Market Trends of Control Valve Industry
The Oil and Gas Segment is Expected to Drive the Market
- Valves play a crucial role in the oil and gas sector as they are vital to any piping system. Their primary functions include equipment isolation and protection, flow rate control, and guidance and direction of the crude oil refining process. These valves are designed to regulate flow rate, temperature, and pressure through a controller's electrical, hydraulic, or pneumatic signals. Their automatic operation allows for remote operation, eliminating an operator's need for constant monitoring and adjustment.
- Control valves are gaining popularity in the oil and gas sector owing to their ability to regulate flow rate, pressure, and temperature. These valves adjust the flow passage size based on signals from a hydraulic, pneumatic, or electrical controller, enabling remote operation. Furthermore, increased investments in fluid handling technology, particularly in the oil and gas sector, are significantly contributing to the growth of the control valve market.
- The increasing inclination toward digitalization and automation within the oil and gas sector is increasing the need for control valves. Consequently, manufacturers of control valves are consistently involved in research and development endeavors to create and enhance their offerings in accordance with the demands of end-user industries. The escalating number of oil and gas exploration ventures in regions like the Middle East, Africa, China, and North America is projected to bolster the market’s growth significantly.
- In June 2023, Norway declared its endorsement of 19 oil and gas ventures on the Norwegian continental shelf, with a total investment value exceeding USD 19 billion. These projects encompass novel developments, expanding existing fields, and investing in projects to augment extraction at existing areas. The Ukraine conflict augmented Norway's revenues as European nations previously dependent on Russia sought alternative energy sources. Consequently, significant investments in the European Union to enhance self-reliance in the oil and gas sector will amplify opportunities for control valves.
- The oil and gas sector relies on control valves, making it a pivotal sector for their utilization. Control valves are in high demand globally due to new oil and gas exploration projects, transportation pipeline initiatives, and maintenance operations.
- As per the International Energy Agency (IEA), the global demand for fossil fuels such as oil, gas, and coal is projected to reach an unprecedented peak by 2030. This surge can be attributed to evolving energy policies worldwide, the rapid advancement of clean technologies like solar panels and electric vehicles, the growing adoption of heat pumps, and the compelled transition from gas in Europe following Russia's invasion of Ukraine. Furthermore, the sector’s escalating automation technologies are anticipated to propel the market growth significantly.
- The demand for control valves across onshore applications is expected to rise with the increasing distribution of oil and gas. For instance, according to EIA, in 2025, it is projected that 28% of the world's crude oil production will be derived from offshore sources, with the remaining 72% being extracted onshore.
- As of February 2024, there were 296 land rigs in that region, with a further 53 rigs located offshore in the Middle East and 95 land rigs in that region, with 16 rigs located offshore in Africa. These notable capabilities and the anticipated growth in the oil and gas industry will undoubtedly generate substantial prospects for the market.
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North America is Expected to Hold a Significant Market Share
- North America is one of the world's most significant markets for control valves. There is immense demand from various industries in the United States and Canada, including oil and gas, electricity, food and packaging, and chemicals. With rapid industrial automation, the region is expected to spearhead the need for control valves.
- Rapid industrialization and the growing transportation sector in these nations are expected to increase the demand for oil and gas. The need to provide potable water to the ever-increasing population also leads to the setting up of desalination plants, further resulting in the demand for control valves. Waste and wastewater management is also a considerable segment that is expected to drive future demand.
- The United States plays a critical role in increasing the demand from the region compared to Canada. The demand from almost all the end-user segments is increasing, especially from the oil and gas, refining, and power generation segments. Major industries in the country, such as oil and gas, renewable energy, and water and wastewater treatment, are moving toward valve technology with embedded processors and networking capability to work alongside sophisticated monitoring technology coordinated through a central control station.
- The United States is experiencing a significant expansion in oil production. ExxonMobil, a prominent oil producer in the country, announced its intention to augment production activity in the Permian Basin of West Texas, with a target of producing over 1 million barrels per day (bpd) of oil equivalent by 2024. This represents an increase of almost 80% compared to the current production capacity. Chevron was projected to increase its net oil-equivalent production to 600,000 bpd by 2020 and 900,000 bpd by 2023.
- The shale oil boom in North America generated a significant need for fluid handling equipment and components, particularly control valves. These valves play a crucial role in regulating the shale oil exploration and production process and ensuring the smooth transportation of shale oil through pipelines. The initiation of new upstream oil and gas exploration projects is anticipated to fuel the demand for control valves in the oil and gas industry.
- In the United States, developing new shale oil projects necessitates the construction of additional pipelines for the transportation of shale oil. According to Baker Hughes, North America currently boasts the highest number of oil and gas rigs worldwide. As of May 2023, the region had a total of 776 land rigs, with an additional 22 rigs situated offshore. The number of oil and gas rigs experienced a surge in late 2022 due to the gradual impact of sanctions on Russian exports, resulting in increased exploration activities in North America.
- The region has experienced a surge in the utilization of control valves due to the heightened emphasis on renewable energy initiatives, resulting in a rapid rise in the number of solar thermal energy facilities. The region boasts an abundance of wind, solar, geothermal, hydro, and biomass resources. The demand for renewable energy projects is fueled by ample financing opportunities and a highly skilled workforce.
- The water and wastewater industry is a significant consumer of fluid handling technology due to increasingly stringent regulations regarding the treatment and cleanliness of water. The increasing investments in the region's water and wastewater industry are expected to offer significant market growth opportunities.
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