Keeping up with trends in exports, petrochemicals

March 28, 2016 By    


Exports and petrochemicals are two propane demand areas we reference often in Trader’s Corner. They’ve become more of a popular topic for us — and propane retailers — because each market has experienced an increase in propane gallon consumption in recent years.

Propane market analysts who speak at industry events emphasize the importance of these demand areas to propane retailers for a couple of reasons. Retailers are often consumed by their day-to-day business operations and could easily overlook trends taking place in nontraditional markets, especially when some of this activity is happening away from our borders. In addition, exports and petrochemicals consume a significant amount of propane volume, potentially impacting the U.S. supply situation and prices.

As Debnil Chowdhury of IHS told attendees of the National Propane Gas Association’s 2016 Winter Board of Directors Meeting in early February in Savannah, Ga., “The same propane you’re selling here to your customers could be destined to other parts of the world.”

We reference these two demand areas again this week because they have made news headlines recently. These headlines help demonstrate trends in exports and petrochemicals and an increase in infrastructure investments.

exports-650The U.S. Energy Information Administration (EIA) released a report March 16 outlining an increase in U.S. petroleum product exports, including propane. The agency says U.S. exports of propane averaged 615,000 barrels per day (bpd) in 2015, up 193,000 bpd from the previous year. These exports are mainly headed to Asia, averaging 220,000 bpd in 2015, an increase of 138,000 bpd from 2014, EIA reports. Low propane prices have encouraged companies to expand propane export capacity, EIA adds.

Asia is seeing this increase in propane consumption due to the petrochemical sector and significant growth in propane dehydrogenation (PDH) capacity. PDH plants basically convert propane into propylene, which is used in the production of plastics. China has seven operational plants, consuming an estimated 200,000 bpd of propane feedstock, according to a 2015 report from EIA. Other PDH plants in Asia consume an additional 50,000 bpd.

Within U.S. borders, two companies are currently operating PDH plants – Flint Hills Resources in Houston (consuming 30,000 bpd) and Dow Chemical in Freeport, Texas (consuming 35,000 bpd). Earlier this month, Dow Chemical said it completed a performance test, certifying that its unit is operating at full capacity.

According to ICF International, two plants are under construction for 2017 – Enterprise Products Partners in Chambers County, Texas (which will consume about 35,000 bpd), and Formosa Plastics in Point Comfort, Texas (which will consume about 31,000 bpd). Four additional plants are planned beyond 2017.

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at or 216-706-3748.

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