Traders in the global oil markets, oil producers and analysts said that exports of liquefied petroleum gas ‘propane’ and ‘butane’ (LPG) from the major producers in the Middle East are expected to increase during 2022 by 6.6%, compared to 2021, in light of the intensification of competition for the growing Asian markets, amid the oversupply of other producers, led by the United States.
In this context, Al-Anba has learned that the Hellenic Shipping website, citing well-informed oil sources, stated that the total exports of LPG from Qatar, the UAE, Saudi Arabia, Kuwait and Iran are expected to rise from 36.5 million metric tons last year to 38.9 million metric tons in 2022.
The sources added that most exporters are committed under fixed-term contracts, although Qatar sometimes provides propane gas in spot deals, but Qatar’s exports in 2022 are expected to remain steady at about 10 million metric tons, followed by the UAE with exports of 9.9 million tons, then Saudi Arabia at 8.6 million metric tons.
While one of the informed sources said that Kuwait’s exports of propane and butane are expected to reach about 5 million metric tons during 2022, as the sources estimated that this figure would rise from about 4.6 million tons in 2021, an increase of 8.6%.
It should be noted that Kuwait’s production of liquefied petroleum gas will range between 5.2 and 5.3 million metric tons in 2022, and exports will be about 5 million metric tons, i.e., about 94% of its total production will be exported. The source familiar with the matter said that the domestic demand ranges between 250 thousand and 300 thousand metric tons, and that there will be larger quantities during this year.
The source said that unlike in 2021, not many spot offers and exports are expected this year, and there will only be a few such deals in the second half of this year.
Last June, KPC sold, through a semi-annual tender, 3 mixed shipments of propane and butane, each amounting to 44,000 metric tons, for delivery between July and September. This was followed five spot export bids awarded by KPC, respectively.
The source said 2021 was unique referring to the huge spot trading volumes, and said this may be due to the start-up of the fifth gas line in Kuwait, located in the Mina Al-Ahmadi refinery, and the addition of 440,000 metric tons per year, or between 9 and 10 shipments per year in the second quarter of 2021.
An industrial analyst expected that Saudi Arabia, Kuwait, the Emirates, Qatar and the Sultanate of Oman would raise exports by 1.5 million tons this year.
Trade sources said India would remain the main importer of shipments from the Middle East to secure the supplies needed to fuel the steady growth in residential and commercial demand.
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