ESAI: Era of Peak Demand Growth for NGLs' Nears End
(P&GJ) — NGLs’ era of “peak demand growth” will come to an end by 2025 according to ESAI Energy.
Between 2021 and 2025, Asia’s liquefied petroleum gas (LPG) import requirement will grow less than 100,000 b/d annually and the global market will flip back to surplus, according to ESAI Energy’s newly published Global NGL 5-Year Outlook.
Developments in both China and India will slow the growth of imports to Asia’s two biggest LPG markets, ESAI projects.
In the LPG market, fast expansion of the natural gas network in China will roll back household LPG use in that country, according to ESAI Energy. Meanwhile, higher prices and reduced subsidies have slowed growth in India. If in the period leading up to 2020 Asian res/comm demand grew by more than 100,000 b/d annually, going forward the growth rate will be half that amount.
Separately, ESAI Energy submits that demand for US ethane will decelerate after 2023 due to a relative lack of investment in new ethane crackers in the US. While 2021 is seeing a record increase in deliveries to overseas crackers, export growth will moderate. Consequently, global demand for US ethane will grow at a slowing pace.
“Demand growth for both LPG and ethane will slow,” explains ESAI Energy Principal Andrew Reed. “Given that the NGL fundamentals are usually shaped by supply, it is striking that we do not foresee a supply crunch that would price ethane or LPG out of the petchem feed slate. To the contrary, in a year or so we anticipate the LPG market flipping back to surplus.
"China is a microcosm of Asian demand growth. We think about China in bullish terms due to its climbing petchem demand. Due to other bearish factors, however, China may disappoint exporters.”
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- Boardwalk Approves 110-Mile, 1.16 Bcf/d Mississippi Kosci Junction Pipeline Project
- Kinder Morgan Approves $1.4 Billion Mississippi Crossing Project to Boost Southeast Gas Supply
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Enbridge Should Rethink Old, Troubled Line 5 Pipeline, IEEFA Says
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- Polish Pipeline Operator Offers Firm Capacity to Transport Gas to Ukraine in 2025
Comments