Hydrocarbon Processing - August 2021 - GP-9

INDUSTRY FOCUS
LPG sector poised for sustainable
fuel transformation
G. FELLER, Contributing Writer
Like virtually all industries, the liquified petroleum gas
(LPG) sector was challenged by the COVID-19 pandemic
throughout 2020. Healthcare workers relied on propane-fueled
heaters as they performed COVID-19 tests on motorists
in parking lots. Restaurants relied on propane-fueled patio
heaters to keep diners fed and employees working after restrictions
on indoor dining compelled them to serve meals
outdoors. Millions counted on propane to keep homes comfortable
and businesses running.
However, owing to its role as an essential commodity for
residential cooking, a dramatic increase in outdoor living,
and as a petrochemical feedstock, the LPG industry was less
affected by the pandemic than many other energy commodities.
As a result, global supply continued its upward trend and
demand continued to grow.
Supply boosts from U.S., Mideast. Estimated global supply
in 2019, the latest year of reporting, was 331 metric MMt.
The U.S. accounted for nearly 85 metric MMt of LPG production,
which represents more than a 10% increase over the
previous year (FIG. 1). U.S. total production was more than
twice that of its nearest rival, China. LPG production from
Canada and Australia also grew in 2019; however, Saudi Ara18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
bia
saw short-lived declines in output due to attacks on production
facilities.
Economic and political tensions, such as the ongoing
U.S.-China trade war, have provided an opportunity for upswings
in production and supply in the Middle East as prime
exports to Asian markets.
Demand gains in Asia-Pacific. Global demand in 2019
stood at nearly 325 metric MMt, a near-3% increase from the
2018 level. Demand is dominated by the residential sector,
accounting for 44%, which is centered around the heating
and cooking sectors. The petrochemical sector made up 28%
of demand in 2019, followed by industrial (11%), refinery
(8%), transportation (8%) and agriculture (1%). Asia-Pacific
countries, and especially China and India, accounted for a
significant portion of gains in demand, in both the residential
and petrochemical market sectors (FIG. 2).
In the transportation sector, autogas demand grew by 1%
globally in 2019, continuing a decade-long pattern of growth.
South Korea, Turkey and Russia remain the largest markets
with consumption of 3 metric MMtpy each, but eastern Europe
continues to see nominal demand growth as autogas rises
in popularity as an economically attractive transport fuel.
18,000
Average: 13,498
38.9%
44.1%
7.7%
7.7%
21.4%
11.8%
13.2%
11.7%
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
Africa
Asia
Middle East
Europe
CIS
North America
FIG. 1. Global propane demand by region, 2019-2022.
Latin America
Oceania
Average: 13,950
15.8%
19.6%
16.8%
18.8%
38.6%
5.2%
37.9%
5.1%
Africa
Asia
Middle East
Europe
CIS
North America
FIG. 2. Global propane supply by region, 2019-2022.
Gas Processing & LNG | JULY/AUGUST 2021 9
Latin America
Oceania
Thousand metric t
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Thousand metric t
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Hydrocarbon Processing - August 2021

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