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Global LPG

Hydrocarbon Engineering,

Facts Global Energy (FGE) has released its latest LPG forecast at a time in which it believes there is great change in the LPG sector. FGE has said that the set patterns of decades in LPG trade are being broken and new patterns are being established. The company has also said that fortunes can be made or lost depending on a correct or incorrect reading of the situation going forward.

US exports

When it comes to exports of LPG from the US, it has been the shale gas revolution that has made an impact. FGE has said that gas producers have been hurt by the ongoing slump in US gas prices. However, those involved in gas liquids have benefited hugely including the US midstream companies who have invested in NGL infrastructure and fractionators to the two existing LPG terminal operators on the Gulf Coast and LPG traders and ship owners who have lifted from these terminals. However, this benign state of affairs may not continue, according to FGE.

For this year, FGE predict difficulties for US LPG producers and international LPG traders in particular before the global LPG market adjusts to the new LPG market dynamics resulting from increasing US LPG exports. However, FGE does see the global LPG import market through to 2020 as finite, not infinite. The company believes that it could support 25 million t of Global Coast LPG exports by that time, but not the 35 – 40 million tpy capacity that has been talked about.


When it comes to LPG shipping the export potential has already sparked a boom in the building of VLGCs (very large gas carriers). The delay in the widening of the Panama Canal has helped this cause to some extent as US gulf trade to Asia has had to take the long route there and use a greater number of ton-miles. Consequently, FGE has said that freights for these ships have been at record highs in the past year. However, the new building program will probably require these types of trading inefficiencies to continue, as well as a maximum level of LPG trade growth from the US to Asia.


According to FGE, the one factor that has been the collapse of crude prices in the last quarter of 2014. Prices have fallen by nearly 50% from their peaks in the middle of 2014. There has of course been knock on effects on LPG prices, significantly impacting LPG producing margins in the US and international LPG price spreads and trading margins, probably on a permanent basis.

Edited from press release by Claira Lloyd

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