Oil and gas separation equipment refers to assemblies used in the oil gas industry to separate a well stream into liquid and gaseous components. The fluid carried from the subsurface environment requires some onsite treatment and pre-processing before being transported to end-user industries, including refineries or offsite processing facilities. This methodology prevents transportation errors and enables oil and gas production for end users. The oil and gas separation equipment market is on the rise due to applications in onshore and offshore facilities. In the oil and gas industry, many different configurations of separators are available, including horizontal separators, vertical separators, and spherical separators, each with a unique capability for onsite treatment. In 2018, World Oil reported an increase in the well activities of 436 wells across Brazil, which is prompting the need for pre-treatment activities and installation facilities across Brazil.
The surging demand for exploration and production (E&P) activities in the oil gas industry, along with the growing consumption of petrochemical products across emerging economies, is anticipated to propel the market share of oil and gas separation equipment. The market is projected to flourish in the wake of high yield from newly equipped hydrocarbon reserves, including Coal Bed Methane (CBM), tight gas, and shale gas in conjunction with the rising E&P practices in ultra-deep and deep subsea environments. Besides, the need for separation equipment in unconventional reserves such as the Gulf of Mexico and the North Sea in North America is foreseen to accelerate the global oil and gas separation equipment market.
Stringent regulations regarding the reuse of water produced from oil and gas fields in several applications, including irrigation, industrial use, and others, before pre-treatment are bolstering the market growth. The water generated by oil and gas industries contains TDS and, thus, causes severe environmental impacts. Rising environmental concerns, alongside government regulations regarding pipeline grade standards to maintain the optimum levels of water in oil (WIO) and oil in water (OIW) in the separation level, are expected to spur the market growth. Notable companies are increasing their service and product offerings and investing significantly in research and development (R&D) activities to drive advancements in equipment handling concerning the complexity of a wide assortment of fluids. This technological stratagem will help market players to augment their market share. Moreover, the industry is moderately fragmented with the presence of small-scale and local participants. For instance, Kuwait Petroleum Corporation (KPC) has lined investments worth approximately USD 15 billion for the duration of 2015–2020 across the oil and gas section as a part of its operational strategy.
The global oil and gas separation equipment market is expected to grow at a CAGR of more than 4% during the forecast period, 2019–2026.
Three-Phase Separators Outperform Two-Phase Separators on the Basis of Optimum Pressure and Liquid Sealing
The three-phase separators segment holds the largest market share in the oil and gas separation equipment market on account of the use of these separators in several functions required for the treatment of oil, gas, and water in the separation unit. Three-phase separators offer advantages over two-phase separators in terms of optimum pressure and liquid sealing. Further, three-phase separators help with the quick and accurate separation measurement of oil, gas, and water. Rising production associated with oil and gas wells, along with government efforts regarding water treatment, is set to drive the market growth. The burgeoning oil production from coal bed methane (CBM) and shale gas is also anticipated to accelerate demand.
Scrubber Segment to Witness Rapid Growth
Scrubbers are generally used in gas treating equipment for upstream production and in assemblies containing dry desiccants or mechanical equipment, including compressors. They register strong demand on account of their use in removing the traces of liquid droplets from gas streams to protect downstream equipment from failure and damage. Stringent government norms for maximum suspended particulate matter content in pipeline fluids and maintaining flare gas quality will increase the productivity of scrubbers in the global oil and gas separation equipment market.
North America Dominates the Global Oil and Gas Separator Equipment Market
North America dominates the global oil and gas separation equipment market, with the U.S., Canada, and Mexico driving the majority of the demand. The demand for oil fields in North America is on the rise on account of the growing number of mature fields and increasing energy consumption. Recently, the North America oil and gas industry invested significantly in both onshore and offshore reserves. The surging CBM and shale gas production in the region is also bolstering the oil and gas industry. Besides, burgeoning offshore E&P activities, coupled with new exploration in the Bakken oilfield, is expected to boost market growth for the next five years. According to BP statistical review, oil consumption across the U.S. rose by 721 million barrels per day in 2017, as compared to 2016.
Unexploited Oil and Gas Reserves and the Discovery of Shale Gas Well in China to Encourage Market Growth in Asia-Pacific
Asia-Pacific holds the largest share of the oilfield equipment market on account of the increasing E&P activities across China, India, Indonesia, Taiwan, Malaysia, and Vietnam. Governments in the region are striving to explore new oil and gas reserves by providing financial aid in terms of tax benefits and FDI, particularly in India and China. A large number of unexploited oil and gas reserves, alongside the discovery of shale gas well in China, is projected to boost the global oil and gas separation equipment market.
The Middle East Holds a Moderate Share in the Global Oilfield Equipment Market
The Middle East holds a considerable share in the global oil and gas separation equipment market due to the existing oilfields in Kuwait and the United Arab Emirates (UAE), among other countries. In 2017, the Middle East accounted for more than 30% of the share and had 385 drilling rigs. The region is mounting up its share with continuous investment, comprehensive exploration and production activities on conventional and unconventional wells, reinforcing its pre-eminent position in the oil and gas industry, and maintaining its spare oil production capacity. In 2017, Saudi Aramco, the Saudi Arabian oil company, expanded its global vertical with other regional players such as NOV and Schlumberger and received two contracts from Schlumberger for drilling rigs and entered in a joint venture with NOV.
The market is competitive in nature, and a small number of oilfield equipment market participants have a high level of dominance. The most notable market participants are Alfa Laval, Worthington Industries, Burgess-Manning, Inc, ACS Manufacturing Inc., ATLAS Oil & Gas Process Systems Inc, Godrej Process Equipment, Honeywell, HAT International, Valerus, Doyle Dryers LLC, eProcess Technologies Pty. Ltd, and Fenix Process Technologies
By End-Use Industry