US Eyes India for Quantum Leap in LPG Exports

Trump administration trade tariffs on China will need to cease and India will have to rely more on U.S. LPG supplies for the world to clear the quantum leap expected for U.S. LPG exports, says a study.

The study of global seaborne LPG trade flows using Kpler LPG cargo tracking data questions the global LPG market’s ability to grow fast enough to handle the tsunami wave of new LPG production expected from the United States in 2020 and 2021.

"The U.S. has become the largest LPG exporter in the world and now exports more LPG than the U.A.E., Qatar and Saudi Arabia combined. Enterprise Products alone exports more LPG than any other country,” Craig Whitley, study author and CEO of World Energy Consultants.

Due to the phenomenal success in shale oil and shale gas exploration, the United States has become the world’s largest LPG exporter in recent years, shipping more LPG than the United Arab Emirates (U.A.E.), Qatar and Saudi Arabia combined.

The majority of new incremental LPG production and exports from the U.S. is expected to go to Asia. But these long-distance voyages have consumed available shipping capacity and caused LPG freight rates to skyrocket.

Tensions in the Middle East are motivating Asian LPG importers to look towards the U.S. for more secure LPG supply, but LPG price levels, arbitrage values, freight costs and shipping capacity will limit the amount of LPG that can flow to growth markets like Asia and Africa.