Flare Gas Recovery Systems: Trends, Drivers, and Restraints in the Market

Global warming, environmental pollution, carbon footprint — these concerns have forced industrial plants, such as petroleum refineries and chemical plants to incorporate recovery systems. The global flare gas volume is expected to increase from 4,748 bcf in 2014 to 5,464 bcf in 2020 at a compound annual growth rate of 2.4%.

As concerns about degradation of environment take centre stage, effective mechanisms of managing flaring are being pondered upon. It is in the context of these factors that the demand for flare gas recovery systems has witnessed an increase. FMI’s research on the flare gas recovery market found that the market was valued at US$ 930.4 Mn in 2014. The global flare gas recovery market is expected to be worth US$ 2 Bn by 2020.

Benefits of Installing Flare Gas Recovery Systems 

  • Reduced Maintenance Costs

The periodic maintenance activities in gas processing and production involve flaring of unwanted and unmarketable gases into the atmosphere. However, with the help of FGRS, the flaring is reduced to a large extent, owing to which the need to carry out periodic maintenance activities is reduced. Installation of flare gas recovery systems helps in limiting these incidences significantly, resulting in optimised maintenance cost and service life of flare tips.

  • Increases Operational Efficiency 

FGRS captures the unwanted gases, which could further be used for various other industry-related applications. The oil and gas industry is energy intensive in nature, and it is one of the most prominent consumers of energy across the globe. The installation of flare gas recovery systems increases operational efficiency to a great extent.

  • Reduces Environmental Pollution 

As discussed previously, environmental degradation remains a key concern in the natural gas sector, and government regulations are becoming stringent in various countries. The installation of flare gas recovery systems (FGRS) reduces the volume of flare gases in the environment to a large extent.

Factors Restraining the Adoption of FGRS 

  • High Capital Cost 

One of the key reasons why many oil and gas companies have still not installed flare gas recovery systems in their operations is the high initial cost associated with the product.

Commissioning of a system involves design, manufacture, installation, and test run, owing to which the end-cost of installing shoots up considerably. The need for affordable FGRS is being felt in the industry, and it is expected that with reduction in prices, the adoption will increase significantly.

  • Lack of Awareness in Developing Countries 

Oil and gas companies in the developing part of the world are not bound by stringent regulations as is the case in developed world. As a result of this, there is lack of awareness about the benefits of using FGRS. Many countries in South America, Asia, Middle East, and Eurasia, that have huge oil reserves, have been slow to installing FGRS.

Trends in Global Flare Gas Recovery Market 

  • FGRS manufacturers are constantly on the lookout for upgrading their technology and developing innovative products to consolidate their position in the market. For example, Transvac, a UK based company recently announced the launch of a suite of online software for ejector sizing used in gas compression and screening.
  • Developing countries, where awareness about FGRS is low currently, offer a slew of opportunities for FGRS manufacturers. It is expected that due to the awareness campaigns of several not-for-profit organisations, the governments in developing countries will be forced to tighten the regulations governing flaring in oil and gas sector. Owing to these factors, FGRS manufacturers should be looking at strengthening their position in the developing markets.
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