Background Image

 

FGE’s annual LPG Forecast is a comprehensive assessment of the global LPG market, divided into two main geographical areas, East and West of Suez. In this forecast, FGE examines the industry dynamics on a country and regional level, and then derive an assessment of the trade balances – where propane and butane is moving and why, feeding into this forecast of prices and margins.

 

LPG trade has traditionally been a supply-driven business and that is especially true in today’s market. The principal supply driver this time has, of course, been LPG exports, mainly propane, out of the US as a result of the shale gas revolution there. The chart below shows where these LPG exports have gone in recent years. 

 Lpg Forecast Chart 1 Final

The key trade relationship has been that between the US and Asia—helped by the opening of the neo-Panama Canal in mid-2016 which allowed for VLGC passage.

Which is growing faster—US export supply or Asia import demand? 

      • The answer in 2016 had been US export supply, particularly when we remember all the unsold LPG cargoes that were sitting off Singapore in August.
      • The answer in 2017, especially in the second half of the year, was Asian import demand. In fact, much petrochemical demand for LPG had to be jettisoned, as a result of higher traded prices, in order to balance the Eastern trading market.

In our view, 2017 marked a change in the industry perspective—from how to deal with the existing US export surplus to how to find new sources of supply for the still-growing Asian LPG import market.

New LPG Supplies

Where will these new LPG supplies be coming from?

We do project some 20 million tons of new LPG export supplies between 2017 and 2025.

These will be the sources for Asia:

          • some from Australia—the new Ichthys and Prelude projects are scheduled to start in 2018,
          • some from the Middle East—Iran definitely and Qatar possibly (after the lifting of the gas moratorium),
          • and some from Pacific Rim countries. There are three Canadian propane projects out of the West Coast (of which we think two will happen). The Russian LPG export project out of Vanino in the Russian Far East looks increasingly likely.

An uncertainty here is the US. Fears that the US might run out of propane seem to have abated somewhat. But there are no more major export projects on the Gulf Coast. New capacity will probably be needed there post-2020 (note that the green line in the chart following shows the actual and projected LPG exports from these terminals).

 Lpg Forecast Chart 2 Final

Corpus Christi may emerge as a major export centre in the future. 

How much LPG will be coming out of Marcus Hook on the US East Coast? That is difficult to say. Start-up of the Mariner 2 pipeline bringing NGLs from the Marcellus region has been delayed  and may happen now in 3Q 2018. Will Mariner 2X happen? We have our doubts. Our guess at the moment is that we could see 4-6 million tons of LPG out of Marcus Hook annually post-2020. But it could be higher. And this would affect the global LPG balance.

 

Interested in finding out more?

Further information on this study can be found by downloading our latest brochure.

 

Download Brochure

Sectors, Products & Regions Covered

  • Sectors: LPG Trade, LPG Pricing, Price Forecasts, and LPG Shipping.
  • Regions: Africa, Asia, Europe, Latin America, The Middle East, North America, Russia/FSU

Deliverables

  • Two hard copies of the report
  • One PDF soft copy of the report 
  • One PDF soft copy of the LPG Forecast Update (available at the middle of every year)
  • Associated Excel data file
  • Weekly LPG Confidential Report
  • A presentation of FGE's latest analysis on the global LPG market
  • Associated Excel data file
  • 15 hours of consultation with FGE's LPG team available per year for telephone discussions, fax and email inquiries 

Research & Analysis

  • LPG Service

    FGE's LPG service provides detailed insights, analysis, and forecasts of the key issues affecting the global LPG marketplace.



    read more

Data

  • Oil Online Data System

    FGE's Online Data System for Oil (ODS) allows clients to flexibly query FGE's proprietary supply and demand data for crude and refined products at a country or regional level, allowing you to identify potential pressure points and regional flows.



    read more

 

Further Information

If you require additional information on this or any FGE service, including requesting a trial, or you would like to discuss ways in which FGE can assist you further, please contact a member of our sales team:


Mr. Robert Beckmann - Singapore

Head of Business Development
Tel: +65 6222 0045

Email Robert

Mr. Edo Ndeke - London

Business Development Manager
Tel: +44 (0) 20 7726 9570

Email Edo

Mr. Farhan Sulaiman - Singapore

Business Development Manager
Tel: +65 6222 0045

Email Farhan

Mr. Lance Ruxton - London

Business Development Manager
Tel: +44 (0) 20 7726 9570

Email Lance

Ms. Iren Naseri - Dubai, UAE

Business Development Manager
Tel: +971 4 457 4270

Email Iren

Mr. TJ Braziel - Houston, TX

Business Development Manager
Tel: +1 (281) 819 1983

Email TJ

Request Call Back

To request a call back from a member of our sales team, please complete the below form.