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US faces renewed Asian competition

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Hydrocarbon Engineering,

US LPG exports to Asia will meet stiff competition from the Middle East in the next five years, according to ESAI Energy’s newly published Global LPG Five-Year Outlook.

As the report details, Asia-Pacific imports will increase 380 000 bpd in the next five years, but that will not be enough to absorb incremental exports from the US and Middle East. The result will be greater competition for market share in China and other key markets.

According to ESAI Energy’s bottom-up forecast of country-level supply and demand, a coming slowdown in Indian demand growth is one reason the region’s imports will not grow more. Currently, expanding LPG distribution to the rural population underlies the India’s high rate of demand growth. By 2020, however, distribution will approach a saturation point and, without the ability to continue adding large numbers of new rural users, growth from residential use will slow. Meanwhile, petrochemical enterprises are not investing in LPG-fed capacity.

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