19 November 2013 12:16 [Source: ICIS news]
DUBAI (ICIS)--The growing supply and trade of liquefied petroleum gas (LPG) globally, boosted by the rise in production in the US, will make the commodity an attractively priced feedstock in international markets compared with naphtha, an industry consultant said on Tuesday.
Global LPG production has been growing steadily in the past five years, from about 225m tonnes/year in 2008 to around 250m tonnes/year this year, and is expected to grow to an estimated 270m tonnes/year in 2016, Bill Sanderson, vice president of downstream energy and consulting at IHS, told delegates at the GPCA 2013 Forum in Dubai.
The global consumption of LPG as a chemical feedstock is expected to expand through to 2016 and this will help "clear the market" of excess supply, he said.
In the North American market, the increased production of natural gas liquids (NGLs) as a result of the growth of natural gas production has created an arbitrage opportunity for LPG because of the weakness in prices, Sanderson said.
US exports of LPG to Latin America has surged over the last five years, from under 1m tonnes/year in 2008 to about 5.5m tonnes/year in 2013, and this is set to grow further, he said.
“LPG exports have surged and are largely going to Latin America... as time goes by, a lot more will go to Asia and Europe and this will have an impact on prices,” he added.
The GPCA 2013 Forum runs on 19-22 November.
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