The Global Proppant Market Is Witnessing A CAGR Of 9.5% During The Forecast Period

The global proppant market valued $6,057.0 million in 2017 and is projected to reach $10,562.9 million by 2023, witnessing a CAGR of 9.5% during the forecast period. The growing demand for frac sand for the extraction of petroleum fluids and the increasing use of ceramic and resin-coated proppants to enhance the productivity of wells are the key factors driving the growth of the proppant market. Proppant is a solid material that is designed to keep a hydraulic fracture open during the hydrofracking treatment. The material should be carefully sorted in terms of sphericity and size to maximize well productivity.

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Proppants are used in hydraulic fracturing for the extraction of shale gas and other unconventional sources of fuel. However, it has been observed that hydraulic fracturing causes methane emissions, water contamination, and noise pollution. Due to fracturing, the ground water often gets contaminated, which, in turn, results in health issues for the people residing in nearby areas. Due to these factors, environmental agencies have started imposing stringent regulations on the fracturing process. For example, according to the Safe Drinking Water Act, there are certain requirements for well siting, construction, and operation to minimize environmental risks to the underground water. This, in turn, limits the usage of these materials and hampers the growth of the proppant market.

The growing demand for frac sand is one of the key factors driving the growth of the proppant market. Also, the development of eco-friendly, non-phenolic resin-coated materials is providing ample growth opportunities to the players in the market. The sand type is further classified into white and brown sand. White sand is widely used due to its high silica content. Brown sand does not contain a high percentage of silica; therefore, it is cheaper. However, brown sand is more prone to crushing at low stress levels.

Phenolic-based resin-coated material causes certain environmental issues, such as water contamination. Thus, companies like Preferred Sands and Dow Chemical Company have introduced an eco-friendly, non-phenolic resin-coated variety. The material developed by the two companies not only reduces the impact on the environment but also requires less energy during production. The material is expected to find high application in the oil and gas industry in the coming years. Thus, the development of such materials is providing growth opportunities to the players in the proppant market.

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Globally, North America held the largest share in the proppant market, in terms of both value and volume. The region contributed more than 70.0% value share to the market in 2017. Moderate recovery in oil prices, increased material loading levels, and introduction of longer laterals to boost natural gas production in North American countries are the key factors driving the growth of the proppant market in the region.

With the discovery of new reservoirs of shale gas, fracturing activities have witnessed a significant increase. Thus, the demand for frac sand has also risen. The material is required for breaking the pores in the reservoir in order to create a vent for the shale gas to flow up to the surface. Frac sand is the most commonly used material because of its low cost. With increase in fracturing activities, the demand for the material is also expected to increase from 45 million tons in 2016 to 110 million tons in 2018. This will act as a driver for the growth of the proppant market.

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