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EIA: most US propane exports sent to Asia

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Hydrocarbon Engineering,

The US Energy Information Administration (EIA) has reported that the US exported 905 000 bpd of propane in 2017, with the largest volumes going to supply petrochemical feedstock demand in Asian countries.

Four of the top five countries receiving US propane exports are in Asia, namely Japan, China, South Korea, and Singapore. They collectively imported 452 000 bpd of US propane in 2017, or approximately half of total US propane exports.

Overall, propane accounted for 17% of all US petroleum product exports in 2017.

US propane exports to these four countries doubled between 2015 and 2017, displacing some of the region’s propane supplies from the Middle East as well as regional production of propane from refineries and natural gas processing plants.

Investments in petrochemical facilities that use propane as a feedstock in Asia have created an export outlet for US propane supplies. This source of demand, combined with a large and sustained US price discount to the international market, encouraged large investments in US propane export capacity. Propane exports tend to be shipped from ports in the Gulf Coast region. This area (defined by Petroleum Administration for Defense District, or PADD 3) accounted for 90% of all US propane exports in 2017.

As a result of these investments, between 2010 and 2017, gross propane exports increased by 796 000 bpd. By late 2017, in part because of greater US propane exports, US propane prices re-established a closer link with international propane and crude oil prices.

Approximately half of US propane production is from the Gulf Coast (PADD 3). Propane is used mainly for space heating and as a petrochemical feedstock and, to a much smaller extent, for transportation and agriculture. Heating and agricultural consumption are highly seasonal and weather dependent, while petrochemical consumption is highly sensitive to propane prices. Propane is used by the petrochemical industry as a feedstock for producing primarily ethylene and propylene, building blocks for chemical and plastic manufacturing.

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