1. International LPG markets and LPG pricing outlook
October 2, 2014
International LPG markets and LPG pricing outlook
GLP Forum Mexico
Hacienda Galindo
Queretaro, Mexico
Walter M. Hart, Ph.D, P.E., Senior Director

2. Agenda World Supply World Demand World Trade Prices
GLOBAL LPG MARKETS & PRICING - OCTOBER
Agenda
World Supply
World Demand
World Trade
Prices

3. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Global LPG production is growing most rapidly in the US, the Middle East and in Asia

4. LPG production from the Middle East has some uncertainty
GLOBAL LPG MARKETS & PRICING - OCTOBER
LPG production from the Middle East has some uncertainty

5. Asia LPG production will be driven by refinery additions in China
GLOBAL LPG MARKETS & PRICING - OCTOBER
Asia LPG production will be driven by refinery additions in China

6. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
The US / Canada LPG production increase is driven by shale-sourced gas processing

7. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Latin America has some promising developments to increase LPG production

8. Agenda World Supply World Demand World Trade Prices
GLOBAL LPG MARKETS & PRICING - OCTOBER
Agenda
World Supply
World Demand
World Trade
Prices

9. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Global LPG demand growth will continue to be driven by Asia and the Middle East

10. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Residential / commercial use still claims the largest share of demand by far, but chemicals use will continue to gain share

11. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
In Asia the residential / commercial LPG markets have gained share in developing markets

12. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
In the Middle East the impressive growth in residential / commercial LPG markets is eclipsed by dramatic petrochemical feedstocks market growth

13. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Residential / Commercial LPG demand is declining in the US/ Canada - LPG demand growth will be driven by USGC PDH units

14. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
US domestic propane demand is not increasing except for the PDH units, so surplus propane must be exported

15. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Increased gas-sourced isobutane production will reduce the demand for isomerization; increased exports will be needed

16. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
The Latin America LPG demand growth rate is limited because the dominant end use is residential / commercial

17. Agenda World Supply World Demand World Trade Prices
GLOBAL LPG MARKETS & PRICING - OCTOBER
Agenda
World Supply
World Demand
World Trade
Prices

18. The United States now rivals the world’s largest LPG exporters
GLOBAL LPG MARKETS & PRICING - OCTOBER
The United States now rivals the world’s largest LPG exporters
Source: IHS Energy - Waterborne

19. The US will be the world’s largest LPG exporter
GLOBAL LPG MARKETS & PRICING - OCTOBER
The US will be the world’s largest LPG exporter

20. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Most US LPG exports are going to Latin America, but the market is limited…
Source: IHS Energy - Waterborne

21. Asia will have import growth in all sub-regions
GLOBAL LPG MARKETS & PRICING - OCTOBER
Asia will have import growth in all sub-regions

22. Agenda World Supply World Demand World Trade Prices
GLOBAL LPG MARKETS & PRICING - OCTOBER
Agenda
World Supply
World Demand
World Trade
Prices

23. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
A glut of US ethane has ethane prices following natural gas, but the other US NGLs are still tracking refined products

24. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Since about 2012, the last significant increment of US LPG exports has been moving to Asia
Source: IHS Energy - Waterborne

25. LPG competes with refined products in the Asian markets
WORLD LPG MARKET OVERVIEW/ March 2014
LPG competes with refined products in the Asian markets

26. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
The arbitrage between Asia and the United States must remain large enough to clear the US LPG markets

27. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014
Thank You!
Walter M. Hart, Ph.D., P.E. Senior Director, NGL Research & Consulting 1 (832)