The country's extensive LPG infrastructure and rising output are a strong foundation for growing trade, write Matt Scotland and Efcharis Sgourou
Turkey's LPG production and exports grew strongly in the first seven months of this year, opening up new regional trade opportunities as the industry expands beyond the mature domestic market, according to leading distributors.
The country's LPG demand declined by 3.1pc on the year to 2.2mn t in January-July, as the downward trend since 2023 continued, data from energy regulator EPDK show. But production — from Turkey's fleet of five refineries — rose by more than 12pc to 655,000t, while exports rose by 12pc to 414,000t. Imports edged higher to 1.97mn t, to bolster net supply.
The growth in output was mainly linked to increased refinery capacity following recent investments, as well as higher throughput, according to Ipragaz supply manager Kumru Ekmenci. The softening in demand and stable imports have enabled the sector to redirect more supply overseas, she says.
Turkey's extensive LPG infrastructure, large autogas fleet and growing domestic supply provide a strong foundation for the industry to target regional trade, according to Aygaz chief executive Melih Poyraz. "The market is increasingly creating value, not only through local consumption but through logistics, trading and export-related activities," Poyraz says.
Aygaz in July outlined the opportunities it was targeting beyond the domestic market, including a $353mn investment in three new VLGCs this year. "We currently trade 2.4mn-2.5mn t/yr [of LPG], but we want to reach 5mn t/yr in the next 10 years. We want to grow, especially in Africa and southeast Asia, which are our target markets," Poyraz said at the time.
Autogas accounts for 80-85pc of Turkish LPG demand, while cylinder gas represents around 14pc and bulk LPG makes up the remainder. Autogas sales fell to a four-year low of 1.8mn t in January-July, while cylinder sales declined to 301,300t, their lowest since at least 2017.
The Turkish industry is grappling with higher prices and inflationary pressures. But the weakness this year is more a reflection of market maturity rather than structural decline, according to Poyraz. Cylinder demand has gradually contracted as Turkey has expanded its natural gas network, while autogas retains a significant price advantage over gasoline and diesel. "The market is expected to remain broadly stable, supported by LPG's cost advantage, a large autogas vehicle fleet and its [continued] role in the energy mix."
Turkey's economic pressures have affected fuel consumption and autogas vehicle conversion rates, Ekmenci says. But she too highlighted LPG's competitive position domestically. "Turkey remains the world's largest autogas market, and LPG continues to maintain a pump-price advantage over gasoline," she says.
The petrochemical sector could provide another source of longer-term LPG demand. Turkish producer Petkim has awarded an engineering contract for a 1.2mn t/yr mixed-feed ethylene cracker and polymer units at Aliaga, which are due for completion in late 2027. The feedstock mix has not been disclosed.
