Fracking Fluid End Market Size to reach an estimated value of US$ 677.9 million in 2025
Hydraulic
fracturing, the technique, used for the production of oil and natural gas, use
frac pumps to transmit the fracking fluid into the wellbore. Each frac fleet
uses several frac pumps. Typically, 18-20 frac pumps are used per frac fleet.
These pumps consist of two major components, the power end, and the fluid end.
Responsible for the high-pressure injection of the fluid into the well, these
fluid ends are not only an essential part of the frac pumps but are also an
indispensable component of the pressure pumping market. The lifespan of a fluid
end decreases with the use of recycled water, advanced chemicals &
slickwater, and the quality of frac sand pumped through it. In general, the
life of carbon steel fluid end is 250-450 hours, whereas stainless-steel fluid
ends introduced in 2012 have a life three-to-four times that of carbon steel.
Therefore, the fluid ends market is offering an attractive growth opportunity
to the fluid end manufacturers despite it accounts for only ~30% of the total
pump’s cost.
Since
2014, the oil & gas industry was not stable and the last two years had been
difficult especially for the pressure pumping companies in North America due to
stagnant oil prices, shale drilling slump, and investor pressure discouraging
new drilling. The year 2020 brought up two major setbacks for the oil & gas
industry: the price war between Russia and Saudi Arabia and COVID-19. The
disagreement between Russia and Saudi Arabia on the reduction of oil production
resulted in more than 30% plunge in the oil prices to below US$ 30 per barrel. Despite
the end of this price war with the unanimous agreement between OPEC and its
allies to slash production, the oil prices have still not recovered to a
profitable level. Further, the oil price collapsed with tepid oil demand due to
the lockdown of more than two-thirds of the world population. The decline in
oil prices has a major impact on the American shale industry as fracking
becomes unprofitable at oil prices less than US$ 40 per barrel. Many fracking
companies, including Halliburton and Schlumberger, wrote off a large portion of
their fleets due to the high number of pressure pumping supplies in the market,
which led to demand and supply imbalances. EIA estimated the average oil price
will remain at US$ 33 per barrel in 2020 and expects a recovery to US$ 46 per
barrel in 2021. Considering expected oil price recovery as EIA stated along
with the recovery from the COVID-19 pandemic, Stratview projected that the
global fracking fluid end market to reach an estimated value of US$ 677.9
million in 2025.
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Fracking Fluid End Market Insights:
By Material Type:
Stratview has firstly segmented the
fracking fluid end market based on the material type as carbon steel fluid end
and stainless-steel fluid end. The stainless-steel fluid end is likely to
maintain its dominance during the forecast period. Also, the segment is likely
to grow at a higher rate in the wake of its corrosion-resistant property and
more pumping hours as compared to carbon steel fluid end.
By End-User Type:
Based on the end-user type, the market
for fracking fluid ends is segmented as OE and aftermarket. The aftermarket not
only governed the fracking fluid end market in 2019, but it is also estimated
to be the faster-growing type in the coming five years. The lifespan of fluid
ends getting shorter with the harsher fracking environment, a larger volume of
proppant used, rising pumping pressure resulting in increasing replacement of
fluid ends in existing frac pumps. While power end lasts for two years, fluid
ends need to be replaced three to four times per year.
By Horsepower Type:
Based on the horsepower of frac pumps,
the fracking fluid end market is broadly segmented as 2000-2500 horsepower and
above 2500 horsepower. In 2019, fluid ends compatible with frac pumps of
horsepower between 2000-2500 held a major share of the market. The above 2500 horsepower segment is expected
to grow at a higher rate during the forecast period, driven by the gradual
shift in demand towards higher horsepower pumps in order to reduce the number
of assets on the site while extending the parts life. For example, 11 units of
5,000 HP fracking pumps can do the job of 20 units of 2,500 HP frac pumps.
By Region:
In terms of region, North America is projected to remain the largest market during the forecast period primarily because of the presence of high technically recoverable reserves of shale oil and gas and the presence of major fluid end manufacturers in the region. In 2019, the demand for fluid ends in the region was disrupted principally because of the focus of operators for capital discipline over growth. Despite an increase in oil prices in 2019 (WTI oil price increased from $48 to $62 with an average of $57), the land rig count in North America shrunk by 27%. E&P operators in the region started shifting their focus towards cash generation over growth, which led to an accelerated downturn in the second half of the market. The COVID-19 outbreak disrupted the supply-demand dynamics with significant lesser oil demand may reduce exploration and production expenditure in 2020.
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