Increasing Shale Gas Reservoir Aiding the Proppant Market

The surging demand for frac sand for petroleum fluid extraction, the discovery of new shale gas reservoirs, and the growing resin-coated and ceramic proppant consumption to improve the well productivity are some of the major factors behind the growth of the proppant market. In 2017, the market attained a size of $6,057.0 million, and it is predicted to generate a revenue of $10,562.9 million by 2023, progressing at a CAGR of 9.5% during the forecast period (2018–2023). Proppant is a solid substance that helps in keeping a hydraulic fracture open at the time of hydrofracking treatment. 

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On the basis of type, the proppant market is categorized into resin-coated, ceramic, and sand materials. Out of these, in 2017, the sand category held the largest sales volume share of over 85.0%, and it is expected to grow further during the forecast period. The main factor responsible for its dominance is its comparatively lower cost over other types. Besides, it is widely adopted by exploration and production (E&P) organizations for fracturing procedures, which is why its sales would increase. 

Based on application, the proppant market is classified into shale gas, coal-bed methane, tight gas, and others. Out of these, during the historical period (2013–2017), the shale gas classification was the largest application area of the substance, contributing over 50.0% revenue to the market in 2017; it is also predicted to surge at a significant pace during the forecast period. This can be mainly ascribed to the abundant utilization of these materials in shale gas extraction, which is increasing at a high rate. 

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On a global ground, North America led the proppant market, both in terms of value and volume. In 2017, it held more than 70.0% revenue share in the market. The region is anticipated to continue dominating the market during the forecast period owing to the growing fracturing activities for shale gas extraction. Further, the revival in oil prices, extensive material loading levels, and development of longer laterals to escalate natural gas production are some other factors driving the market progress in the region.

Further, with the unearthing of new shale gas reservoirs, there is an increase in fracturing activities, which is resulting in a high demand for frac sand. The material is used for making holes in the reservoir to create a vent for the shale gas to come up to the surface. Frac sand is widely used due to its cost-effectiveness. Owing to the rising fracturing activities, the demand for the material in 2018 was expected to reach 110.0 million tons compared to 45.0 million tons in 2016, according to the Oil & Gas Journal. Hence, the proppant market is predicted to witness growth with rising E&P activities for shale gas. 

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Phenol-based, resin-coated substances negatively impact the environment by causing water contamination. Therefore, companies such as Preferred Sands and Dow Chemical Company have developed an eco-friendly non-phenolic resin-coated material to decrease the impact on the environment. Further, less energy is required during its production, thereby helping in operational cost reduction for the manufacturers. The application of these materials in the oil and gas industry is predicted to rise during the forecast period. Thus, the advancement in these materials is offering huge growth opportunities for the proppant market players. 

Hence, the increasing exploration of shale gas reservoirs and growing use of eco-friendly materials are projected to boost the market during the forecast period.