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| Portable equipment hire market sizing |
Context / Scope of project
Australia’s growing coal seam gas (CSG) industry was set to rapidly expand to feed a series of planned LNG plants. Our client, a major provider of equipment to heavy industry, was keen to expand its product range into portable equipment to service the CSG sector. The PIP team rapidly assessed the suitability of portable equipment for the CSG sector and determined the potential size of the market.
Key Insights:
- The portable equipment was technically capable and flexible enough to meet the specific requirements of the industry
- Industry players saw the primary role of the equipment being in the development stages of new fields when more permanent infrastructure was not yet installed
- The proportion of the market that this portable equipment would capture was expected to be small. However due to the predicted large size of the whole market, the share that portable equipment could capture was still significant.
Outcome:
- In light of uncertainty around production volumes, our client delayed their investment decision until the industry was further developed.
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What we did:
- Built up a CSG demand forecast based on our assessment of the likelihood and timing of the proposed LNG projects
- Assessed the functional suitability of the portable equipment for the CSG market
- Determined relative total cost of the various equipment options in terms of capital expenditure, and operating costs
- Conducted extensive market research on:
- The technical solution the LNG market would use (this equipment vs other methods)
- What size and form of equipment would be required (large centralised/ small distributed, fixed/portable)
- Intended equipment ownership and operation (buy/hire, insource/outsource operation).
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