Shale gas development altering LPG demand, trade

The LPG market in the US is experiencing a remarkable transformation due to the rapid increase in supplies being produced from both tight oil and shale gas formations. This production has resulted in shifting global LPG trade patterns as the US continues to move from a net importer of LPG to a net e...

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Bibliographic Details
Published in:The Oil & gas journal 2013-06, Vol.111 (6), p.92-97
Main Authors: LEIJA, Fernando, GIST, Ronald L
Format: Magazinearticle
Language:English
Subjects:
Applied sciences
Coalbed methane
Construction
Consumption
Crude oil
Crude oil, natural gas and petroleum products
Demand
Energy
Energy industry
Ethane
Exact sciences and technology
Exports
Feedstock
Fuels
Infrastructure
International trade
LPG
Markets
Mineral rights
Natural gas prices
Natural gas reserves
Petrochemicals
Petroleum refineries
Shale gas
Shales
Supplies
Supply
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Summary:The LPG market in the US is experiencing a remarkable transformation due to the rapid increase in supplies being produced from both tight oil and shale gas formations. This production has resulted in shifting global LPG trade patterns as the US continues to move from a net importer of LPG to a net exporter. Although international base demand for LPG will continue to grow, rising LPG supplies from shale gas may create opportunities beyond traditional markets, such as on-purpose propylene production. The contribution to LPG production of tight oil and shale gas is evident in global supplies. As a result of the development of US shale gas plays, ethane prices have been low relative to other ethylene plant feedstocks. Thus, petrochemical companies have been taking the opportunity to utilize this cheap ethane feedstock through steam cracker conversions, additions, and planned new builds. A key question for the future of the NGL industry is whether the North American success story can be replicated in differing geologic, political, and business climates.
ISSN:0030-1388
1944-9151