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Propane is a saturated C3hydrocarbon and is obtained from natural gas processing
or petroleum refinery operations. Gas processing plants extract propane as
a natural gas liquid (NGL), either from gas wells or from gas associated with
crude oil production. Central fractionators split propane from NGLs; some gas
plants also have fractionation facilities. Refiners isolate propane as a distilled
fraction from crude petroleum. Refining processes such as catalytic cracking,
reforming and hydrocracking also yield propane as one component in a product
spectrum. Propane is used for fuel and as a petrochemical feedstock. Feedstock
use is mostly in the production of ethylene, where it competes with other natural
gas liquids, naphtha and gas oil.
For many regions of the world, separate data on propane supply/demand are
not available. Published information often includes the entire liquefied petroleum
gas (LPG) stream, from which propane can be extracted. Propane can account
for as much as 90% of LPG, depending on the feedstock, region and processing
conditions.
The following chart gives an idea of the supply/demand for propane/LPG for
selected regions as a percentage of each region’s total supply or demand.
The Other Asia region includes China, Hong Kong, India, Indonesia, Republic
of Korea, Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan
and Thailand.
Trends that will have a significant effect on propane’s global production,
consumption and trade over the next several years include those discussed in
the following paragraphs.
The availability of supplies coming out of the Middle East and North Africa
will be a factor. There is a continuing trend in the Middle East to use more
LPG for domestic consumption, which will result in decreased supply for exports.
Growth in domestic demand in the Middle East has occurred mainly in the petrochemical
markets. The start-up of large petrochemical projects that use LPG as feedstock
has contributed to this growth.
In South America, production and export capabilities will be expanding in
the future. LPG production grew at an average annual rate of 14% between 2001
and 2005. LPG consumption grew at an average annual rate of almost 14% during
that period. By 2010, LPG production is expected to exceed 28 million metric
tons and LPG consumption is expected to exceed 31 million metric tons.
In Asia, LPG production grew at an average annual rate of almost 6% between
2001 and 2005. LPG consumption grew at an average annual rate of about 4% during
that period. Asia has become the world’s second-largest LPG consuming
region, after North America. In 2005, LPG consumption in Asia was over 68 million
metric tons. Within Asia, Japan and China are the largest consumers. Chinese
demand for LPG will continue to grow but not at the levels exhibited in the
past. Japanese LPG demand will remain flat or slightly decline in the next
five years. Most of the demand growth in Asia is in the residential/commercial
market. Overall, Asia is expected to become the largest LPG consuming region
by 2010, surpassing North America.
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