A liquefied petroleum gas (LPG) tanker is a gas transporter that transports massive volumes of petroleum gases. It is made up of separate reservoirs stacked in cargo holds. Small-pressurized tanks, shielded or refrigerated seagoing tanks, and semi-pressurized tanks are the most regularly used LPG tankers. Liquefied petroleum gas is a cleaner fuel compared to coal. Hence a shift toward LPG as a domestic fuel is expected to drive the demand for the transportation of LPG. Concurrently, the need for liquefied petroleum gas for HVAC and cooking applications is on the rise, generating increased demand for transportation and safe storage of liquefied petroleum gas, leading to high demand for LPG tankers in the upcoming years.
Due to the growing trafficking of liquefied petroleum gas throughout multiple regions, the international demand for liquefied petroleum gas tankers is expected to rise rapidly throughout the forecast period. As a possible consequence of volatile crude oil prices and advancements in hydraulic fracturing and horizontal drilling procedures, key actors have changed their attention to oil and gas generation from shale rock. Consequently, an expansion in shale gas commercial relations between the United States, Japan, and India from 2020 to 2027 is projected to raise the market for LPG tankers.
Due to its non-toxic, cost-effective, clean, handy, approachable, and portable characteristics, LPG is used in motor fuel, business and residential purposes, refinery, and petrochemical. Factors such as shale gas capacity expansion from new supplies, increased global gas trade, and continued use of liquefied petroleum gas as a fuel for cooking are all supporting the industry's growth for liquefied petroleum gas tankers.
The substantial growth of the oil & gas industry and increasing shale gas production across the world are significant factors contributing to a positive outlook for the LPG tanker market. Numerous technological advancements in LPG tankers, such as the bow wave resistance systems on the hull of the tanker and the integration of semi-membrane tanks, are opening new avenues for the market.
Due to the latest emission regulations, LPG tanker manufacturers have developed engines with higher efficiency. Other factors such as favorable government policies and extensive infrastructural developments, especially in emerging economies, are expected to drive market growth and create more opportunities.
The shutdown of manufacturing plants had a significant influence on the production chain of the LPG and auxiliary industries, particularly in the Asia Pacific, which was the epicenter of the COVID-19 and among the most hit areas in the world by the pandemic. COVID-19 caused a significant slowdown in the industrial and energy & power industries worldwide. Furthermore, domestic and international restrictions on travel, quarantine regulations, and lockdowns prolonged the delivery of LPG cargoes.
Due to constrained manufacturing in nations severely hit by COVID-19, LPG producers faced obstacles and shortfalls of LPG. End consumers and service vendors in affected regions have problems obtaining and supplying LPG. Production interruptions also contributed to price increases in some world regions, albeit for a brief time in 2020. Although most of the world's major LPG-consuming nations have government-regulated LPG pricing, the sudden and acute scarcity severely damaged them.
The expansion of the COVID-19 hampered the growth of the worldwide LPG tanker industry due to lower operational costs by end-users and disruptions in LPG availability due to manufacturing delays and logistic concerns. Furthermore, LPG producers have taken additional steps to provide their services to end customers who have long-term contracts with service providers. Currently, merchants prefer digital tools and adhere to social distancing conventions. They employ protective kits during onsite assessments or when providing maintenance services to end-users on an as-needed basis.
However, global mobility and economic activity are expected to expand throughout time. This will increase industrial and commercial consumption for alternative energies, resulting in increased demand for LPG from end-users to assure the continuity of their individual manufacturing units' operations.
The LPG tanker market has been divided into five regions: North America, Central and South America, Europe, Asia-Pacific, and the Middle East and Africa. The European LPG tanker market will expand rapidly as the region undergoes significant technical innovation. The European LPG tanker market was valued at USD 52 million in 2021. Germany, the United Kingdom, Spain, Italy, France, and Russia compose the European market. Germany, France, and the United Kingdom have been highlighted as essential contributors to developing the region's LPG tanker market, owing to their huge consumer population and the growing number of manufacturers and distributors of LPG and LPG tankers.
Asia-Pacific accounted for the second-largest share of 27% in the global LPG tanker market and was valued at USD 49 million in 2021. China, Japan, and India dominate the market in Asia Pacific. More than 70% of the world's largest LPG tankers are built-in Asia-Pacific, notably in South Korea and Japan. Asia-Pacific is primarily made up of emerging economies that are rapidly industrializing. The demand for LPG tankers is likely to rise as the usage of LPG spreads beyond domestic to industrial and commercial applications. The rapid rise of industry in China, Japan, and India has fueled the demand for LPG tankers in these countries.