Keywords: Toxic Gas Detector, Combustible Gas Detector, Process Industry, Safety, Electrochemical, Catalytic, Infrared, Ultrasonic Detector
As governments and end users around the world are increasingly becoming more aware of the risks associated with working in hazardous environments, they have ramped up their efforts to ensure safety. While governments are imposing strict regulations, end users have also changed their viewpoint regarding safety in recent years. Many end users no longer view capital expenditure for safety as pure cost. Rather, it is viewed in part as an investment to protect plant assets, save human lives, and avoid heavy fines.
Many process industries use toxic and combustible gas detectors; the oil & gas, chemical, and refining industries are the largest users. Together, these industries constitute more than half of the demand for gas detectors. Despite the current overall downturn in investments from the upstream oil & gas industry, the toxic and combustible gas detector market will continue to offer opportunities for suppliers, according to the new ARC Advisory Group “Toxic and Combustible Gas Detector Global Market Research Study”. “The decline in oil prices is a major concern for the upstream oil & gas industry. Many upstream participants are cancelling projects and reducing their CapEx budgets, which is negatively affecting gas detector shipments. On the contrary, the low oil prices are driving the margins up for the chemical and refining industry, providing them with the necessary funding to invest in replacement and upgrade projects. So, the growing demand from these two industries will somewhat offset the decline from oil & gas industry,” commented ARC Analyst Inderpreet Shoker, the principal author of the study.
Low Oil Prices
Upstream oil & gas companies around the world are struggling to realign their operations in the face of the precipitous decline in oil prices. Many integrated oil companies, oilfield service providers, and independent E&P players have reduced budgets between 10 to 70 percent. Companies are reducing staff, canceling or delaying projects, and reducing their CapEx budgets. In 2014, project activity was slowing down due to the increasing scrutiny put on capital expenditures. Since then, the declining oil prices, increasing uncertainty regarding the global economy, and the reduced project activity in China have all converged to significantly hamper large CapEx projects and limit gas detection market growth.
Adoption of New Technologies
Increasing regulatory pressure and standards compliance create an environment that encourages end users to increase their investments in plant safety. The rising concern about safety is helping drive adoption of many new technologies. An increasing number of end users are designing their fire and gas detection systems to conform to the guidelines put forth in IEC 61508/61511 and deploying SIL rated detectors. End users are also diversifying their detector portfolio, and along with traditional detection technologies deploying some of the newer technologies such as open path, ultrasonic, hyperspectral, and infrared.
With the fluctuating oil prices and increasing stringent regulations, making business decisions in this sector becomes a tough task. With this ARC study, we aim to provide an insight into the various factors that are inhibiting the growth and also what the future trends will be.
For more information on this study, please visit our Market Research section.