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Tight gas is a type of unconventional gas that is confined in a low-permeability source rock deep underground, such as sandstone or limestone. As the gas is not freely flowing, methods such as fracking or hydraulic fracturing use high-pressure water injection to break up the source rock and extract the gas. Depleting conventional gas reserves, along with growing energy demand, has resulted in a prototype shift towards unconventional natural gas reserves, such as tight gas, shale gas, and coal bed methane. In addition, cleaner combustion form of tight gas compared to other fossil fuels, such as coal and petroleum products, is expected to have a positive influence over the coming years.
Based on application, the market is segmented into residential, commercial & industrial, power generation, transportation. The commercial & industrial segment emerged as the largest application segment in 2020. The growth is due to the tight gas utilization of several value-added outputs required in the industrial sector. For instance, it is utilized as a feedstock for the manufacturing of fertilizers, chemicals, and various other commodities. The power generation segment is expected to rise during the forecast period, owing to the growing trend of coal to gas switching in power plants across several countries worldwide. Lower carbon emissions during tight gas combustion when compared to the combustion quality of other fossil fuels are expected to increase the tight gas market.
The residential sector occupied a significant market share owing to the wide application base of tight gas across household requirements such as usage of tight gas for space heating and water heating in households. The growing usage of tight gas in the residential sector has resulted in the increased development of the piped natural gas network to provide the gas directly to homes. The transportation fuel is estimated to gain significant traction owing to its ability to reduce harmful exhaust emissions of pollutants and provide cleaner combustion as compared to other conventional fuel sources. Rising demand for low-cost and clean transportation fuel in developing countries, such as China and India, is expected to propel the market.
The major market driver for the tight gas market is the lower extraction, processing, and commercialization costs of this variant of gas; this is expected to boost the growth of the market. Innovations in the extraction process of hydraulic fracturing are expected to propel the growth of the market. In addition, increasing levels of expenditure being incurred on the expansion of the oil & gas industry can drive the market’s growth.
The factor that is expected to inhibit the growth of the market is the presence of various harmful chemicals present in the gas extraction process. Some harmful chemicals present in the extraction process are formaldehyde, asbestos, mercury, and hazardous/toxic air pollutants. In addition, the availability of other alternatives such as shale gas will alter the market’s growth
Key Market Driver -
Lower extraction, processing and commercialization costs
Key Market Restraint -
Presence of various harmful chemicals present in gas extraction process
Some of the major companies that are present in the tight gas market are Exxon Mobil, Royal Dutch Shell PLC, Chevron, CNPC USA, SINOPEC, Canadian Natural Resources Limited (CNRL), YPF, Valeura Energy Inc., Southwestern Energy, Repsol, Chesapeake Energy, PetroChina, ConocoPhillips, and Equinor.
The tight gas market has been studied across North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America accounted for the largest volume share, with the U.S. being the major contributor to the revenue growth. Deployment of advanced drilling technologies, and the presence of several tight gas reserves across the Permian Basin, Anadarko, Niobrara, and Bakken field, is a key factor driving the market across the region. China is projected to gain a substantial market share over the forecast period owing to the country’s mission to boost domestic natural gas production, along with growing demand for enhancing energy security across the region. China is rich in tight sandstone gas resources. For example, The Sulige Gasfield in the Ordos Basin and the Upper Triassic Xujiahe Fm gas reservoir in the Sichuan Basin are typical distinctive gas reservoirs in China. However, most of the tight gas resources in China are present in the mountainous regions. Active drilling programs across tight gas resources, such as Sichuan and Ordos basins, enhanced the good productivity and lowered the drilling cost per well in the region.
Argentina is estimated to grow at a significant growth over the forecast period owing to the presence of technically recoverable tight gas formations. Even though the tight gas production in the country has partially declined from mature fields, but continuous development of the Vaca Muerta formation is set to bring the production growth on track. Vaca Muerta accounts for over 20% of the country’s total natural gas production.
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