Argus LPG 2020: CIS and Global Markets

Global trends and forecasts of the LPG market were discussed at the Argus online conference

The online conference “Argus LPG 2020: CIS and Global Markets” was held on 19 November. The event was supported by the general partner, Sibur, as well as Avestra Group, Quest Group, Impexneftekhim and E-gas.

Discussions at the conference surrounded changes in the global consumption of liquefied petroleum gas (LPG); the current state and forecasts of the markets in Russia, the CIS and Europe; Russian LPG exports to China; global changes in seaborne LPG trade flows; and feedstock supplies for the Russian petrochemical industry.

More than 200 participants from 33 countries including Russia, Belarus, Ukraine, Kazakhstan, Switzerland, Austria, Germany, UK, China and others joined the online broadcast.

The conference opened with a presentation from David Appleton, head of business development at Argus, who spoke about the key trends in the LPG market in the Covid-19 era. According to Appleton, the most significant negative impact of the pandemic was seen in the transport and commercial sectors, where the total decline in consumption this year will be almost 8mn t (as estimated by Argus).

Alexey Markov, head of Sibur’s hydrocarbon feedstocks department, highlighted the key trends in Russia’s LPG market and spoke about the company’s positions in this market. In addition, he told the audience about the completion of commissioning at the Zapsibneftekhim complex in the first quarter of this year, as well as the start of construction of one of the world’s largest gas chemical facilities, the Amur Gas Chemical Complex, which will focus on the Asian market.

Gas exports to China were discussed by Ilya Zaymentsev, development director at Avestra Group. Zaymentsev noted that the potential for exports of Russian LPG to China is great, while the Chinese market is attractive for Russian suppliers because of its consistently high rate of consumption and lower dependence on global price fluctuations. He also spoke about opportunities for exports through the Manzhouli Far East Gas terminal at China’s Manzhouli station.

The global changes in LPG maritime trade flows and their impact on the European market were covered by Martin Kjendlie, senior analyst at Fearnleys. The recent upward trend in US exports to northern Europe and the Mediterranean is likely to continue in the coming year, he said.

The topic was continued by Ted Young, chief financial officer at Dorian LPG (US), who presented an overview of the LPG shipping market. He estimates 109mn t of LPG was transported by sea last year and forecasts it to decline by 3pc by the end of this year. US exports are expected to increase by 15pc this year, while shipments from the Mideast Gulf are expected to decline by 10pc. The US has become the world’s largest exporter and one of the Chinese market’s key LPG suppliers.

An overview of the LPG market in the CIS was presented by Svetlana Novolodskaya, senior editor at Argus. She discussed historical market trends over the past five years, as well as current changes and near-term forecasts. The key impact on Russia’s LPG market balance this year was the Covid-19 pandemic. LPG production in Russia increased by 126,600t in the first quarter of this year, dropped by 19pc in the second quarter and amounted to 1.1mn t in May, which was the lowest since April 2015. Over the past year, shipments to Ukraine, China, Georgia, Azerbaijan, Kyrgyzstan and Serbia increased but supplies to the Ust-Luga terminal are steadily declining. Novolodskaya also touched on the development of Ukraine’s LPG market, which continues to expand on the back of increased consumption of autogas, and the Kazakhstani market.

Leonid Kruchinin, deputy general director of Impexneftekhim, spoke about the supply of feedstocks to the Russian petrochemical industry at the end of the conference.

We thank the partners of the online conference and all of its participants. You are invited to the XV conference “Argus LPG Moscow 2021”, which will be held in April next year.