LPG and ethane demand will grow 1.9pc annually in the 2022-28 period, leading to compound growth of 1.7mn b/d, or 12pc, to 15.9mn b/d, the IEA said today.
According to the group's new medium-term outlook Oil 2023, the demand growth is in large part driven by rising petrochemical feedstock demand in Asia-Pacific, where the 2022-28 gain is forecast at 800,000 b/d, approaching half of total, at an annualised rate of 2.5pc.
China is in particular adding significant petrochemical capacity and will see its share of global olefins feedstock demand grow from 14pc in 2019 to around 26pc by 2025-28, according to the report. China "benefits from a policy prioritisation of economic self-sufficiency amid escalating geopolitical tensions", which motivates it to reduce any reliance on polymer imports, the IEA said.
China will add 500,000 b/d of LPG and ethane demand in 2022-28, almost a third of the global sum, at an annualised rate of 3.8pc, according to the report.
The agency forecasts petrochemical sector thirst for feedstock — including naphtha, LPG and ethane — to drive 50pc of the rise in total oil demand growth from 99.8mn b/d in 2022 to 105mn b/d in 2028.
Beyond the petrochemical sector, the IEA notes strong growth in LPG consumption in Africa where it leads refined product growth adding 150,000 b/d in the 2022-28 period at 4.7pc a year. Residential heating and cooking fuel use, at the expense of traditional biomass, will be "aided by government policies that incentivise the use of LPG, a clean cooking fuel."
Elsewhere, North American LPG and ethane growth is anaemic at 0.1pc in the period, and European demand will rise by just 1.2pc, although for both regions the IEA forecasts declines in demand for many oil products.
