The proppant market is being driven by the rising requirement for frac sand during petroleum extraction and surging use of resin-coated and ceramic proppants for enhancing the well productivity. Revenue of $6,057.0 million was generated by the market in 2017, which is projected to rise to $10,562.9 million by 2023, at a 9.5% CAGR during the forecast period (2018–2023). During oil and gas extraction, fractures are created in the hydrocarbon-containing rocks. Once the pressure is released, proppants, which are solid materials, are used to keep the cracks open.
When segmented on the basis of type, the market is divided into sand, resin-coated, and ceramic. Among these, the sand division led the proppant market in 2017, in terms of sales volume, with a share of over 85.0%. Sand-based proppants’ low cost and the fact that they are widely preferred by exploration and production (E&P) firms were the reasons behind their dominating position. Even during the forecast, this division is expected to witness the highest CAGR and continue leading the market till 2023.
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The various categories of the proppant market, on the basis of application, are tight gas, coal-bed methane, shale gas, and others. In 2017, shale gas extraction was the largest category, with more than 50.0% share in terms of value, owing to the heavy usage of proppants during the process. In recent years, shale gas extraction using the hydraulic fracturing technique has risen significantly in North America. With similar growth expected in China, shale gas would continue being the largest category in the market during the forecast period.
The increase in hydraulic fracturing activities in North America is itself a key proppant market trend. As per the Railroad Commission of Texas (RRC), during January–March 2018, 2,712 shale gas wells were completed in the continent. This was a considerable rise from the 1,925 wells completed between January and March in 2017. Proppants made from sintered high-grade kaolin and bauxite are utilized during hydraulic fracturing for the gas’s extraction, due to their high strength, which is important in the process.
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With the growth of E&P operations, the demand for frac sand, which is mixed in water during hydraulic fracturing, is also increasing. As frac sand is the least costly of all proppant types, it is popular among oil and gas firms. The Oil & Gas Journal reported that the requirement for cost-effective sand-based proppants, which was 45 million tons in 2016, would surge to 110 million tons in 2018, thereby driving the market.
Another major driver for the proppant market is the rising usage of resin-coated and ceramic proppants for improving the economics of the wells. Such products are strong and can withstand high stress, of up to 10,000 pounds per square inch, in deep wells. With the increase in the number of oil and gas wells, companies are looking for proppants for multiple-stage fracturing and low-permeability wells. The focus of E&P firms is shifting to deep wells, where high-strength materials are required to keep the fractures open.
North America has been the largest market for such materials, with a value share of over 70.0% in 2017. It is expected to be the dominant region in the market during the forecast period too, on account of the increasing E&P activities and use of hydraulic fracturing. The recovery in oil prices and higher material loading levels have been driving the oil and gas industry in the continent. During the forecast period, the proppant market is projected to witness the fastest growth in Asia-Pacific (APAC).
Hence, with the increasing extraction of shale gas, requiring the cracking of deep rocks and then holding those cracks open, the usage of proppants would also rise.
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