Global Virtual Pipeline Market: Analysis and Forecast, 2023-2033

Feb 2024| BIS922A| BIS Research

Report Highlights

The Global Virtual Pipeline Market Expected to Reach $14.17 Billion by 2033

Global Virtual Pipeline Market Overview

The virtual pipeline market for tanker trucks, towed trailers, tank containers, and rail tank cars exhibits a notable concentration, with key players such as CIMC Vehicle, Daimler, and PACCAR (Kenworth and Peterbilt) holding significant market shares. This concentration is indicative of the dominance of a few major manufacturers in the industry. Recent strategic initiatives focus on technological advancements, reflecting the concerted efforts of major players to strengthen their positions in this concentrated market. In October 2022, Trinity Industries received a $1.8 billion multi-year railcar supply order from GATX. As per the terms of the deal, Trinity will supply 6,000 tank cars at a rate of 1,200 cars per annum between 2024 and 2028.

Market Introduction

The global virtual pipeline market was valued at $6,130.7 million in 2023 and is expected to reach $14,171.7 million by 2033, with a CAGR of 8.74% from 2023 to 2033. Companies engaged in the manufacturing of tanker trucks and towed trailers for virtual pipeline applications can position themselves strategically by investing in research, developing resilient production infrastructure, and establishing key partnerships. This strategic positioning aligns with the market trend as industries increasingly shift toward sustainable and efficient gas transportation solutions. As the demand for virtual pipeline solutions rises, companies adopting a forward-thinking approach are likely to play a pivotal role in shaping the future of the global virtual pipeline market and meeting the evolving needs of the energy transportation sector.

Industrial Impact

The market dynamics suggest that these leading companies, through their recent strategic initiatives, have the potential to influence competition, pricing strategies, and industry trends. In terms of bargaining power, the concentration of the market may provide suppliers with higher bargaining power, especially for specialized components and materials used in vehicle manufacturing. The potential for forward or backward integration is influenced by the strategic initiatives of companies. For instance, investments in research and development, acquisitions of logistics technology firms, and development of new product lines, as observed in the industry, indicate the possibility of both forward and backward integration strategies being pursued by key players to capture value across the virtual pipeline supply chain.

The key players operating in the global virtual pipeline market include Galileo Technologies S.A., BayoTech, Wabash National Corporation, CIMC Vehicles (Group) Co., Ltd., Daimler Truck AG, PACCAR Inc, Quantum Fuel Systems LLC, Wabash National Corporation, Polar Tank Trailer, HEIL Trailer, Tremcar, CIMC Safeway Technologies Co., Ltd, Jingjiang Asian-Pacific Logistics Equipment Co., Ltd, Square Technology Group Co., Ltd (NTtank), Chart Industries, and Trinity Industries, Inc, among others.

Market Segmentation:

Segmentation 1: by Application

  • CNG
  • LNG
  • Hydrogen

LNG to Dominate the Global Virtual Pipeline Market (by Application)

The liquefied natural gas (LNG) segment is set to maintain its dominance throughout the forecast period, driven by the escalating demand for reliable and flexible energy distribution solutions, particularly in regions with limited access to traditional pipeline infrastructure. This dominance is attributed to the economic and environmental advantages of LNG, where the refrigeration process enables cost-effective transportation and storage, positioning it as the preferred choice. The growth of virtual pipelines in remote areas has been notable since 2017. For instance, Galileo Technologies further underscored this trend by announcing the supply of 14 Cryobox-Trailer LNG production stations to fuel a new power generation plant in Anchoris, Mendoza Province, Argentina, in 2017. These small-scale liquefaction units are strategically deployed to orphan wells distributed throughout the Malargüe region, showcasing the industry's strategic approaches, successful market introductions, and impact of a progressive regulatory framework shaping the global virtual pipeline market.

Segmentation 2: by Product

  • Tanker Trucks
  • Towed Trailers
  • Tank Containers
  • Rail Tank Cars

Tanker Trucks to Dominate the Global Virtual Pipeline Market (by Product)

The global virtual pipeline market is experiencing a significant transformation, with the tanker trucks segment expected to hold a dominating share throughout the forecast period. This shift is notably propelled by developing countries, particularly due to strong government support advocating for reduced taxes, incentives, and infrastructure development. For instance, in April 2023, GreenLine, a virtual pipeline service provider, unveiled plans to invest $170 million in deploying 1,650 LNG-powered trucks in India by March 2024, with the company aiming to have an operational fleet of 10,000 trucks by March 2026. These initiatives by virtual pipeline service providers explain the broader industry trend where companies harness technological advancements to craft solutions aligning with consumer preferences for efficiency and sustainability. As these pioneers continually refine methodologies and expand their product offerings, the tanker trucks segment in the virtual pipeline market appears poised for sustained growth and potential market dominance.

Segmentation 3: by Region

  • North America: U.S., Mexico, and Canada
  • Europe: France, Germany, Italy, U.K., and Rest-of-Europe
  • Asia-Pacific: China, India, Japan, Australia, South Korea, and Rest-of-Asia-Pacific
  • Rest-of-the-World: Brazil, U.A.E., and Others

North America has played a pivotal role in shaping the global virtual pipeline market for tanker trucks and towed trailers. The substantial traction gained by virtual pipeline systems in the region is a result of growing energy demands and increasing prominence of natural gas as a cleaner energy source. The North America virtual pipeline market boasts strong players, exemplifying their influence through strategic initiatives. In a notable example, Quantum Fuel Systems, a key player in the market, demonstrated its industry leadership in January 2022 by delivering cutting-edge virtual pipeline trailers for hydrogen to Certarus Ltd. These trailers, known as VPLite-H45/40’, are approved for use in both the U.S. and Canada, featuring a gas mass of 803kg at 3,600 psi (248 bar). Despite challenges such as terrain or geopolitical issues that pose obstacles to physical pipelines, North America's proactive approach is evident in ongoing research and development efforts in virtual pipeline technology. This strategic commitment, coupled with successful market introductions and a progressive regulatory framework, cements North America's position as a leader in shaping the global virtual pipeline market for tanker trucks and towed trailers.

Recent Developments in the Global Virtual Pipeline Market

  • In August 2022, Kinder Morgan completed the acquisition of North American Natural Resources, Inc., including its affiliated companies North American Biofuels LLC and North American-Central LLC, for a total of $135 million. This acquisition encompassed seven landfill gas-to-power plants situated in Michigan and Kentucky. As part of the amalgamated purchase, Kinder Morgan decided to convert four out of the seven gas-to-power plants into renewable natural gas plants, with an associated capital expenditure of approximately $175 million.
  • In June 2022, AVR explored options for locally managing its hazardous gas and cleaning residues by entering into a partnership with HaloSep AB, a Swedish company. HaloSep's patented process transforms hazardous waste into harmless and useful fractions, contributing to a circular economy by recovering material resources and reducing the plant's environmental footprint.
  • In October 2021, Gas Malaysia and Malakoff Corporation Berhad formed the strategic partnership Malakoff – Gas Malaysia Cogen O&M Sdn Bhd, bringing together their expertise and resources to commence the Operations & Maintenance (O&M) services for a cogeneration plant in Malaysia.

Demand - Drivers, Limitations, and Opportunities

Market Drivers: Surge in Remote Energy Needs

The surge in remote operations is propelling global virtual pipeline market growth, emphasizing its role as a temporary solution for extending natural gas access. In regions lacking conventional pipelines, leveraging virtual pipelines enables industries to adopt cleaner energy sources, fostering innovation and competitiveness.

This shift stimulates the local market, encouraging the production of superior goods and services and driving global penetration. This flexibility allows for the transfer of virtual pipeline systems to newly developed regions, boosting market expansion and influencing tanker truck and towed trailer producers to adapt to evolving energy transportation needs.

For instance, Canada-based Ferus Natural Gas Fuels specializes in delivering LNG solutions to the energy, mining, and transportation industries. The company manages virtual pipelines to transport LNG to remote mining sites, contributing to emission reduction and lowering energy expenses for these operations.

Market Challenges: Growing Global Momentum toward Renewable Energy

The surge in global renewable energy adoption, especially in Europe, has diverted investments away from the crude oil industry, hindering virtual pipeline market growth. According to the IMF, major companies are reducing investments in oil infrastructure due to declining reserves. Simultaneously, the volatility in natural gas prices globally poses a challenge to widespread adoption.
Additionally, the flammability of natural gas necessitates precautionary measures in handling and transportation, potentially impacting virtual pipeline market growth. Temperature variations affecting gas properties may lead to increased maintenance costs, creating challenges for tanker truck and towed trailer producers adapting to evolving energy dynamics.

Market Opportunities: Increasing Government Influence on Virtual Pipeline Growth

Supportive government policies, subsidies, and regulations can significantly impact the growth of virtual pipeline systems. Incentives for the use of natural gas, as well as safety and environmental regulations, play a role in shaping the industry landscape. For instance, the European Union's Clean Energy Package focuses on promoting the integration of renewable energy sources, including biogas and biomethane, into the gas grid.
Additionally, the package aims to facilitate cross-border gas trade, including liquefied natural gas (LNG) and compressed natural gas (CNG), through virtual pipelines. This initiative underscores the government's support for virtual pipeline solutions, where gas is transported using tanker trucks and towed trailers, enabling flexible and efficient transportation of energy resources across borders.

How can this report add value to an organization?

Product/Innovation Strategy: The product segment helps the reader understand the different applications of virtual pipeline applications (i.e., CNG, LNG, and hydrogen) and products (i.e., tanker trucks, towed trailers, tank containers, and rail tank cars). The market is poised for significant expansion with ongoing technological advancements, increased investments, and growing awareness of the use of virtual pipelines. Therefore, the virtual pipeline business is a high-investment and high-revenue generating model.

Growth/Marketing Strategy: The global virtual pipeline market has been growing at a rapid pace. The market offers enormous opportunities for existing and emerging market players. Some of the strategies covered in this segment are mergers and acquisitions, product launches, partnerships and collaborations, business expansions, and investments. The strategies preferred by companies to maintain and strengthen their market position primarily include partnerships and collaborations.

Competitive Strategy: The key players in the global virtual pipeline market analyzed and profiled in the study include manufacturers of virtual pipeline equipment (rail tank cars, tank containers, towed trailers, and tanker trucks). Additionally, a comprehensive competitive landscape such as partnerships, agreements, and collaborations are expected to aid the reader in understanding the untapped revenue pockets in the market.

Report Synopsis

Report Metrics Details
Base year considered 2023
Forecast period considered 2023-2033
Base year market size $6.13 Billion in 2023
Market size forecast $14.17 Billion by 2033
Growth rate 8.74%
Units considered $ Billion
Segments covered By Application, By Product, By Region
Industry covered Advanced Materials & Chemicals
Regions covered North America, Europe, Asia-Pacific
Countries covered U.S., Canada, Mexico, Germany, Italy, U.K., France, Rest-of-Europe, China, South Korea, Australia, Japan, India, Rest-of Asia-Pacific, Rest-of-the-World, Brazil, U.A.E.
Companies studied
  • Galileo Technologies S.A.
  • Wabash National Corporation
  • BayoTech
  • CIMC Vehicles (Group) Co., Ltd.
  • Daimler Truck AG
  • PACCAR Inc
  • Quantum Fuel Systems LLC
  • Chart Industries
  • Polar Tank Trailer
  • HEIL Trailer
  • Tremcar
  • CIMC Safeway Technologies Co., Ltd
  • Jingjiang Asian-Pacific Logistics Equipment Co., Ltd
  • Square Technology Group Co., Ltd (NTtank)
  • Trinity Industries, Inc

Research Methodology

Factors for Data Prediction and Modeling

  • The base currency considered for the market analysis is US$. Currencies other than the US$ have been converted to the US$ for all statistical calculations, considering the average conversion rate for that particular year.
  • The currency conversion rate has been taken from the historical exchange rate of the Oanda website.
  • Nearly all the recent developments from January 2020 to January 2024 have been considered in this research study.
  • The information rendered in the report is a result of in-depth primary interviews, surveys, and secondary analysis.
  • Where relevant information was not available, proxy indicators and extrapolation were employed.
  • Any economic downturn in the future has not been taken into consideration for the market estimation and forecast.
  • Technologies currently used are expected to persist through the forecast with no major breakthroughs in technology.

Market Estimation and Forecast

This research study involves the usage of extensive secondary sources, such as certified publications, articles from recognized authors, white papers, annual reports of companies, directories, and major databases to collect useful and effective information for an extensive, technical, market-oriented, and commercial study of the global virtual pipeline market.

The process of market engineering involves the calculation of the market statistics, market size estimation, market forecast, market crackdown, and data triangulation (the methodology for such quantitative data processes is explained in further sections). The primary research study has been undertaken to gather information and validate the market numbers for segmentation types and industry trends of the key players in the market.

Primary Research

The primary sources involve industry experts from the global virtual pipeline market and various stakeholders in the ecosystem. Respondents such as CEOs, vice presidents, marketing directors, and technology and innovation directors have been interviewed to obtain and verify both qualitative and quantitative aspects of this research study.

The key data points taken from primary sources include:

  • validation and triangulation of all the numbers and graphs
  • validation of reports segmentation and key qualitative findings
  • understanding the competitive landscape
  • validation of the numbers of various markets for market type
  • percentage split of individual markets for geographical analysis

Secondary Research

This research study involves the usage of extensive secondary research, directories, company websites, and annual reports. It also makes use of databases, such as Hoovers, Bloomberg, Businessweek, and Factiva, to collect useful and effective information for an extensive, technical, market-oriented, and commercial study of the global market. In addition to the aforementioned data sources, the study has been undertaken with the help of other data sources and websites, such as GFI and Delft University of Technology.

Secondary research was done in order to obtain crucial information about the industry’s value chain, revenue models, the market’s monetary chain, the total pool of key players, and the current and potential use cases and applications.

The key data points taken from secondary research include:

  • segmentations and percentage shares
  • data for market value
  • key industry trends of the top players of the market
  • qualitative insights into various aspects of the market, key trends, and emerging areas of innovation
  • quantitative data for mathematical and statistical calculations

Key Market Players and Competition Synopsis

The companies that are profiled have been selected based on inputs gathered from primary experts and analyzing company coverage, product portfolio, and market penetration.

Some of the prominent names in this market are:

  • Galileo Technologies S.A.
  • BayoTech
  • Wabash National Corporation
  • CIMC Vehicles (Group) Co., Ltd.
  • Daimler Truck AG
  • PACCAR Inc
  • Quantum Fuel Systems LLC
  • Wabash National Corporation
  • Polar Tank Trailer
  • HEIL Trailer
  • Tremcar
  • CIMC Safeway Technologies Co., Ltd
  • Jingjiang Asian-Pacific Logistics Equipment Co., Ltd
  • Square Technology Group Co., Ltd (NTtank)
  • Chart Industries
  • Trinity Industries, Inc

Companies that are not a part of the aforementioned pool have been well represented across different sections of the report (wherever applicable).

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