US propane production on the rise in 2017

July 5, 2017 By and    

Growth in U.S. propane production has slowed from the breakneck pace of recent years, but it’s still on the rise in 2017. In fact, some of the latest estimates on production (shown in blue in the graphic below) from the U.S. Energy Information Administration (EIA) have been quite robust.

Official monthly data from EIA shows fuel-use propane supply is up 20,000 barrels per day (bpd) between the first quarters of 2016 and 2017. The chart shows combined fuel-use production from natural gas processing and refineries. In the first quarter of 2017, production was at 1.455 million bpd compared with 1.435 bpd in 2016.

Production tends to increase through the summer. Weekly estimates from EIA have supported the same for this year. Estimates for April, May and June show a substantial increase over 2016 production rates.

Using EIA’s weekly estimates on propane and propylene production for those months and then backing out our estimate on propylene, we believe fuel-use propane supplied around 1.512 million bpd in April, 1.558 million bpd in May and 1.578 million bpd in June.

Earlier this year, we estimated that total fuel-use propane production would average 1.511 million bpd in 2017, up 50,000 bpd from 2016. We think we are on track to post a yearly average close to that in 2017. The average production is estimated at 1.502 million bpd year-to-date.

As drilling for natural gas has slowed in the United States, so has the rate of growth in propane supply. For example, propane supplied from natural gas processing was 184,000 bpd higher in 2015 than it was in 2014. However, the increase between 2015 and 2016 was just 15,000 bpd.

In the first quarter of 2017, propane production from natural gas processing averaged 13,000 bpd higher than it did during the same time frame last year. Increased fuel-use supply from refineries was up 7,000 bpd in the first quarter of 2017 compared with the same period in 2016.

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