector. However, the impact of hydraulic fracturing on the environment and technological constraints have impeded much growth in the industry. Many countries, including the Netherlands and Ireland, have banned the process of hydraulic fracturing, which has also caused concerns in the hydraulic fracturing market.
- The hydraulic fracturing industry is a controversial topic in the countries of Europe due to its alleged effects on the environment, with the United Kingdom banning the practice in England, in 2019.
- The pipeline being built through the Baltic Sea is expected to add to the demand for Russian gas. An increase in demand may lead to companies to invest in unconventional resources, which can become an opportunity for companies in the oil and gas industry.
- Russia is expected to dominate the market over the forecast period owing to the presence of economically feasible shale reserves in the country.
Key Market Trends
Natural Gas to Witness a Significant Growth
- Natural gas is a cleaner alternative to oil and its demand is likely to increase, considerably in the forecast period. New projects of natural gas-powered plants, LNG bunkering, and district heating are expected to increase the demand for natural gas in Europe.
- The only countries that are expected to use hydraulic fracturing in the European continent are the United Kingdom, Russia, and to some extent, Poland. Technological constraints in Poland, economic feasibility issues in Russia, and environmental concerns in the United Kingdom have impeded growth in the sector.
- No massive expansion is expected in the shale gas market in the forecast period, but trickle growth may follow in the sector when compared to oil.
- Hence, shale gas production is expected to increase through hydraulic fracturing, but a lot is dependent upon the price of shale gas and technological constraints in the production of shale gas.
Russia to Dominate the Market
- Russia has significant shale oil and the biggest potential in shale gas reserves. Bazhenov Shale is known to be the biggest shale play in the world. As cheaper sites are abundant, the development of shale gas in Bazhenov is expected to be started in 2024.
- The pipe being built through the Baltic Sea (Nord Stream 2) is expected to add to the demand for Russian gas. As of now, the pipeline must go through several countries, which increases the cost of the overall gas, thereby reducing the profit margin for the Russian corporations.
- In 2019, Rosneft and Equinor signed an agreement to develop the shale oil fields in the northern region of Russia. Natural gas is produced in the Russian Federation is expected to meet most of its requirements as well as the international agreements it has. Suppose significant demand is not created in the global market. It seems difficult that the country may invest in the hydraulic fracturing market. However, Gazprom is looking for feasibilities in the shale regions of the country for more accurate measurements and economic viability.
- Hence, Russia is expected to dominate the market due to an increase in investment in the hydraulic fracturing sector and private sector push to discover new avenues of growth in the oil and gas industry.
The Europe hydraulic fracturing fluids market is moderately fragmented. Some of the key players in this market include Cuadrilla Resources Ltd., PJSC Rosneft Oil Company, PJSC Gazprom, PAO NOVATEK, and IGas Energy Plc.
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