Oil and Gas Storage Service Market
Global Industry Analysis and Forecast 2023-2030
Market Value (2022)
USD 1.12 Billion
Forecasted Value (2030)
USD 1.53 Billion
CAGR (2023 – 2030)
Fastest Growing Region (2023 - 2030)
Residential, Commercial, Industrial
The global Oil and Gas Storage Service Market was valued at USD 1.12 billion in 2022 and is projected to reach USD 1.53 billion by 2030, growing at a CAGR of 3.97% from 2023 to 2030.
The oil and gas storage service market growth is accelerated by the increasing demand for oil supply, which is mainly due to the increasing use of petroleum products such as gasoline, oil, and other fuels. As the demand for various petrochemical products increases, investment in refining capacity has grown rapidly. The increased production of refineries and the requirement of more storage space with a high safety rate further propels the market growth. The growth of oil and gas production and transportation infrastructure increases the need for storage services. With the construction of new pipelines, refineries and terminals, the requirements for storage capacity are increasing. Storage providers are strategically locating their facilities in new production areas and transportation routes. Growing concerns about climate change and environmental impacts are driving the adoption of sustainable practices in the oil and gas industry.
However, the market growth is restricted by the stringent safety, environmental, and labor standards regulations. Storage service providers must comply with various regulations and standards, which can be difficult and expensive to implement. Failure to comply with these requirements can result in penalties, reputational damage, and even legal consequences. The development and maintenance of storage infrastructure requires significant investments. Warehouses, tanks, pipelines, and terminals must be built, upgraded, and maintained to meet industry standards. Large investments and long investment horizons present financial challenges for storage service providers. In addition, oil and gas storage facilities are prone to accidents, spills, and security threats, which is restricting market growth.
Analyst’s Review on Oil and Gas Storage Service Market
The market for oil and gas storage services is driven by growth in oil and gas production, increasing demand for storage capacity, and the need for strategic reserves. These services play a key role in ensuring the stability of the energy market by balancing demand and supply. Companies provide storage tanks for rent to oil and gas producers, distributors, and traders. These tanks can be above ground or underground and come in different sizes and dimensions to meet different storage needs. Companies in the industry are constantly investing in infrastructure development, technology upgrades, and security measures to meet the changing needs of the industry. Technological advances such as automation, the Internet of Things, and data analytics are transforming the oil and gas storage industry. These technologies enable better tracking, optimization, and efficiency of warehouse operations. Storage providers that adopt these innovations gain a competitive advantage in terms of cost efficiency and quality of service.
Oil and gas storage services refer to facilities and infrastructure that provide storage solutions to the oil industry. These services are essential for the storage and management of crude oil, refined products, and natural gas at various stages of the supply chain. The storage terminals serve as central points for receiving, storing, and distributing petroleum products. These often include loading and unloading facilities, mixing facilities, and quality control measures. Many countries maintain strategic oil reserves to ensure energy security during emergencies or supply disruptions. Oil and gas storage services are critical for the efficient and safe management of petroleum products throughout the supply chain, which ensures a reliable and stable energy market.
The oil and gas storage services market growth is accelerated by the rising consumption of fuel in the transportation sector, especially in emerging markets such as China, India, and Indonesia, has created a strong demand for petroleum products. This is compelling oil producers in the OPEC countries and the US to increase their production and drilling activities. Such activities have resulted in a rise in the production of oil and gas, which is driving investments in oil and gas storage services. The growing need for energy resources to support economic activity, support industrial development, and meet the energy needs of a growing world population. Industries rely heavily on these resources for power generation, transportation, manufacturing, and other critical processes. Rapidly developing countries, especially in Asia and Africa, are experiencing significant economic growth, leading to increased energy needs to support their industrialization efforts. Expanding and improving infrastructure allow these resources to be efficiently produced, transported, and distributed, ensuring their availability to meet the growing demand.
The oil and gas storage service market faces major constraints due to the global transition to renewable energy sources. Concerns about climate change and the need to reduce carbon emissions have led to increased investment in solar, wind, hydro, and other renewable energy technologies. Proper maintenance of the oil reservoir can prevent problems caused by water accumulation during long-term storage. Microorganisms have the potential to grow at the interface between fuel and accumulated water, but sludge formation can be prevented with proper care and treatment. While injectors and particles are possible, proper care and maintenance can prevent problems with the filter or fuel injection system. Microbes can only grow in water, so if fuel is properly stored and kept dry, the risk of microbial contamination decreases. Fuel degradation can be prevented by controlling the growth of microbes in contact with water and fuel. Governments, businesses, and consumers are embracing sustainability and working to reduce their dependence on fossil fuels. As a result, demand for oil and gas may decline over the long term, creating challenges for traditional oil and gas companies and pushing them to adapt and diversify their portfolios to remain competitive in a changing energy environment.
The global oil and gas storage service market is segmented based on type, service type, application, and geography.
Based on type, the market is classified into upstream, downstream, and midstream. The downstream segment dominated the market as it encompasses refining, processing, and distribution activities that transform crude oil into various valuable products such as gasoline, diesel, jet fuel, and petrochemicals. The segment plays a critical role in meeting global energy demands and ensuring the availability of refined products for various industries and consumers.
Based on service type, the oil and gas storage service market is bifurcated into above ground and underground. The underground segment held the largest share in 2022. The segment growth is accelerated by the growing number of underground facilities owing to the increasing number of facilities due to low operational and infrastructural cost.
Based on application, the oil and gas storage service market is bifurcated into residential, commercial, and industrial. The industrial segment is the largest consumer of oil and gas products, with applications in manufacturing, petrochemicals, power generation, and various industrial processes. The segment expansion is influenced by growing industrial activities, ongoing economic growth, and need for energy-intensive processes. With uses in manufacturing, petrochemicals, power generation, and numerous industrial processes, the industrial sector constitutes the greatest consumer of oil and gas products. Energy-intensive processes, economic expansion, and industrial activity all have an impact on this market's demand.
Based on regional analysis, the global oil and gas storage service market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.
North America held the largest market share owing to the growth in crude oil and refined product exports from the United States, which has attracted significant investment in storage terminals. The increase in drilling activities in the United States is also contributing to the growth of the market in North America. In addition, the market is expected to expand government oil storage programs to protect the economy during the energy crisis and minimize greenhouse gas emissions.
The market for oil and gas storage services is the fastest growing market in the Asian region, with the increase in refining costs is expected to lead to the establishment of refining units in all countries of the Asia-Pacific region. These units improve the productivity of middle distillates and accelerate the growth of the market for storage services for these products. Growing demand for oil and gas from major Asia-Pacific economies such as China and India and increasing investment in offshore and onshore operations are expected to drive industry development across the APAC region.
The global oil and gas storage service market study will provide valuable insights with an emphasis on the fragmented nature of the sector. Prominent players are focusing on several key business strategies, such as partnerships, mergers & acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their respective market shares across different regions. The major players in the oil and gas storage service market are:
- AltaGas Ltd.
- Burns & McDonnell
- Edison Group
- Exxon Mobil Corporation
- Indian Oil Corporation Limited
- Kawasaki Kisen Kaisha, Ltd.
- MAN Energy Solutions
- Reliance Industries
- Saudi Arabian Oil Co.
- August 2023 (Acquisition): AltaGas Ltd. agreed to acquire natural gas processing facilities and natural gas storage infrastructure in Canada from Tidewater Midstream and Infrastructure Ltd. for USD 650 million. Through the agreement, AltaGas acquired Pipestone's Phase I and Phase II expansion projects for its natural gas processing facility; the adjacent Dimsdale natural gas storage facility; Tubular condensate lifter in/out terminal; and associated collection pipe systems.
- March 2023 (Acquisition): Enbridge acquired the Tres Palacios natural gas storage facility in Matagorda County, Texas, for USD 335 million. The acquisition was made as part of an agreement with Crestwood Equity Partners LP and Brookfield Infrastructure Partners and added approximately USD 35 billion of Gulf Coast natural gas storage to Enbridge's portfolio.
The global Oil and Gas Storage Service Market is segmented as:
By Service Type
- Above Ground
- North America
- Rest of Europe
- Asia Pacific
- South Korea
- Rest of Asia Pacific
- Middle East & Africa
- North Africa
- South Africa
- Rest of Middle East & Africa
- Latin America
- Rest of Latin America