Fracking Fluid & Chemicals Market size is forecast to reach $52.41 billion by 2025, after growing at a CAGR of 10.10% during 2020-2025. Fracking fluids and chemicals are products that are used in the process of hydraulic fracturing. These chemicals aid in increasing the quantity of hydrocarbons that can be extracted. These products also aid in improving the yield and quality of the final product. The steady rise in oil exploration activities is expected to boost market demand.
By Fluid Type – Segment Analysis
Water-based segment held a significant share in fracking fluid & chemicals market in 2019. The decision regarding the type of fracking fluids to be used may also depend on cost, technical complexity based on the geological condition, and effect on the environment. The water-based fluid is the most common type of fracking fluids used due to its various applications and cost effectiveness. Water-based fluids are non-viscous with minor concentrations of proppants, and can be pumped at a higher rate, in order to obtain narrow fractures. The various properties of water-based fluids including, high fluid efficiency, minor proppant concentration, and high rate of pumping, enable to obtain complex fractures.
Water-based fluids consist of freshwater, brine, saturated or formate brine. Growing concern towards environmental impact of oil & gas operations is anticipated to raise water- based fluids demand over the forecast period. Oil-based fluids are used in low quantities across the hydraulic fracturing industry, owing to their adverse impact on the environment associated with water discharge. However, with increasing environmental concerns and damages to the ecosystem, gelled oil-based fluids are expected to witness an upward trend.
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By Well Type – Segment Analysis
Horizontal well segment held a significant share in fracking fluid & chemicals market in 2019. Horizontal wells give drillers access to a much wider area and extract oil at very slow rates from a reservoir. Vertical wells on the other hand extract oil in a short duration through boreholes of shorter lengths. There is a reduction in the heterogeneous influence associated with the flow geometry of horizontal wells, along the long drain, which thus increases the total production. Horizontally drilled wells give access to by-passed and isolated gas and oil accumulations within a large field. This allows the extraction of natural gas in huge quantities. Horizontal wells make it possible to harness more energy with few wells, thus making it more productive and efficient as compared to vertical wells. Although there are huge benefits of horizontal wells; drilling these wells is expensive and highly complicated.
Vertically drilled wells, give access only to the natural gas which is available at the immediate end of the well. Vertical wells do not require directional boring, as they have to be drilled in just one direction. This factor makes the vertical wells less expensive and complicated as compared to horizontal wells. Recent developments in directional drilling technology have made vertical drilling outdated.
By Function Type – Segment Analysis
Gelling agent segment held a significant share in fracking fluid & chemicals market in 2019 growing at a CAGR of 10.21% during the forecast period. The fluids are usually transported in two manners including, high viscosity and high rate. For this purpose, gelling agent is utilized for thickening water and thus enabling injection of high viscosity fracturing chemicals which causes the fractures to expand considerably. The function of friction reducers allows high injection rates by reducing the friction in pipes. Buffers are utilized to maintain the pH value of fluids even in harsh conditions such as high temperature & pressure. The clay control agent reacts with the clays in the rocks and formations via sodium-potassium ion exchange, and helps stabilize the clay in shale structure.
Biocides help to eliminate various bacteria present in water which cause the adulteration of final products. Biocides are majorly utilized in water-based fluids as they are more susceptible to bacterial attack on account of the natural gum and starch content in them. Biocides are also known as bactericides, which are utilized to control slime-forming bacteria, sulfate-reducing bacteria and iron-oxidizing bacteria, in recovery fluids and fractures.
Geography- Segment Analysis
North America dominated the fracking fluid & chemicals market with a share of more than 38%, followed by Asia Pacific and Europe. Demand for fracking chemicals in the United States, the largest market, has been favored by the low breakeven price and technological advancement in hydraulic fracturing. The country has witnessed a shift from vertical to horizontal drilling, with longer lateral lengths and increased number of frac stages per well, coupled with increased fracking fluid consumption per foot. In 2017, the horizontal well count in the United States reached 126,653, representing an increase of around 8.2% over the previous year’s horizontal well count. Continuing with this trend, the share of horizontally drilled wells in the country reached 87%, by the end of 2018. As a result, the increasing focus on unconventional reserves to meet the surging demand for oil and gas is expected to drive the fracking fluid & chemicals market, and increase the demand for fracking fluid & chemicals.
China and Indonesia has significant shale gas reserves. However, the fracking activity in the region is currently low. The activities for development and extraction of oil and gas from Asian unconventional shale reserves are projected to increase during the forecast period resulting in the growth of fracking fluids and chemical market.
The prevalence of COVID-19 has led to decreased utilization rates of refineries across the globe, resulting in supply shortages for various end-use sectors. The health crisis has, on a different note, has led to a sudden spike in demand for olefins which find usage in the formulation of sanitizers and other cleaning products.
Drivers – Fracking Fluid & Chemicals Market
The changing trend of drilling wells towards horizontal drilling
Over the recent past, there has been a significant increase in horizontal fracking activity. This activity necessitates a relatively larger amount of fracking fluids and chemicals. As such, the demand for fracking fluids and chemical has witnessed a steady growth. The trend is expected to continue over the forecast period. The increasing demand for energy needs more exploration which in turn results in increasing demand for fracking fluids and chemicals. Horizontal drilling has a lesser impact on the environment, compared to vertical drilling. Instead of drilling a dozen or more vertical wells, oil and gas companies are able to extract same volumes of oil and gas through a horizontal well.
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Challenges – Fracking Fluid & Chemicals Market
There have been many public concerns regarding usage of water in the limited supply regions and also the contamination and other environmental hazards due to fracking. The industries can address these concerns by using and capitalizing on foam-based fluids. This alternative utilizes less water than traditional fracturing and could help companies in addressing public concern over the environmental effects of fracturing. Backflow of the water may cause surface and groundwater contamination, stringent regulations against the use of fracking fluids, and increasing need for alternatives are restraining the global fracking fluid & chemicals market growth.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the fracking fluid & chemicals market. In 2019, the market of fracking fluid & chemicals has been consolidated by the top five players accounting for xx% of the share. Major players in the fracking fluid & chemicals market are BASF, Chevron Phillips Chemical, Albemarle, Clariant, AkzoNobel, Calfrac Well Services, FTS International, Dow Chemical Company, EOG Resources, Dupont and Pioneer Natural Resources among others.
In December 2018, Chevron Phillips Chemical Company LP introduced feedstock and commenced operations of a new ethane cracker at its Cedar Bayou facility in Baytown, Texas. At peak production, the unit will produce 1.5 million metric tons/3.3 billion lbs. per year.
The horizontal and directional wells account for the largest share in the fracking chemicals market, majorly due to the increasing number of horizontally drilled wells in the countries, such as the United States, Canada, China, and Russia.
Alternative fracking technologies, such as waterless fracking, usage of green chemicals, propane gel, and other technologies, are expected to create substantial growth opportunities in the future.
North America dominated the fracking fluid and chemicals market.
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