LPG ( NGL) er fortsatt veldig lukrativt for India,Asia og Kina
Lav oljepris gjør at produksjonen av NGL-gasser går ned, noe som ikke samsvarer med behovet som er der ute. På sikt vil dette skape trøbbel for de som trenger disse produktene. Hvordan dette vil påvirke LPG-ratene, vet ikke jeg, men rent historisk skal ratene stige når oljeprisen faller. Husk på at vi bare er i begynnelsen av April, India tar imot det de klarer av LPG og ikke minst Kina har startet produksjonen igjen.
Jeg er optimistisk og forventer at LPG-ratene skal styrke seg mot sommeren.
Lower crude prices will erase all expected US natural gas liquids production growth through 2021
09 April 2020 Veeral Mehta
The combined one-two punch of ongoing demand destruction wrought by coronavirus (COVID-19) and obstinate overproduction by several key countries has sent crude prices reeling. As of early April, WTI was pricing in the mid-20 dollars per barrel range, with some heavier crudes in the teens or even single digits. And given that the demand impact will linger after COVID-19 has been brought to heel - and that US crude production is particularly vulnerable to low prices - IHS Markit is forecasting a significant (>26%) decline in American oil output.
This, in turn, will have a significant impact on the production of "associated" natural gas. That is, natural gas production that comes from the same well as crude oil. IHS Markit expects such associated US gas output to fall by around 20% over the next two years. Some of this will be offset by higher "non-associated" production but, overall, US gas output is still poised for a major pullback in the coming years due to the ongoing low-price environment.
Lower natural gas output will, unsurprisingly, have an impact on production of the natural gas liquids (e.g. ethane, propane) that are derived from the gas stream. These natural gas liquids (NGLs) are a relatively important - and lucrative - link in the hydrocarbon value chain. They have myriad uses, perhaps most irreplaceably as precursors in the production of petrochemicals and plastics. And mirroring the surge in US natural gas output recently, field NGL production increased by 27% between 2017 and 2019.
Figure 1: US natural gas liquids production outlook
Prior to COVID-19, IHS Markit had expected US NGL production to continue its strong growth, with a nearly 19% increase forecasted by 2021. This growth will stall in the wake of COVID-19 but, notably, US NGL output is not expected to decline significantly between 2019 and 2021. Natural gas output will, as noted, decrease but a lower rate of ethane rejection (ethane being left in the gas stream) will keep total NGLs production more or less flat over the next two years. However, given that US and (especially) global demand for NGLs is still forecast to grow in the next two years, this US NGL "reset" could spell trouble for the petrochemical supply chain.
Veeral Mehta is a director on the Midstream Oil and Natural Gas Liquids (NGL) group at IHS Markit.
Posted 09 April 2020
Jeg er optimistisk og forventer at LPG-ratene skal styrke seg mot sommeren.
Lower crude prices will erase all expected US natural gas liquids production growth through 2021
09 April 2020 Veeral Mehta
The combined one-two punch of ongoing demand destruction wrought by coronavirus (COVID-19) and obstinate overproduction by several key countries has sent crude prices reeling. As of early April, WTI was pricing in the mid-20 dollars per barrel range, with some heavier crudes in the teens or even single digits. And given that the demand impact will linger after COVID-19 has been brought to heel - and that US crude production is particularly vulnerable to low prices - IHS Markit is forecasting a significant (>26%) decline in American oil output.
This, in turn, will have a significant impact on the production of "associated" natural gas. That is, natural gas production that comes from the same well as crude oil. IHS Markit expects such associated US gas output to fall by around 20% over the next two years. Some of this will be offset by higher "non-associated" production but, overall, US gas output is still poised for a major pullback in the coming years due to the ongoing low-price environment.
Lower natural gas output will, unsurprisingly, have an impact on production of the natural gas liquids (e.g. ethane, propane) that are derived from the gas stream. These natural gas liquids (NGLs) are a relatively important - and lucrative - link in the hydrocarbon value chain. They have myriad uses, perhaps most irreplaceably as precursors in the production of petrochemicals and plastics. And mirroring the surge in US natural gas output recently, field NGL production increased by 27% between 2017 and 2019.
Figure 1: US natural gas liquids production outlook
Prior to COVID-19, IHS Markit had expected US NGL production to continue its strong growth, with a nearly 19% increase forecasted by 2021. This growth will stall in the wake of COVID-19 but, notably, US NGL output is not expected to decline significantly between 2019 and 2021. Natural gas output will, as noted, decrease but a lower rate of ethane rejection (ethane being left in the gas stream) will keep total NGLs production more or less flat over the next two years. However, given that US and (especially) global demand for NGLs is still forecast to grow in the next two years, this US NGL "reset" could spell trouble for the petrochemical supply chain.
Veeral Mehta is a director on the Midstream Oil and Natural Gas Liquids (NGL) group at IHS Markit.
Posted 09 April 2020
Redigert 21.01.2021 kl 01:51
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Is India the Marginal Demand Market for Global Butane?
22 October 2019 Yanyu He, Ph.D.
Global LPG supply has become abundantly available in recent years, owing largely to strong production and exports out of the United States. As the global LPG supply base expands, the global waterborne trade market is expected to grow significantly to about 105 million metric tons this year, compared with 95 million metric tons in 2018 and 60 million metric tons early in the decade.
The abundance of both propane and butane supply has pushed down their price ratios against crude oil and naphtha across the United States, Europe, and Asia, incentivizing LPG cracking, i.e., displacing alternative feedstocks (e.g., ethane, naphtha), to make ethylene. Another development from the excess LPG supply is the narrowing butane-to-propane price premium. Increased supply incentivizes demand-side competition between propane and butane, based on the relative economics, for example in the domestic and steam cracking end-use markets.
Indian LPG demand has significantly grown in recent years as the government pushes for cleaner fuel, especially for the women in below-poverty-line (BPL) households, under the Pradhan Mantri Ujjwala Yojana (PMUY) program. The country's LPG imports grew from about 4 million metric tons in 2010 to an estimated 14 million metric tons this year, becoming the second-largest consumer of LPG in the world after China. With about 7 million metric tons of butane imported in 2019, India is the largest butane importer globally.
The PMUY program has just recently reached the targeted 80 million households, resulting in overall LPG penetration of 95%, compared with 55% five years ago. It will be interesting to see how the demand trajectory will look in the coming years. On one hand, the increase in LPG demand due to the PMUY scheme poses a challenge for refill owing to affordability issues as it targeted BPL households. According to the recent refill data published by the Indian government, the national average for PMUY beneficiaries is about 2.4, which is about half of the average rural refill rate of 4.7. On the other hand, the organic growth on the back of the country's relatively strong economic growth outlook and ongoing LPG infrastructure development should continue to drive the country's LPG demand and imports.
The residential sector accounts for about 90% of India's total LPG consumption where it is used as a cooking fuel. India's domestic market has traditionally favored butane for its higher heat content and easier to handle than propane cylinders due to butane's lower vapor pressure. However, the propane and butane composition can shift within a certain range based on the relative prices between propane and butane.
The figure above shows India's total LPG imports since 2010, along with the butane share of the imported LPG. As the country's domestic demand grows, and with the increasing availability and relatively cheaper propane, butane's share has decreased from about 75% in 2010 to the current 55%, which in turn helped narrow the butane-to-propane price premium. The propane share in India's LPG cylinders cannot be too high (no higher than about 50%, according to industry estimates) owing to the industry configuration and safety concerns. However, in a scenario where butane prices further weaken or even move below propane, butane demand could return to the domestic sector.
India's LPG imports account for about 13% of global LPG waterborne trade and 20% of global butane waterborne trade. In other words, India plays an important role in the global butane market, as China does in the global propane market. As India continues to grow demand and strive to lower its overall imported LPG costs, IHS Markit expects the country to have both the size and flexibility to help balance global butane consumption, thus stabilizing the propane versus butane price relationship.
22 October 2019 Yanyu He, Ph.D.
Global LPG supply has become abundantly available in recent years, owing largely to strong production and exports out of the United States. As the global LPG supply base expands, the global waterborne trade market is expected to grow significantly to about 105 million metric tons this year, compared with 95 million metric tons in 2018 and 60 million metric tons early in the decade.
The abundance of both propane and butane supply has pushed down their price ratios against crude oil and naphtha across the United States, Europe, and Asia, incentivizing LPG cracking, i.e., displacing alternative feedstocks (e.g., ethane, naphtha), to make ethylene. Another development from the excess LPG supply is the narrowing butane-to-propane price premium. Increased supply incentivizes demand-side competition between propane and butane, based on the relative economics, for example in the domestic and steam cracking end-use markets.
Indian LPG demand has significantly grown in recent years as the government pushes for cleaner fuel, especially for the women in below-poverty-line (BPL) households, under the Pradhan Mantri Ujjwala Yojana (PMUY) program. The country's LPG imports grew from about 4 million metric tons in 2010 to an estimated 14 million metric tons this year, becoming the second-largest consumer of LPG in the world after China. With about 7 million metric tons of butane imported in 2019, India is the largest butane importer globally.
The PMUY program has just recently reached the targeted 80 million households, resulting in overall LPG penetration of 95%, compared with 55% five years ago. It will be interesting to see how the demand trajectory will look in the coming years. On one hand, the increase in LPG demand due to the PMUY scheme poses a challenge for refill owing to affordability issues as it targeted BPL households. According to the recent refill data published by the Indian government, the national average for PMUY beneficiaries is about 2.4, which is about half of the average rural refill rate of 4.7. On the other hand, the organic growth on the back of the country's relatively strong economic growth outlook and ongoing LPG infrastructure development should continue to drive the country's LPG demand and imports.
The residential sector accounts for about 90% of India's total LPG consumption where it is used as a cooking fuel. India's domestic market has traditionally favored butane for its higher heat content and easier to handle than propane cylinders due to butane's lower vapor pressure. However, the propane and butane composition can shift within a certain range based on the relative prices between propane and butane.
The figure above shows India's total LPG imports since 2010, along with the butane share of the imported LPG. As the country's domestic demand grows, and with the increasing availability and relatively cheaper propane, butane's share has decreased from about 75% in 2010 to the current 55%, which in turn helped narrow the butane-to-propane price premium. The propane share in India's LPG cylinders cannot be too high (no higher than about 50%, according to industry estimates) owing to the industry configuration and safety concerns. However, in a scenario where butane prices further weaken or even move below propane, butane demand could return to the domestic sector.
India's LPG imports account for about 13% of global LPG waterborne trade and 20% of global butane waterborne trade. In other words, India plays an important role in the global butane market, as China does in the global propane market. As India continues to grow demand and strive to lower its overall imported LPG costs, IHS Markit expects the country to have both the size and flexibility to help balance global butane consumption, thus stabilizing the propane versus butane price relationship.
Redigert 21.01.2021 kl 01:51
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