According to a report by BCC Research, the boom in hydraulic fracturing following the commercial extraction of unconventional and conventional gases has resulted in significant growth in demand for proppants. Growing industrialization has led to an increased need for energy, with expansion being primarily driven by countries such as China, India, Brazil and Russia. The U.S. is bucking the global energy trend, with a real prospect of becoming largely independent of fossil fuel imports, while major European consumers, China and India are preparing for increasing dependency. The global energy landscape is changing rapidly and profoundly, with trade flows shifting and security of supply issues reshaping.
Hydraulic fracturing fluids use proppants to inject into the wells. The most commonly used proppant is silica sand, as it is low cost and abundant. In the U.S., demand for proppants is primarily driven by the shale oil industry, as the natural gas price is delinked from the crude oil price and thus is more economical to develop shale oil. Globally, proppant sales are growing due to increases in the production of shale gas as countries prepare to use this unconventional energy for domestic purpose and to export excess gas.
“While most of the proppant spending will take place in the Americas and in the U.S. in particular, annual growth rates for other nations and regions are more aggressive, as the unconventional oil and gas boon spreads across the globe over the next 10 years,” said Tanmay Joshi, analyst. “Of particular note are the proppants markets in Argentina, throughout the Americas and in China. These nations and regions have extensive unconventional oil and gas reserves, and the global trend toward natural gas as the dominant feedstock will ensure significant political and fiscal capital is spent developing them.”
Another key market for proppants is expected to be that of the Middle East and North Africa (MENA), with Algeria having the world’s third-highest recoverable shale gas reserve at 707 trillion cubic feet (Tcf). In addition, the region has potential shale reserve in countries such as Algeria, Libya, Tunisia, Morocco, Egypt, Saudi Arabia, Oman, the United Arab Emirates (UAE), Kuwait, Syria and Jordan. The region has large, unexplored and unconventional gas deposits, with companies claiming that only 15% of the region has been adequately explored for gas.