Cryogenic Valves Market

Market Overview

The global cryogenic valves market size was worth USD 2.4 billion in 2022. It is estimated to reach an expected value of USD 4.1 billion by 2031, at a CAGR of 6.5% over the forecast period (2023-2031). The Cryogenic Valves market is driven by rising demand for liquefied natural gas (LNG), growing applications in industries such as healthcare, aerospace, and energy, and ongoing advances in cryogenic technology.

Applications requiring extreme cold employ cryogenic valves. Most oil and gas sectors employ a cryogenic temperature range with a -238° F starting point. Cryogenic valves may operate in pressures as low as -320°F and as high as 750psi. Cryogenic valves securely and effectively store and transfer cryogenic gasses in liquid forms, such as methane and liquefied natural gas. In temperatures as low as 196°C, they are intended to provide suitable integrity pressure protection and emergency shutdowns. Growing demand from Oil & gas industry coupled with rising chemical and pharmaceutical industry applications in the global market is expected to drive the market studied.

Market Dynamics

Global Cryogenic Valves Market Drivers

Increasing Demand from Oil & Gas Industry

Cryogenic valves are widely used across various domains in the oil and gas industry, such as the upstream, midstream, and downstream sectors. The flow of natural gas and crude oil from high-pressure injection systems to choke valves and blow-out preventers at the top of wells is regulated by valves in the upstream segment. New-found sources of oil and gas, such as tar sands and shale formations, have created the demand for cryogenic valves, as they require placing oil and gas into pipelines by compressing it to high pressure and low temperature before they are taken to processing facilities. In the midstream sector, oil and gas resources are stored and transported from distant sources, such as deepwater fields in Alaska's tundra or the North Sea, where shallow temperatures are needed to convert natural gas into natural gas liquids (NGL), which are then transported from remote gas fields to the market for gas consumption. For loading/unloading terminals, storage tanks for oil and gas products, and cryogenic temperatures, unique cryogenic valve designs are required. This creates extra opportunities for valve suppliers.

In the downstream segment, valves provide solutions during the refining process of crude oil, as well as the sale and distribution of refined products (i.e., gasoline, fuel, asphalt, etc.) and natural gas. The valve requirements for the downstream market include higher pressure designs, metal-seating technology, and metallurgies to accommodate the temperatures at which modern refineries operate. The increasing demand for oil and gas has increased the drilling activities worldwide to discover new fields. With such establishments of newly discovered oil resources, the demand for these cryogenic valves is also increasing. Moreover, the recovery of oil production activities is expected to drive market growth.

Growing Application in the Chemical and Pharmaceutical Industry

The pharmaceutical industry also utilizes cryogenic technology. The drugs and vaccines are manufactured and stored at very low temperatures. Recently, the spread of COVID-19 and its vaccine delivery's demand for lower storage and shipping temperatures have pulled the investments by the governments in developing the cryogenic cold chain in the pharmaceutical sector.

According to IQVIA Institute projections released in March 2020, global total pharmaceutical sales are expected to reach USD 1.58 trillion by 2024. By 2024, experts predict five of the top 10 best-sellers may be drugs requiring 2–8°C cold-chain storage and handling. In 2019, the FDA's Center for Biologic Evaluation and Research (CBER), which handles the review of vaccines and blood products, approved 22 licenses for new biologic products, 21 of which require cold-chain handling.

Cryogenic valves used in the biotech and pharmaceutical industries are also specially created and tested to function in various sanitary and clean steam applications at low temperatures. Hence, the growing applications in the chemical industry and the pharmaceutical sector are driving the demand for cryogenic valves.

Global Cryogenic Valves Market Restraint

Safety Concerns Regarding Operation of Liquefied Gases

Some of the issues that restrain the performance of the cryogenic valves, which may lead to leakage and hamper the safety concerns of the process, are as follows: - Pressure issues: - The accumulation of pressure is observed in the routine handling of cryogens. This pressure is due to environmental heat gain and consequent vapor formation. The high-pressure buildup may lead to the failure of valves. Efficiency issues: - The temperature difference generates a heat flow from a warm to a cold area. It impairs the correct functioning of the valve. It also decreases the efficiency of the system under extreme circumstances. This situation is of particular concern if ice forms at the warm end. 

Furthermore, liquified gases, like nitrogen, need to be highly taken care of, as liquid nitrogen, when returned to the gaseous state, can displace oxygen from the air and create an oxygen-deficient atmosphere under the right conditions. The high concentrations of nitrogen reduce the breathable oxygen in the air. The liquid nitrogen vapor can rapidly freeze skin tissue and eye fluid, resulting in cold burns, frostbite, and permanent eye damage even by brief exposure.

Global Cryogenic Valves Market Opportunities

Upcoming Demand from LNG Gas Sector

Cryogenic valves are widely used in liquefaction plants, LNG transport, and regasification plants, which include compressors, expanders, heat exchangers, pumps, LNG tankers, LNG storage tanks, and pipelines for protection of isolation, control, or protection of the equipment. Global reserves of natural gas are abundant, with significant new shale gas discoveries announced in recent years, and more discoveries are likely to be made in the coming years. China's LNG receiving capacity is expected to rise 8.6 %/year to 100 MMT by 2025. According to the National Development and Reform Commission (NDRC), China's oil and gas pipelines were estimated to total 105,000 m in 2020 and may reach 240,000 km by 2025.

As of February 2020, the United States had numerous oil and gas projects, which are still in the development phase in the country present. The country's ten most significant projects under construction have a combined value of over USD 207 billion. Among these top 10 projects, nine involve the production or export of LNG, which are likely to be complete over the coming years and may create the opportunity for equipment, like cryogenic valves, from such upcoming investments. Hence, the growing investments in developing economies and steady growth of LNG capacity in developed nations will likely create an opportunity for cryogenic valves over the coming years.

Regional Analysis

By Region, the global cryogenic valves market is segmented into North America, Europe, Asia-Pacific, South America, and Middle East & Africa.

Europe dominated the market and is estimated to register a CAGR of 4.5% during the forecast period. Germany is the largest consumer of crude oil and the second largest consumer of natural gas in the European Union. The imports account for about 98% of crude oil and 95 % of natural gas consumption in the country. Furthermore, about 1.93 million metric tons of crude oil was produced in the country compared to 2.07 million metric ton in 2018 and 2.22 million metric tons in 2017. While Germany has minimal domestic oil production equivalent to around 2% of oil consumption, the country has the second-largest refining capacity of 2.1 million b/d of crude oil in the European Union. The refinery throughput has been decreasing over the past few years and is likely to impact the market growth. However, the reliability of fossil fuels and the growing demand for petroleum and related liquids is expected to drive the market studied. 

Asia-Pacific is the second largest region. It is estimated to reach an expected value of USD 745 million by 2031 at a CAGR of 5%. The food processing industry in China is moving toward maturity, witnessing moderate growth. Processed and packaged frozen foods are increasingly becoming popular, especially dairy, baby food, and confectionery products, which stand to be the driver for the food processing industry. While in the beverage industry, the trend for consuming healthy, natural, and convenient ready-to-drink smoothies, juices, and yogurts has been emerging. Moreover, processed fruits, pork, dairy, and some specialty grains and legumes are some of the food products that may drive the food processing industry's growth in the country. Thus, the food and beverage industry has been offering opportunities for investment, which may create demand for new equipment used in such plants and offer opportunities for the market. For instance: In May 2020, Nestle decided to make a series of investments to strengthen its footprints and enhance its product portfolio in the country. Nestle plans to invest about USD 103.4 million in capacity expansion of its existing pet food plant in Tianjin and its first production facility in Asia for plant-based products. In addition, the company plans to make additional investments into the confectionery business, which may include the upgradation of the production line of Nestle Chengzhen Wafer and Tianjin Nestle Quality Assurance Center. Moreover, the maturing food processing industry in the country is expected to increase the demand for cryogenic valves over the forecast period.

North America is the third largest region. The United States is among the leading countries globally in the exploration of unconventional crude oil reserves, indicating a vast opportunity for cryogenic valves in the country. The amount of oil produced from hydraulically fractured wells has been increasing significantly, as compared to the oil produced from conventionally fractured wells. The medical device companies in the United States are highly regarded globally for their innovative and high-technology products. The medical device industry relies on several industries where the United States holds a competitive advantage, including microelectronics, telecommunications, instrumentation, biotechnology, and software development. Hence, such market scenarios in these end-user industries are anticipated to propel the market growth in the country over the forecast period. However, the United States has turned out to be the global hotspot for COVID-19, and the rapid spread of any threat from the virus in the country may take a toll on the economic growth, output, and jobs in the country, subsequently affecting the demand for the market in the future.

Segmental Analysis

The global cryogenic valves market is segmented by product type, gas, end-user industry, and region. 

By Product Type, the global cryogenic valves market is segmented into ball valve, check valve, gate valve, globe valve, and other product types. The ball valve segment dominated the market and is estimated to register a CAGR of 4.8% during the forecast period. In extremely low temperature and cryogenic applications, such as industrial plant gases, mental and steel services, mining, pharmaceuticals, sewage, water treatment, CO2 injection/mixture, cooling, and oil/gas applications, as well as liquified natural gas (which is quickly evolving into a superior alternative energy source), cryogenic ball valves are frequently used. Ball valves can be more costly upfront but save long-term costs through enhanced valve performance and longevity. Flange and welded configurations are mostly used for cryogenic piping connections, although customer preference typically determines the type used. This is expected to fuel the need for ball valves.

By Gas, the global cryogenic valves market is segmented into liquified natural gas, liquid nitrogen, hydrogen, oxygen, and other gases. The liquified natural gas segment dominated the market and is anticipated to register a CAGR of 4.6% during the forecast period. Unlike many applications of cryogenics, the motivation for using LNG is not the provision of lower temperatures, instead the substantial volume reduction (more significant than a factor of 600) between natural gas at atmospheric pressure and temperature and LNG. Volume reduction allows for the efficient transport of large amounts of natural gas. With regular shipments between producing and consuming nations, such as the Middle East, Japan, North Africa, and Europe, the natural gas business commonly uses LNG for marine transport. According to Shell's LNG Outlook, the global demand for LNG increased by 12.5% to 359 million tons in 2019. This significant increase supports LNG's expanding role in transitioning to a lower-carbon energy system. Thus, with the increase in LNG production, consumption, and transportation, the demand for cryogenic valves is also expected to increase during the forecast timeline.

By End-User Industry, the global cryogenic valve market is segmented into chemicals, oil and gas, energy and power, food and beverage, medical, and other end-user industries. The oil and gas segment dominated the market and is estimated to register a CAGR of 4.7% during the forecast period. The global oil and gas industry holds enormous potential to create demand for cryogens, which is projected to drive the consumption of valves simultaneously in the years to come. This is because numerous oil and gas projects are already lined up for development, while some are still in the planning stage. In Asia-Pacific, countries such as China, India, and Australia are planning to increase oil and gas production, for which the countries were observed investing in oil and gas infrastructure development. In North America, Canada and the United States are expected to drive the demand for pipes, as there are various projects under development and in the planning stage, which are projected to be developed within the forecast period. Besides, Mexico holds deepwater tenders for about 29 blocks, for which the country is likely to start development within the forecast period. Thus, all such countries are expected to significantly fuel the demand for cryogens, which is further anticipated to drive the consumption of valves during the forecast period.

Recent Developments

• November 2022 - At the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2022, Baker Hughes and PETRONAS inked a memorandum of understanding (MOU) to work together on industrial and oil and gas artificial intelligence (AI) technologies to advance the sustainability goals of the energy giant.
• November 2022 - The Baker Hughes Foundation has announced a $350,000 grant to One Tree Planted in support of global reforestation initiatives. Baker Hughes conducts business in the Americas, Australia, Malaysia, England, and Indonesia.