A quick peek into the report
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.
Analyst View
According to Debraj Chakraborty, Principal Analyst, BIS Research, “The global energy landscape is undergoing a transformative shift with the rise of virtual pipelines, redefining the dynamics of gas transportation. By embracing digital innovation and flexibility, virtual pipelines are becoming instrumental in ensuring a resilient and efficient energy supply chain, heralding a new era in the global gas industry.”
Global Virtual Pipeline Market
Analysis and Forecast, 2023-2033
Frequently Asked Questions
The global virtual pipeline market is a sector within the energy industry that employs innovative technologies for the transport of natural gas without relying on traditional pipelines. It addresses challenges in reaching remote areas where conventional pipeline infrastructure is impractical. By utilizing mobile units and storage facilities, virtual pipelines offer flexibility and adaptability, making gas transportation feasible in economically challenging regions. This market has gained prominence for extending natural gas accessibility to areas lacking traditional pipeline connections.
Key business opportunities in the global virtual pipeline market include meeting energy demand in remote areas, enabling quick response to change market conditions, and providing a cost-effective alternative to traditional pipeline infrastructure. Companies can capitalize on these opportunities by investing in mobile transportation units, storage facilities, and flexible infrastructure solutions.
The global virtual pipeline market is poised to grow over time, compelling companies to come up with collaborative strategies to sustain themselves in the intensely competitive market. Companies with an identical product portfolio with a need for additional resources often partner and come together for joint venture programs, which help the companies gain access to one another’s resources and facilitate them to achieve their objectives faster.
A new entrant can focus on partnering with existing virtual pipeline producers. Also, startups can focus on funding, launching new innovative products, and expanding their sales and distribution networks.
The following are some of the USPs of this report:
• A dedicated section focusing on the trends adopted by the key players operating in the global virtual pipeline market
• Competitive landscape of the companies operating in the ecosystem offering a holistic view of the global virtual pipeline market
• Qualitative and quantitative analysis of the global virtual pipeline market at the region and country level and granularity by application and product segments
• Supply chain and value chain analysis
Energy companies, investors, government agencies, and technology providers can buy this report.