As oil fields mature and unconventional extraction methods gain ground, growth in demand for water treatment and reuse is set to outstrip the wider water services market for oil and gas, according to a new report from GWI.
In 2014, the global market for water management services and technologies in the onshore oil and gas industry is estimated to be worth $37.9B. This figure is expected to grow at 6% a year, in line with increasing oil and gas production.
GWI’s new primary research report, Water for Onshore Oil & Gas, focuses on opportunities for water treatment in three segments of the oil and gas industry – produced water management, hydraulic fracturing and enhanced oil recovery.
The report identifies that the volumes of produced and flowback water associated with the production of oil and gas are constantly rising. This is due to an increase in the production of unconventional oil and gas, which requires more water per unit of product recovered, and an increase in water to oil ratios (WOR) in mature oil fields. By 2020, the onshore oil and gas industry will generate over 500 million barrels of produced water a day.
The management of produced water is becoming highly challenging: disposal options are becoming more limited, regulations are getting stricter, and water sources more scarce. Exploration and production (E&P) companies are already experiencing these challenges and are becoming more aware that produced water is an asset rather than a waste stream.
Servicing the US
According to the report the largest segment of the market is water management services, which will be worth an estimated $34B globally in 2014. Demand is highly concentrated in the United States (71% of the global total), and is driven by increases in unconventional oil and gas production. In 2014, the US market is estimated to be worth $24B, with water hauling the largest component of the services market.
Treat 'em well
Water for Onshore Oil and Gas predicts that capital expenditure on produced water treatment equipment is expected to grow from an estimated $3.4B in 2014 to $5.4B in 2020. There are four principal drivers of this growth:
Breaking with convention
GWI expects that, with an average annual growth rate of 14.2%, investments in produced water treatment for unconventional resources will be the most exciting segment of this market going forward.
The major regions which are likely to generate significant opportunities between now and 2020 can be summarised from the report as follows:
Separate to accumulate
Oil-water separation equipment represents the largest segment of the market for produced water treatment, and will be worth an estimated $2.1B in 2014. This reflects the necessity of separating oil, gas and water streams in all areas of production.
According to Water for Onshore Oil and Gas the advanced treatment technologies are predicted to be the fastest growing area of this market, with a predicted annual growth rate of 20%. The technologies exist, and have already been used in coal seam gas produced water treatment in Australia, and for reusing water in the Canadian oil sands.
GWI’s new report, Water for Onshore Oil & Gas: Opportunities in produced water management, hydraulic fracturing and enhanced oil recovery is available now, priced at £2,200/$4,000. For more details on how to order, please see the advert opposite or contact Chantal Marchesi at firstname.lastname@example.org.
SOURCE: Global Water Intelligence