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May 2017 cover


Propane supply situation draws industry’s attention
By LP Gas magazine     LP Gas magazine


Many in the propane industry have noted supply concerns in recent weeks, with increased export demand, increased production capabilities and decreased supply levels. The following are some of the latest developments LP Gas magazine has noticed regarding propane supply.

Recent discussions reveal growing concerns about propane availability

As we approach the midpoint of 2017 (which is hard to believe), the basic principles of propane supply and demand have captured much of the industry’s attention.

This column, by Editor-in-Chief Brian Richesson, offers a rundown on this year's propane inventory levels, as well as a supplier's perspective on the U.S. supply picture.

Featured photo
ICF's Mike Sloan, left, and Eric Kuhle presented a propane market outlook in April at the NPGA Southeastern Convention & International Propane Expo.

Propane industry leaders respond to supply concerns, plan next steps

Increased propane production levels and export demand, along with decreased domestic demand, have pushed the topic of propane supply to the forefront of many retailers’ minds.

According to a letter emailed to propane industry members in late April, the National Propane Gas Association and the Propane Education & Research Council (PERC) are taking steps at the federal, state and industry levels to address propane supply issues and help ensure reliable access to propane. Read more on this development.

Featured photo
Photo courtesy of PERC.

In the Know: Propane Inventory

As we head into the dog days of summer, propane inventory builds are quickly becoming the dog. Traders are watching the inventory builds closely. Every week that we do not build 2.5 million barrels or more, it adds to every future week needing a larger build than the previous week.

With this in mind, Propane Resources' Jeff Thompson provides a snapshot of the propane inventory picture going into the summer-build season.
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Other news and notes

Several items have come across our desk recently that highlight propane demand areas. Propane is converted to propylene, which is used to manufacture plastic products, at propane dehydrogenation (PDH) facilities.

Honeywell UOP commissioned the operation of the largest single-train PDH unit in China at Yantai Wanhua Polyurethanes Group Co. Also, Pembina announced that it's moving forward with a PDH facility in Alberta, Canada.

Two PDH plants are in operation in the United States – at PetroLogistics in Houston and Dow Chemical in Freeport, Texas. An Enterprise Products Partners plant is under construction, and the potential exists for a host of other facilities in the U.S. and Canada, ICF reports. Until these other projects come to fruition, ICF looks for petrochemical demand to slow through 2025.

Propane exports is one demand area that has seen a great deal of activity in recent years. Royal Vopak and AltaGas Ltd. entered into a joint venture agreement to invest in the development of the Ridley Island Propane Export Terminal. The terminal is expected to be the first propane export facility off the west coast of Canada, located near Prince Rupert, British Columbia.


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