The flare gas recovery systems market size is estimated to be valued at USD 2.97 billion in 2024 and is projected to reach USD 5.71 billion by 2031, registering a CAGR of 9.8% over the forecast period. Flare gas recovery systems help reduce environmental emissions and recover valuable natural gas from flaring or venting. Furthermore, the systems enable the efficient reuse of associated gas from oil and gas operations.
The growth of the flare gas recovery systems market is driven by increasingly stringent government regulations regarding industrial emissions and focus on energy efficiency. Major oil producing countries have outlined plans to reduce natural gas flaring drastically in the coming years to lower emissions. For instance, Russia aims to eliminate routine gas flaring by 2030. Furthermore, recovery and reuse of associated gas enhances process economics for operators. Additionally, availability of technologically advanced, customized flare gas recovery solutions catering to specific production facilities also propels the market growth. However, high capital investment for setup and operations of flare gas recovery infrastructure remains a key challenge.
Growing environmental regulations to curb emissions are driving the adoption of flare gas recovery systems
As flare gas burning releases harmful pollutants like methane into the atmosphere, many countries have either banned or imposed penalties on venting and flaring of gases at oil & gas installations. This is driving the need for oil & gas companies to install flare gas recovery systems that can capture otherwise burned or wasted gases and put them to productive use. By recovering flare gases, companies can comply with regulatory norms as well as generate additional revenue from the sale of recovered gas. The total financial impact of regulations on limiting emissions is compelling many operators to invest in advanced flare gas management technologies.
Increased focus on minimizing operational costs through the reuse of flare gases
Uncollected flare gases represent losses in potential revenue. By recovering these gases using modern flare gas handling equipment, oil & gas operators can reuse them as an energy source within their facilities. This eliminates waste and cuts down dependency on other fuel sources. Some recovered gases can even be directly fed into gas distribution pipelines or used to generate power on-site. This enables substantive savings on operational expenditure. With volatile crude oil prices, upstream companies are zealously pursuing cost optimization initiatives, which is stoking demand for cost-effective flare gas recovery and reuse options.
Lack of capital investments is stunting market growth
Despite the apparent economic and environmental benefits, cost remains a key barrier limiting wider adoption of flare gas recovery systems. Setting up such infrastructure requires significant upfront capital, which oil & gas operators are hesitant to invest due to uncertainty over return on investment. Break-even timelines can be long, discouraging investments especially when crude prices are low. Additionally, rapidly changing business conditions in the oil & gas sector introduce project risks that further discourage capital spending. With limited budgets, priority is often given to core production activities over initiatives for flare gas handling. This financial restraint continues to dampen the demand for advanced flare gas recovery equipment and technologies.
Skilled workforce shortage is hampering operations and maintenance
Another challenge faced by the flare gas recovery systems market is the lack of trained personnel for operating specialized equipment and carrying out maintenance activities. Flare gas capture and processing involves complex machinery that needs to be carefully monitored and serviced. However, there is a widespread shortage of competent operations and maintenance engineers with technical know-how regarding these systems. This scarcity of skilled labor leads to disadvantages like inconsistent performance, process disruptions, and safety issues. Unless addressed properly, workforce constraints will continue hurting adoption and long-term viability of flare gas recovery systems across oilfields.
Growing demand for gas as a transition fuel presents opportunities
As countries strive to switch from coal and oil to cleaner energy sources, natural gas has emerged as a viable transition fuel. Its relatively lower carbon footprint compared to other hydrocarbons is prompting increased usage of gas in multiple sectors including power generation and transportation. This rising gas demand acts as a pull factor for flare gas recovery, allowing operators to find new customers for processed flare gases. Selling recovered gases helps optimize returns from flare gas management projects. Additionally, growth in gas-based industries and expansion of pipeline infrastructure in different geographic locations are enlarging available monetization avenues.
Advent of digital technologies enabling advanced flare gas solutions
The availability of Industry 4.0 technologies heralds new opportunities for flare gas recovery systems providers. Cloud computing, IoT, AI, and data analytics are facilitating the development of next-gen intelligent and automated equipment. Smart sensing and monitoring allow issues to be addressed proactively while machine learning aids optimization of processes. Remote operation and predictive maintenance minimize downtime. Telematics improve dispatch response. These digital innovations promise to overcome past limitations, strengthening business case for flare gas capture projects. Going forward, symbiosis of advanced hardware with software/digital components will enable the achievement of higher performance standards at lower lifecycle costs.
*Link: https://www.coherentmarketinsights.com/market-insight/flare-gas-recovery-systems-market-3854
Key Developments
- In 2022, GARO delivered a flare gas recovery system for Brazilian FPSO
- In 2022, Baker Hughes collaborated with Egyptian General Petroleum Corporation on a flare recovery initiative
- In 2021, SBM Offshore awarded a Letter of Intent for FPSO Almirante Tamandaré lease
- In 2020, Zeeco, Inc., a designer and manufacturer of advanced combustion and environmental solutions, announced that Saudi Aramco granted 9COM approval to Zeeco for a variety of combustion equipment manufactured at the Zeeco Middle East, Ltd. facility in Dammam
Key Players
Baker Hughes , Gardner Denver , Transvac , Aerzen USA, MPR Industries, Wärtsilä , Schneider Electric, Siemens, Eaton, Legrand, Mitsubishi Electric Corporation, Rockwell Automation, Hitachi, Ltd., Honeywell UOP, Cimarron Energy, INC.( Jordan Technologies), Zeeco, Inc, SoEnergy International, John Zink Hamworthy Combustion, Ramboll Group, Inc., and Srisen Energy Technology Co., Ltd
