Continual expansion of unconventional oil and gas development seen over the next decade – most notably in the US, but also around the globe – will necessitate steadily increasing proppant sales throughout the next ten years. Business intelligence consultancy Visiongain calculates that the global market for proppants will reach $8.85bn in 2014.
In the US, proppant sales are primarily driven by the shale (tight) oil industry, since the natural gas price has decoupled from the crude oil price, making it more economical to develop shale (tight) oil. However, elsewhere in the world, proppant sales are underpinned by shale gas development as nations seek to exploit their unconventional gas resources for export purposes or for the sake of domestic energy security.
While most of the proppant spending will take place in the Americas, and in the United States in particular, annual growth rates for other nations and regions are more aggressive, as the unconventional oil and gas boon spreads across the glove over the next 10 years.
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. Strong global oil prices and, in the case of markets outside North America, gas prices, further justifies such development and spending.
European proppants market proves to be an interesting case. With several European countries – including the UK, Poland, Lithuania, and the war-torn Ukraine – pursuing the shale gas dream, there is only one company in Europe producing ceramic proppants. Baltic Ceramics, based in Poland and gearing to start production in 2015, believes it can take up to 5% of annual global demand for the product.
The chairman of Baltic Ceramics, Piotr Wozniak, said in a recent interview that “We would like to sell as much of the product as possible in Poland, due to high profit margins, but we expect the majority will be sold abroad. The markets with the biggest potential are Romania, the United Kingdom, or – outside Europe – Argentina and Saudi Arabia.”
Today, Baltic Ceramics announced that it has positively completed quality tests which analysed the impact of the various stages of production on the quality of the final product. Positive results of the tests – carried out in the U.S. and Poland – will enable the company to start production. On the basis of the obtained results it will be possible to integrate the various elements of the production line to guarantee the highest quality proppants manufactured on an industrial scale.
“The tests were carried out and reviewed by independent research centres. We can therefore be confident that ceramic proppants manufactured by Baltic Ceramics’ patented technology will be of the highest quality. The results of the analyses will be used to develop the final design of the product, to be further optimized during the production process” explained Dariusz Janus, the CEO of Baltic Ceramics Investments SA.
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