Global LPG Demand to Record Impressive Growth at a CAGR of 7% by 2030

According to ChemAnalyst report,” “Global Liquified Petroleum Gas (LPG) Market: Plant Capacity, Production, Operating Efficiency, Demand & Supply, End Use, Competition, Trade, Customer & Price Intelligence Market Analysis, 2015-2030”. The global LPG market is anticipated to witness a CAGR of 7% in the forecast period on account of its increasing utilization in commercial application owing to its properties like low carbon emission and low cost. LPG is a compressed gas comprising butane and propane, mainly produced by refining of crude oil. The demand for LPG is likely to increase in the coming years on its increasing preference over PNG, as it is offers better storage and safety value .In addition, increasing utilization of LPG as a feedstock for propylene and butylene production to further contribute in pushing up the demand for LPG in the next five years.

Browse Complete Report : Liquified Petroleum Gas (LPG) Pricing

LPG is produced as a co-product in the process of crude oil refining. The mixture at first is gaseous, while it is compressed into a liquid phase for easy storage and transportation. Lummus Technology is considered as the most sought-after technology for manufacturing LPG as it provides efficient ethane extraction and LPG recovery. Considering the continuous depletion of renewable resources, Indian Oil Corporation (IOCL), a renowned oil and gas company in India is looking forward to manufacture LPG from a non-renewable source like biomass. As several researches have shown effective results in the manufacturing of LPG from non-renewable resources like glycerol, vegetable oil and biomass, the company is planning to incorporate this route of production influenced by the idea of World LPG Association that aims to produce 50% of world LPG from biomass by 2040. This innovation is anticipated to be cost-effective in the long run as the feedstock are more affordable and environment-friendly resources.

Sudden outbreak of Coronavirus in Q4 of FY 19 has plummeted the demand for LPG in the Global LPG market, as an outcome of the lockdown imposed in various countries to prevent the spread of virus. The lockdown has brought down the demand from industries utilizing LPG for different operations as they imposed a temporary turnaround in compliance to the government norms. In addition, unprecedented dive in the value of crude primarily due to the demand destruction caused by worldwide halt in trade and travel activities, further lowered the consumption of LPG in fourth quarter of FY 19. This downfall in demand for LPG was exacerbated by the rift between major oil producing countries under OPEC, as they flooded the market with crude oil without settling to reduce its production till the situation witnessed the worse possible scenario. Owing to the record drop in prices of crude oil followed by slumped demand for LPG from major consuming sectors, prices of LPG underwent a significant downfall in in the final quarter of FY 19. Despite of the downtrend in market dynamics of LPG in Q1 of FY 20, its demand is anticipated to recover in the coming years over several Propylene projects lined up in the global Petrochemical industry like the mega expansion of Propene Dehydrogenation plant in China, utilizing LPG as feedstock. Moreover, resumption of industrial and travel activities with improvement in the condition of the Pandemic will also surge the demand for the product from next financial year.

According to ChemAnalyst report,” “Global Liquified Petroleum Gas (LPG) Market: Plant Capacity, Production, Operating Efficiency, Demand & Supply, End Use, Competition, Trade, Customer & Price Intelligence Market Analysis, 2015-2030”. USA is the global production hub for LPG, with its supply exceeding the demand in the native region. The excess refining capacity of USA allows it to engage in the global trade for the worldwide exportation of LPG to extend its profit margins. With USA comprising the major production share, a high share of demand is accounted from Asia Pacific region owing to the continuous industrial developments in countries like China and India. In 2019, Numaligarh refinery and SHV Energy Private Limited in India proposed expansion plans for hydrocarbon processing plants, thus considerably contributing in widening the production of LPG in the APAC region. Moreover, US Enterprise also announced the expansion of LPG and PGP oil capacity at Houston terminal with an aim to strengthen the export revenue for the company.

Major players operating in the Global LPG market are Exxon Mobil Corporation, British Petroleum Plc, China Petroleum and Chemical Corporation, China National Petroleum Corporation, Chevron Corporation, Royal Dutch Shell, Phillips 66, Valero Energy, Oman Oil Company, Bayegan, Petredec LPG, Reliance Industries Limited, Sinopec etc.

“Global Petrochemical industry is facing a devastating downfall amid deprived value of feedstock crude followed by plunging demand from major end-user industries. This unprecedented dive in demand for crude oil has taken down the market dynamics of its various derivatives apart from the ones being utilized in Pharmaceuticals and Specialty chemical companies. The LPG demand in the final quarter of FY 19 declined by over 6 per cent over temporary halt in operations of various end-user industries as an outcome of subdued demand due to Coronavirus lockdown. However, LPG in comparison to other crude oil derivatives witnessed low downfall owing to its persistent usage in commercial and household purposes. Market outlook for Global LPG market is likely to recover appreciably on several expansion projects of LPG derivatives lined up in China and U.S.A. in the coming years. Moreover, increasing preference of LPG over LNG due to the safety and storage benefits it offers, is expected to considerably push up the industrial demand for the product in the forecast period” said Mr. Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm promoting ChemAnalyst.

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Source : ChemAnalyst