The global butane market stood at about $60 billion in 2015. In volume terms, global demand was nearly 138 million tons during the same year. This market is anticipated to expand at more than 2.7 percent from 2016 to 2024, according to market research company Hexa Research of Felton, Calif.
What is Butane?
An easily liquefiable gas, butane is a highly flammable, colorless gas and is odorless. It is a byproduct obtained during the refining process of crude oil. Crude oil that is extracted from reservoirs is transported to refineries that derive products such as jet fuel, diesel and gasoline. It is known as normal or n-butane when the carbon atoms are lined in a straight chain. However, when they are branched, the gas is called isobutane.
Robust demand for Liquid Petroleum Gas (LPG) may favorably impact the industry, according to a report by Hexa. Higher standards of living and rising disposable incomes can impel the market until 2024. Most of the butane manufactured globally is used in LPG. When mixed with propane in a certain ratio, butane is often referred to as LPG.
Governments across Asia Pacific and Africa encourage the use of LPG. This is done in order to reduce carbon footprints and also to control the emission of carbon dioxide (CO2). LPG emits close to 33 percent less CO2 when compared with coal. It is used primarily in residential, commercial and agricultural applications. It’s also used in automobiles.
A major problem facing the global butane market is the issue of ground water contamination. This is due to the leakage of methyl tert-butyl ether (MTBE) that over a period of time affects ground water. Rising health hazards because of inhalation of butane has led to the application of rigid regulations in the global market.
Butane Market Applications Outlook
The global butane market is categorized into applications and regions. Based on applications, the market is divided into refineries, petrochemicals, LPG, and others. Chemical and petrochemical, residential and commercial, auto-fuel, refinery, industrial, and others are the sub-segments of LPG. With market shares exceeding 66.6 percent, LPG led the industry in 2015, according to Hexa.
Ongoing industry trends suggest that residential or commercial applications may capture more than 50 percent of the overall market by 2025, Hexa researchers said. Isobutane can replace hazardous chlorofluorocarbons (CFC) that are used extensively in products, like propellants, deodorants and refrigerants.
The petrochemicals segment is anticipated to register the highest growth rate during the forecast period. Automobile fuel may exhibit substantial growth because of strict emission norms and the widespread adoption of eco-friendly vehicles.
Butane Market Regions Outlook
On the basis of regions, the worldwide butane market is segmented into North America, Central and South America (CSA), Europe, Asia Pacific, and Middle East and North Africa (MENA). Asia Pacific was estimated at more than $22 billion in 2015. It can grow at an annual rate of 4.2 percent through 2024, according to Hexa. Subsidies and governmental regulations pertaining to multiple LPG connections will positively affect the growth of the LPG industry, Hexa said.
Ample supply of shale gas in the U.S. can meet the demand for natural gas liquids, thereby stimulating the global market. To reduce groundwater contamination, the Environmental Protection Agency (EPA) prohibits the use of MTBE for blending gasoline. The MENA butane industry contributed to more than 18 percent of total volumes in 2014. Greater use of LPG as a feedstock substitute for crude oil and natural gas in chemical industries and in refineries can increase the demand for butane in the region.
Butane industries in Nigeria, United Arab Emirates (UAE), Saudi Arabia, and Qatar may expand significantly during the forecast period.
Prominent companies operating in the global market are Chevron Corp., Exxon Mobil Corp., British Petroleum (BP), and ConocoPhillips Inc. These industry participants “give a lot of importance to the development of bio-based alternatives for producing niche products. They also lay emphasis on product innovative as a means to gain a higher market shares,’’ according to Hexa.Follow & Contact Tank Transport Trader: