The Middle-East and Africa compressor market is expected to rise at a CAGR of approximately 3.1% during 2020 - 2025. Factor such as an increase in the gas production of the region is likely going to drive the Middle-East and Africa compressor market. However, increasing the installation of renewable energy sources to provide power, that does not use compressors are expected to restrain the Middle-East and Africa compressor market.
- Due to the rapidly growing refining capacity of the region and extensive usage of compressors in refineries, the oil and gas industry is expected to be the largest segment for the Middle-East and Africa compressors market during the forecast period.
- In recent years several new oil and gas fields were discovered in the region, such as in 2019, a new oil field was found in Khuzestan province of Iran, which is expected to have 50 billion barrels of oil. The newly discovered fields and their developments are likely to create several opportunities for Middle-East and Africa compressor markets in the future.
- Due to its increasing usage of gas for power generation over oil, Saudi Arabia is expected to be the fastest-growing market for compressors in Middle-East and Africa. In 2019 the country produced about 57.6% of the total electricity from the gas, which is likely to increase the use of compressors in the power industry.
Key Market Trends
Oil and Gas Industry Segment Expected to Dominate the Market
- Compressors are mechanical devices that increase the pressure of a gas by reducing its volume. They are widely used throughout the oil and gas industry. The upstream, midstream and downstream sectors of the oil and gas business require compression for numerous applications, such as transmission, storage, gas gathering, gas lift, gas injection, flash gas compression, and refrigeration.
- Countries in Middle-East and Africa have changed their spending pattern and started to invest a significant amount of money on their crude oil and natural gas refining capacity. These refining facilities use compressors to pressurize gas and are likely to drive the market.
- In 2019, the total liquefied natural gas (LNG) exported from the region was 190 billion cubic meters (bcm), which was higher than the region exported in 2018, 179.5 bcm. The rapid growth in the exports and transportation of LNG within the nations is likely to use compressors for the conversion of gas into LNG. It is expected to create a positive impact on the compressor market in the region.
- In March 2020, Eni and Sonatrach completed the construction of the gas pipeline connecting Bir Rebaa Nord (BRN) and Menzel Ledjmet Est (MLE) fields in the Berkine Basin, in the south-eastern part of Algeria. The pipeline is 185 km long and with a transport capacity of 7 million standard cubic meters of gas per day. The pipeline is expected to use compressors for the transportation of the gas, thus likely to drive the market.
- The downstream sector in the United Arab Emirates is undergoing a rapid expansion of new mixed-feed naphtha cracker, and investments in new refinery capacity. In March 2018, two contracts about the refinery complex in Ruwais were awarded by Adnoc to Samsung Engineering Co. Ltd. Such projects supplement the demand for centrifugal compressors in the United Arab Emirates.
- Hence, owing to the above points, the oil and gas industry is likely going to dominate the Middle-East and Africa compressor market during the forecast period.
Saudi Arabia Expected to be the Fastest Growing Market
- Saudi Arabia, due to its rapid increase in energy demand and industrialization, is likely to be the fastest-growing market for the compressor in Middle-East and Africa. Moreover, the growth in the share of natural gas in power generation is driven by low natural gas prices and an increasing number of such plants, which is likely going to drive the compressor market.
- The country plans further to improve its domestic manufacturing sector, particularly steel manufacturing. The steel sector of Saudi Arabia is also witnessing massive impetus from surging construction activities in the country. The development of steel infrastructure is likely to require an increase in uptake of air separation units, resulting in an increased demand for centrifugal compressors in the country.
- In Saudi Arabia, in 2019, gas production was 113.6 billion cubic meters (bcm), which was higher than its production in 2018, 112.1 bcm. Moreover, the state-owned company Saudi Aramco has set a target of doubling its natural gas production by 2030. This is expected to provide a vast opportunity for the compressor market for both gas processing and transportation.
- In 2019, McDermott International, Inc announced that Saudi Aramco had awarded it a contract for its Marjan Field. The engineering, procurement, construction, and installation (EPCI) contract includes the development of oil and gas separation plants offshore. The deal was worth USD 1.5 billion and is likely to use compressors for gas after its separation.
- In 2019, Saudi Aramco awarded Saipem to expand Berri Field production by 250000 barrels per day. The planned facilities will, upon completion, include a new gas-oil separation plant in Abu Ali Island to process 500,000 barrels of Arabian Light Crude Oil per day, and additional gas processing facilities at the Khursaniyah gas plant to process 40,000 barrels of associated hydrocarbon condensate. Such developments in the country are likely to use an extensive number of compressors when dealing with gas transportation.
- Hence, owing to the above points, Saudi Arabia is expected to be the fastest-growing market for the Middle-East and Africa compressors during the forecast period.
The Middle-East and Africa compressor market is moderately fragmented. Some of the key players in this market include Atlas Copco AB, Siemens AG, Mitsubishi Heavy Industries Ltd, Kaeser Kompressoren GmbH, and Aerzener Maschinenfabrik GmbH.
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