Strong crude production to lead to increased propane production

The Permian region in western Texas and eastern New Mexico is the hotbed for domestic energy production growth. The U.S. Energy Information Administration (EIA) forecasts that U.S. crude oil production will average 10.7 million barrels per day (bpd) in 2018 and 11.7 million bpd in 2019.

If realized, both of these forecast levels would surpass the previous record of 9.6 million bpd set in 1970. The Permian region is expected to account for more than half of the growth in crude oil production through 2019, EIA says. This strong growth in crude production will lead to gas plant production growth and therefore more propane production. Permian gas supply will more than double from 2017-23, causing a need for more gas processing capacity, says Debnil Chowdhury of IHS Markit.

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