Global Small Scale LNG Market - 2024-2031

Report Overview

The Global Small Scale LNG Market size was worth US$ 46.25 billion in 2023 and is estimated to reach US$ 120.61 billion by 2031, growing at a CAGR of 13.77% during the forecast period (2024-2031).

Liquefied natural gas (LNG) is a type of natural gas converted to a liquid state through a process known as liquefaction. The usage of LNG is widespread, which is projected to drive demand for small-scale LNG over the forecast period. The cleanest fossil fuel is natural gas, emitting the fewest emissions.

Due to strong restrictions against climate change, a widening supply and demand mismatch, growing awareness about cleaner and sustainable energy sources and decreasing fossil resources, the energy sector faces challenges. Because of its large volume, natural gas has storage concerns. For the convenience of transportation, natural gas is transformed to liquid form at liquefaction facilities and the liquefied gas is converted to gas at terminals of regasification.

Market Dynamics

The growing demand for small-scale LNG in various end-use applications such as heavy-duty vehicles, marine transport and industrial & power generation is driving demand for small-scale LNG. However, hefty transportation costs are projected to limit market expansion.

Rising number of LNG-fueled fleet

The rising energy demand has recently increased the need for liquefied natural gas (LNG), resulting in increased LNG output (LNG). In addition, numerous distant locations lack electricity and government measures to improve rural electrification have increased the demand for liquefied natural gas in recent years.

Furthermore, due to the increased need for energy due to industrialization and rising household needs, the global market for small-scale liquefied natural gas is predicted to grow (LNG). One of the primary reasons driving the market's growth is rapid industrialization, accompanied by increased demand for energy-efficient and cost-effective energy sources. Furthermore, the transportation industry's widespread product uptake is boosting the economy.

Energy-cost advantage of LNG and its usage in the transport industry

Liquefied natural gas (LNG) is also used for cooking and heating. The development potential for the small-scale liquefied natural gas (LNG) market is predicted to increase throughout the projection period due to the rising population. Furthermore, in the projection year, price reductions in natural gas and price fluctuations in crude oil due to overproduction of crude oil are likely to stimulate the expansion of the small-scale liquefied natural gas (LNG) industry.

Commercial vehicle manufacturers are moving away from traditional fuel sources in favor of LNG, which has full combustion and produces fewer carbon emissions. Following it, the growing demand for power generation in underdeveloped and isolated places worldwide boosts the market's prospects. Another factor driving development is the rising usage of LNG as a ship fuel rather than heavy fuel oil, marine gas oil & diesel oil.

LNG shipping costs are high.

LNG shipping prices are the most volatile cost component in the whole LNG supply chain and they have a significant impact on LNG supply competitiveness. Even if more ships are needed to fulfill increased demand, LNG is unlikely to generate considerable additional maritime congestion until more rigorous safety and security requirements for handling LNG carriers are implemented. Skilled personnel shortages are anticipated to be a problem for the ships.

Market Segment Analysis

By application, the small-scale LNG market is segmented into heavy-duty vehicles, transport, industrial & power and others.

Transport to hold the lions' share.

LNG is largely utilized to fuel trucks and ships, owing to its cost-effectiveness and environmental advantages over diesel and fuel oil. LNG can increase the life of a vehicle by up to three times because it is non-corrosive and non-toxic. Furthermore, because LNG has a very low boiling point, just a small amount of heat is necessary to convert it to a gaseous state at high pressure, requiring little mechanical energy. As a result, LNG is a good transportation fuel.

Handling LNG is a difficult undertaking because even a small fluctuation in temperature can cause the fuel to boil and vaporize, resulting in fuel waste. As a result, passenger cars are much less viable than heavier vehicles like commercial trucks. The use of LNG in the transportation sector has been restricted. LNG as a transportation fuel is gaining popularity around the world. LNG-powered trucks have already begun to be deployed in China, U.S. and Europe, mostly for long-distance freight transport.

Government policies and laws on decarbonization and emission control, such as China VI and the European Green Deal, are largely to blame. The European Green Deal, launched by the European Commission in 2019, is a package of policy initiatives to make Europe carbon-neutral by 2050. The regulations stress the use of LNG as a fuel for trucks and marine vessels and they briefly highlight the role of LNG in achieving the goal. According to SEA-LNG, 75 LNG-fueled ships were in service as of 2020, with another 155 LNG-fueled ships.

The International Maritime Organization (IMO) began a new law in January 2020, imposing a global sulfur cap of 0.5% on marine fuels. Compared to traditional petroleum-based marine fuel oils, LNG has become a more realistic alternative as a marine fuel because it emits about 90% less NOx, virtually no SOx and virtually no particulate matter. As a result, LNG will play a critical part in this clean air drive. It will also have a major positive impact on the small-scale LNG business.

Market Geographical Share

Rising implementation of small-scale LNG in Asia-Pacific.

Asia-Pacific has been a global leader in implementing small-scale LNG projects in recent years. Small-scale LNG (SSLNG) has grown in popularity as natural gas demand has surged in China, India, Singapore, Japan and others. Domestic production and import via pipelines and LNG terminals are part of China's natural gas market. The primary reason for the expansion of small LNG facilities in China is the rise in the number of LNG trucks due to the higher fuel price than natural gas.

The LNG bunkering facilities in Singapore's ports drive the small-scale LNG economy in the city-state. Singapore is a hub of one of the world's most important trading ports and is a global leader in international marine shipping. The Pacific Emerald, an LNG-fueled oil tanker, was bunkered in Singapore for the first time in May 2021 by FueLNG and the Maritime and Port Authority of Singapore (MPA). FueLNG further stated that by 2021, it expects to provide 30 to 50 ship-to-ship LNG bunkering activities.

Market Competitive Landscape

Major global Small-Scale LNG market companies include The Linde Group, Wartsila Oyj Abp, Baker Hughes Company, Honeywell International Inc., Chart Industries Inc., Black & Veatch Corp, Anthony Veder Group NV, Royal Dutch Shell PLC, Engie SA and Eni SpA.

COVID-19 Impact Analysis

The outbreak of the COVID-19 pandemic has significantly altered the global market for Small-Scale industrial LNG. Due to the COVID-19 epidemic, almost all major countries witnessed a slowdown in economic development, affecting consumer purchasing habits. The COVID-19 epidemic has placed unprecedented strain on economies and society; its consequences will be severe and while its longevity is unknown, it is too early to predict negative effects.

The LNG industry has been greatly impacted, posing several obstacles, but there are also likely to be some opportunities. Shipments have been hampered by quarantine. However, this has resulted in a delay rather than a reduction in supplies. The COVID-19 pandemic has significantly influenced the market, causing supply chain disruptions, reduced energy use and discouraging investments in newer technology. However, as large-scale LNG plants face increasing pressure to provide returns to investors, operating corporations are increasingly supporting small-scale LNG projects.

Russia-Ukraine War Impact

The Russia-Ukraine war has had a significant impact on the small-scale LNG (liquefied natural gas) industry, disrupting supply lines and driving up energy prices. The dispute has led to a rearrangement of energy channels and supplies, with several European countries aiming to reduce their dependency on Russian gas. This transformation has raised demand for alternative energy sources, notably small-scale LNG, as governments seek more dependable and diverse energy supplies.

On the other hand, the war has caused uncertainty and volatility in the energy markets, which may provide challenges for small-scale LNG projects. The high cost of LNG, combined with price variations, can have an impact on the economic viability of these projects. Furthermore, logistical delays and geopolitical concerns might stymie the development and implementation of small-scale LNG projects. Despite these challenges, the desire for energy diversification and security drives growth and innovation in the small-scale LNG sector.

By Type

• Liquefaction
• Regasification

By Application

• Heavy Duty Vehicles
• Transport
• Industrial & Power
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• Wartsila Corporation was awarded a contract in June 2023 to improve the capacity of the regasification system on the floating storage and regasification unit (FSRU). This floating storage and regasification unit (FSRU) vessel, owned by LNG Hrvatska and based in Zagreb, functions as an LNG terminal on the island of Krk. The Wartsila Corporation will work with the ship's existing regasification system to expand capacity by 212 million standard cubic feet per day or 250,000 cubic meters per hour.
• In April 2024, the Indian Gas Exchange announced contracts for small-scale liquefied natural gas on its platform following clearance from the Petroleum and Natural Gas Regulatory Board.
• In November 2023, Elengy, a unit of Engie's GRTgaz, launched a new small-scale LNG carrier loading service at its Fos Tonkin terminal on France's Mediterranean coast.
• May 2023: The National Gas Company of Trinidad and Tobago Limited signed a Memorandum of Understanding (MOU) with Globus Energy Group Trinidad Limited, Corban Energy Group and Chester LNG LLC to explore and screen technologies for micro- and small-scale LNG projects in the Caribbean.

Why Purchase the Report?

• Visualize the composition of the small-scale LNG market segmentation by type, application and region, highlighting the critical commercial assets and players.
• Identify commercial opportunities in the small-scale LNG market by analyzing trends and co-development deals.
• Excel data sheet with thousands of small-scale LNG market-level 4/5 segmentation points.
• Pdf report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.
• Product mapping in excel for the key product of all major market players

The global small-scale LNG market report would provide access to an approx. 53 market data table, 43 figures and 206 pages.

Target Audience 2024

• Small-Scale LNG Service Providers/ Buyers
• Industry Investors/Investment Bankers
• Education & Research Institutes
• Emerging Companies
• LNG Manufacturers