The Return of East of Suez LPG Production

WAKEFIELD, Mass. - June 28, 2021 - PRLog -- Increased LPG production outside the US and Canada will help satisfy Asia's growing import requirement in the run-up to winter, according to ESAI Energy's newly published Global NGL Outlook. As Asian LPG demand climbs to new highs in the second half of 2021, higher LPG production in East of Suez markets means not all this new demand will be met by US exports. This has implications for US LPG inventories and global trade flows.

East of Suez LPG production in the second half of 2021 will be higher than at any time since 2019, according to ESAI Energy's outlook. Saudi Arabia's LPG supply from associated gases will be an important growth source. In February-April 2021 when Saudi oil production was lowest, the country's fractionator LPG output was about 130,000 b/d less than pre-pandemic levels. The subsequent expansion of oil production will cause LPG production to climb in the second half of the year. Simultaneously, the continuing recovery of refining activity in the Far East and elsewhere will lead to greater refinery output of LPG.

"We are in a tricky LPG market from the perspective of both supply and inventories," explains ESAI Energy Principal Andrew Reed. "There is not significant production growth in any one place, but together it adds up to significant growth. The implications US exports vary across markets, but we certainly will see less Indian demand for US product. Market watchers are rightfully wondering whether there will be adequate stock builds ahead of winter, but we are less bullish than many."

Visit - ESAIenergy.com