US Demand for Products and Services Used in Shale Gas Development Will Grow to $52 Billion in 2015

Demand for products and services used in shale gas development will grow to $52 billion in 2015 as industry activity continues to escalate in the emerging Marcellus, Haynesville and Fayetteville shale plays. While shale gas drilling will slow from the rapid buildup of the 2005-2010 period, the industry will bring more than 8,000 new producing wells online through 2015. Increasing demand for drilling and completion products and services for new shale gas wells will be accompanied by growing markets for workover, restimulation and well site reclamation services in those regions where production is maturing. These and other trends, including market share and product segmentation, are presented in Shale Gas: Products & Services, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Demand for drilling equipment and consumables in the shale gas plays will grow to nearly $7 billion in 2015, led by strong increases in tubular goods, the largest equipment category. Shale operators will continue to consume more tubular goods overall and on a per-well basis. Growth in demand for fluids and materials will match that seen for drilling equipment and consumables, reflecting the intensive material demands of the wells that will be drilled in the newer shale plays. Stimulation products, especially proppants, used in hydraulic fracturing will be the dominant source of fluids and materials demand.

The market for services used by shale gas producers will reach $38.7 billion in 2015. Demand for services will continue to be dominated by contract drilling and pressure pumping, which together will account for nearly two-thirds of total services spending in 2015. Service providers will continue to benefit from high levels of shale gas drilling activity as well as the increased scale and sophistication of wells in the emerging plays. Demand in the completion and production services and the waste management and remediation services segments will be promoted by a range of factors, among them increased workover and restimulation activity as well as new state and federal laws requiring additional environmental services at well sites.