China’s LPG Storage Boom: Growth and Security

Matt Scotland: Hello and welcome to the latest Global LPG Conversations podcast from Argus Media. I'm Matt Scotland, editor of LPGWorld, our twice monthly publication featuring in-depth analysis of key global market trends. I'm joined today by my colleague Celia Chen, Argus' lead LPG analyst based in Shanghai, China.
Hi, Celia.

Celia Chen: Hi, Matt. Glad to join your session.

Matt Scotland: Today we're going to be discussing the July release of LPGWorld Quarterly Storage Survey, which updates our list of LPGas and ethane storage facilities in Asia Pacific, as well as major storage projects taking place around the world.
China again dominates regionally and globally when it comes to new LPGas and ethane storage projects, adding 13 more with a combined capacity of more than 700,000 tons, as the country's appetite for imported natural gas liquids continues to swell.
But is this growth now at risk? Chinese LPGas importers have faced significant supply disruptions in the past two years, first from the US-China trade war in 2025, and then from the Iran war since late February this year. Celia, how are these challenges reshaping the country's LPGas and ethane storage?

Celia Chen: Yeah, well, maybe firstly, let's look at some LPGas numbers.
More than 400,000 tonnes of new LPGas storage capacity is expected to come online in China over the next two years, with 47% allocated to propane and 43% to built-in, the share of new built-in storage is significantly higher than Builtain's current 25% share of existing LPGas storage capacity.
One key driver is the US-China trade conflict, which has promoted Chinese importers to source more LPGas from the Middle East, where supplies are generally richer in butane. As a result, market participants are building infrastructure to handle a greater proportion of mixed cargoes. For example, a pH plant in Dong Wang is constructing A dedicated built-in tank to receive more split cargoes from the Middle East.
Another consequence of the U.S.-China trade conflict has been the rapid expansion of ethane storage capacity.
As the US remains the world's only major ethane exporter, Chinese authorities have stopped approving new ethane-feed steam crackers since trade tensions escalated last year.
However, the situation has also created new opportunities. Instead of building new ethane-feed crackers, many existing crackers are retrofitting their furnaces to process ethane, which requires the construction of new ethane storage facilities.
Several crackers have completed, or are planning ethane retrofits, supporting a further growth in China's ethane consumption.
Unfortunately, the outbreak of the Iran war earlier this year has created additional uncertainty for storage investors. To minimise potential losses, some developers have postponed the commissioning of new storage projects.
One storage owner told me that once the terminal starts operating, its profit and loss performance is immediately measured.

Matt Scotland: And has the Mideast Gulf conflict boosted interest in investing in storage, given the loss of supply from the region?

Celia Chen: Actually, the answer is yes. The uncertain geopolitical landscape has also encouraged both LPGas and ethane importers to expand their storage infrastructure. By increasing storage capacity, companies can hold larger inventories of feedstocks and better manage potential supply disruptions. For example, an ethane and LPGWorld feed steam cracker in Zhai Jiang is building a new ethane storage tank to strengthen supply security. Meanwhile, a nearby LPGWorld wholesaler is also building additional LPGas tank to increase inventory levels if necessary.

Matt Scotland: Do you think this could change the storage investment calculus in future years?

Celia Chen: Yes, currently, to some extent, investors are shifting their focus from simply meeting operational needs to strengthening supply security. Recent geopolitical events have highlighted the risks of supply disruptions, making additional storage capacity an important tool for risk management.
As a result, some companies are willing to invest in larger storage facilities. A notable example is Ng L feed stem crackers new storage terminal, which is designed with a capacity of 216,000 ton accounting for around 30% of the new storage projects under development.

Matt Scotland: And do you think China might look to develop a strategic LPGWorld reserve similarly to Japan?

Celia Chen: Oh, this reminds me, you know, three to four years ago, a large PDH producer in Eastern China adopted a similar strategy and built a massive 1 million tonne underground story to Kevin in Ningbo. Unlike strategic reserves designed for residential consumption. The facility was intended to store propane for PDH use, enabling the company to secure sufficient feedstock during the winter heating season when propane supply typically tightens and prices rise.
However, following the U.S.-China trade tensions and the outbreak of the Iran Wall, the Calvin has remained idle.
Global propane supply has become increasingly tight, limiting opportunities to build inventories in past two years. At the same time, market uncertainty has significantly narrowed or eliminated the traditional seasonal price differential of.
Therefore, it may take some time before market conditions become favourable enough for the cabin to be fully utilized.

Matt Scotland: Yeah, it's fascinating. One thing that's really emerged, I think, for me since the war started is the growing awareness in most markets of the need for more storage capacity to protect them from future supply disruptions. I think that's something that's likely to support investment in the coming years in China.
as well as across Asia and the rest of the world. Celia, thank you so much for joining us today to give us your insight.

Celia Chen: Yeah, welcome, and thank you, Matt.

Matt Scotland: Thanks. And to our listeners, the Global LPGas Storage Survey is available to subscribers of LPGWorld as a downloadable spreadsheet through Argus Direct. The third quarterly instalment of the survey was released at the end of September, which updated North America and Latin America. That's all for this edition of Global LPGas Conversations. Please tune in to our next instalment and thanks again for listening. Goodbye.