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Chinese process gas compressors

Hydrocarbon Engineering,

A new report from Frost and Sullivan has found that the Chinese process gas compressors market is set to take off as manufacturers in the country look to switch from a labour intensive to a technology intensive automated production system. The replacement market for process gas compressors is also likely to open up by the end of 2021 as older compressors, which do not meet specifications, are eventually replaced. Frost and Sullivan have also said that the market has earned revenues of US$828.3 million over the last year and expects it to reach US$1243.4 million in 2021.

Zi Ning Chong, Industrial Automation and Process Control Research Associate at Frost and Sullivan said. “the Chinese government has deployed many oil and gas pipeline related projects to transfer oil and natural gas from resource rich provinces and countries, thus widening the scope of process gas compressor market. In addition, with approximately 30 – 50 large oil and gas, power generation, and chemical national projects set up between 2011 and 2015, the adoption of process gas compressors escalating.”

However the report has said that the government has either abandoned or postponed the launch of some projects in other industries in order to prevent overcapacity. This has lowered potential sales volumes. Further, fraudulent imitations of overseas process gas compressors by domestic manufacturers in China have dissipated consumers’ confidence and limited demand.

Intense competition and the ensuing pricing pressures faced by suppliers are also restraining profitability. Moreover, Frost and Sullivan has said that oil free compressors are twice the price of oil injected ones, hence many industries are unable to afford process gas compressors.

Chong concluded, “unless small manufacturers specialise in niche markets, they will be phased out by large multinational manufacturers. The strategic pricing of higher efficiency compressors, development of integrated solutions for specific segments, and delivery of value added services will be the way forward for success in the Chinese market.”

Edited from press release by Claira Lloyd

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