Argentina LPG liberalisation to foster market expansion

: LPG
26/01/06

Higher LPG output spurred by rising investment could push seaborne exports above last year's record, writes Giovann Rosales

Argentina's deregulation of its LPG market after decades of government intervention is expected to drive growth in LPG production and exports this year.

The country's LPG market has undergone a dramatic shift after being liberalised in 2025. For decades, the Argentinian government capped domestic LPG production and prices, and required local suppliers to sell at a government-calculated export parity price that was published monthly. The government continues to publish the export parity price, but sellers no longer need to adhere to it, which will allow natural gas and NGL producers to reap higher margins from their production, and greater price competitiveness.

Less government intervention is already spurring additional investment in infrastructure to tap the estimated 308 trillion ft³ (8.7 trillion m³) of natural gas reserves in the Vaca Muerta formation and to capture the associated NGLs. Argentina's two main seaborne LPG exporters have projects under way to boost output and exports. Natural gas firm Mega plans to bring a new NGL fractionation train on line at its Bahia Blanca plant in early 2026 that will help boost NGL production to around 7,000 t/d (2.6mn t/yr). "Today we produce around 4,800 t/d of ethane, propane, butane, and natural gas," Mega chief executive Tomas Cordoba said at an energy conference in December. The $260mn project will be finished in the first quarter, he said, with the additional volume to target export markets.

Domestic counterpart TGS is working on a $300mn project to process Vaca Muerta's natural gas that contains "20-25pc of liquifiable components", TGS chief executive Oscar Sardi said at the same event. This includes a storage facility in Puerto Galvan, a 600km pipeline and an NGL fractionation plant in Bahia Blanca. The 43mn m³/d plant will be able to produce around 7,700 t/d of NGLs, and "since Argentina has its LPG needs satisfied, this will be exportable", Sardi said. The timeline for the project is unclear, but Sardi said an engineering phase is complete.

These projects are expected to further boost Argentina's seaborne LPG exports, which rose by 27pc to a record high of around 1.1mn t last year, according to Kpler. Brazil took 735,000t, or 68pc of this supply, and may continue to capture more of Argentina's rising output this year (see p9). Brazil's LPG demand is forecast to grow by about 4-8pc this year as a result of the recently launched Gas do Povo subsidy scheme for low-income households, as well as an improving economy, datafrom Brazil LPG association Sindigas and state-owned research institute Epe show. The country's main distributors — Copa Energia, Nacional Gas, Supergasbras and Ultragaz — account for nearly 90pc of Brazil's market and have confirmed that incremental demand will be met by imports from the US and Argentina.

Argentina also re-emerged as an LPG supplier to China last year owing to the US-China trade war, shipping 115,000t — the first LPG trade between the countries in five years. And it is positioning itself as a key South American LPG supplier through overland exports to landlocked neighbours.

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26/01/06

Asian butane prices to remain firm amid shifting trade

Rising regional competition for imports will continue to support prices, writes Frances Goh Singapore, 6 January (Argus) — Northeast Asian butane prices are likely to remain at a premium to propane in 2026 as geopolitical tensions continue to alter global LPG trade flows. The trade battle between the US and China last year upended established LPG trade flows , with US propane cargoes destined for China being diverted to markets such as Japan and northwest Europe from early April, and mixed propane-butane shipments heading increasingly to south and southeast Asia, while China brought in more propane-butane shipments from the Middle East. The butane Argus Far East Index (AFEI) for northeast Asian deliveries averaged a $34/t premium to its propane equivalent in the fourth quarter of 2025 despite the onset of winter, which typically boosts demand for propane for heating ( see graph ). China's propane demand in 2025 came largely from the petrochemical sector , specifically propane dehydrogenation (PDH) plants and crackers. But import growth slowed to about 3pc, compared with 9pc in 2024, because of the effect of tariffs. Demand for butane imports in China meanwhile grew strongly following the opening of five new plants to produce gasoline additive MTBE with a combined capacity of 3.4mn t/yr, which lifted arrivals by nearly 50pc to 7.9mn t. Securing butane mostly from the Middle East has become more challenging for China because it has to compete with India's growing demand. India's butane imports grew by around 11pc to 11.2mn t last year, Kpler data show. The slowing in China's demand growth for propane from its PDH sector because of negative margins and from crackers as they switch to cheaper naphtha and ethane feedstock means butane could become the driving product in 2026. This is compounded by only three new PDH plants being due to open in China this year. New butane-fed crackers in south China are expected to consume 1.5mn-2.5mn t in 2026. India's continuing LPG consumption growth last year , in defiance of expectations that it would slow or even contract as the domestic market nears saturation, could also be boosted by the commissioning of the 2,800km Kandla-Gorakhpur LPG pipeline , which will connect India's west coast import terminals and refineries to inland demand centres all the way to the north of the country. A combination of population growth, rising GDP and government incentives to diversify 10pc of LPG imports to the US has lured more Asia-focused traders to the Indian import market, which has historically been dominated by Mideast Gulf producers. US firm P66, as well as supplying two of four monthly US propane-butane cargoes to India this year under the first ever US-India term contract, is also due to supply one cargo a month to Indonesia for the first time. This is a deviation from its traditional northeast Asian markets, where it has been one of the largest butane suppliers. Crack apart This shift in US exports left butane buyers in Japan and South Korea short of available cargoes, while Mideast Gulf sellers shipped more propane-butane to China. Japan's butane imports fell by about a fifth to 1.4mn t last year, while South Korea's eased by 2.2pc to just under 2.1mn t, Kpler data show. Yet spot demand in both markets grew in 2025 because of favourable cracking economics for the feedstock, boosting AFEI prices. Weakness across the LPG complex kept butane AFEI prices about $38/t below naphtha equivalents from April-December, boosting demand from northeast Asian flexible crackers. Spot offers for 23,000t butane cargoes fluctuated from $40/t discounts to parity to naphtha during the nine months, underscoring butane's strength in an illiquid market. Japanese and South Korean importers are meanwhile likely to secure more butane under term contracts from the US and Australia this year, given reduced spot availability from the US and Middle East, further reducing liquidity. AFEI prices 2025 AFEI, naphtha Japan forecast 2026 Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US ethane output growth to slow in 2026

26/01/06

US ethane output growth to slow in 2026

The approach of maximum recovery in the Permian and a rising focus on less liquids-rich acreage will limit ethane growth prospects, writes Joseph Barbour Houston, 6 January (Argus) — US ethane production growth may slow this year because the largest gas processors are operating at near-maximum recovery rates, limiting scope to increase supply. US ethane production, or "recovery", from gas processing surged to 2.87mn b/d (59mn t/yr) in 2024 from 1.27mn b/d in 2016, when the US began waterborne exports of ethane, data from government agency the EIA show, with ethane output growing by 20pc/yr in 2018 alone. But the pace of growth may be slowing. The EIA forecasts ethane recovery to have averaged 3.06mn b/d last year and to rise to 3.15mn b/d in 2026, in its latest Short-Term Energy Outlook (STEO), annual gains of 6.6pc and 2.9pc, respectively. This means production growth has slowed consistently since 2022, when it stood at 12pc, dropping to 8.1pc in 2024. This is partly attributable to an easing in the expansion of natural gas production, with marketed output — excluding volumes from Alaska and the Gulf of Mexico — rising by only 0.5pc in 2024 from 2023, the slowest since the pandemic hit in 2020. Gains in US ethane production have far outpaced those of natural gas over the past 10 years. Onshore gas output rose by 50pc from 2016 to 2024, while ethane yields more than doubled. But this trend may stall as the US gets closer to recovering near-maximum levels of ethane from the gas stream, giving less headroom for far higher growth. The robust increase in overall yields of natural gas liquids (NGLs) may also further slow relative to natural gas this year as a result of US producers targeting "drier" gas acreage — reservoirs with lower NGL content. "A lot of the growth we expect to see for crude and gas output is coming from the Haynesville formation [in Texas and Louisiana]… where it's a lot less liquids-rich," STEO contributor Joshua Eiermann told Argus . Ethane, which is a by-product of "wet" natural gas, is left in the gas stream — or "rejected" — if it is not economical to separate it for use as a petrochemical feedstock in ethylene steam crackers. The US is rejecting less ethane than it did in the past. It rejected 500,000-575,000 b/d in 2017 , or at least a quarter of the total, while such volumes stood at 600,000-800,000 b/d in 2025 based on industry estimates , which equates to about 16-21pc of the total, based on EIA estimates. Much of the US' NGL production growth in recent years has been driven by the Permian basin in Texas and New Mexico, which is close to full ethane recovery rates. Ethane export infrastructure expansions on the Gulf coast and growing NGL pipeline and storage capacities have encouraged higher Permian recovery. This means that midstream firms that operate from "well-to-water" for NGLs in the Gulf coast region, such as Enterprise Products and Energy Transfer, already recover nearly all the ethane they produce, market participants say. Handling rejection The US Gulf coast accounted for about 67pc of ethane recovery in 2024, whereas the east coast, where smaller volumes are exported, accounted for 13pc. Gas processors in the Marcellus and Utica shales in northeast US lack the ability to recover more ethane because of limited takeaway capacity. Marcellus-focused upstream producer Antero Resources in March 2025 estimated that 45pc of potentially recoverable ethane in the east coast's Appalachian production region, or approximately 273,000 b/d, is rejected into the gas stream. In contrast, higher recovery from the Permian basin means ethane production growth in the region is set to more closely equate to that of natural gas. Overall, US NGL production is expected to continue outpacing natural gas growth this year. Enterprise forecasts NGL output to rise by 17pc between 2024 and 2030 compared with 14pc for all natural gas, although Permian production growth of both will be an equal 32pc. If the Permian continues to constitute an increasing share of US oil and gas output, growth in ethane production is likely to slow alongside natural gas. Ethane rejection, recovery: 2017 vs 2025 US ethane production Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Inland NWE LPG buyers to return to ARA spot market

26/01/06

Inland NWE LPG buyers to return to ARA spot market

LPG buyers may scale back term purchases this year, but increased spot trade carries higher risk, writes Waldemar Jaszczyk London, 6 January (Argus) — Northwest European downstream LPG buyers are set to return to spot trade this year after supply concerns driven by geopolitics and high natural gas prices led to heavy term buying in 2025. Polish importers are leading the way in scaling back term commitments after adapting to the EU's ban on Russian LPG. The embargo, which took effect in December 2024, halted most of the 1mn t/yr Russia exported to Poland, prompting buyers to source supply from western markets. Fears of shortages spurred Polish buyers to lock in substantial 2025 term contracts early at record-high premiums to the large cargo cif Amsterdam-Rotterdam-Antwerp (ARA) benchmark. But this backfired as Poland ended up well-supplied owing to weaker autogas consumption and tumbling re-exports to Ukraine, leaving importers with excess term product. Baltic ports covered the loss of Russian rail flows, with seaborne imports for non-petrochemical use jumping by 30pc on the year to a record 1.12mn t by mid-December, Kpler data show. At the same time, weaker demand weighed on imports, which slid by 14pc to 1.58mn t over January-September — a 10-year low. Polish distributors also faced competition from Latvia's Riga terminal, which started importing US LPG, undercutting other Baltic ports. Russian flows continued through a sanctions loophole, boosting imports of cheap normal butane and isobutane for Poland's 1.8mn t/yr autogas market. With profits plunging and buyers facing delivery backlogs, Polish resales to northwest Europe became common. The return to spot markets has spread, to a lesser extent, to buyers in Germany, the region's key heating consumer. The prospect of Polish demand waves set the tone for Europe last year, boosting term deals. But other than brief spikes from refinery disruption, the shift in flows failed to lift spot premiums meaningfully. Fourth-quarter railcar and barge differentials averaged over $100/t below 2024. Surging US exports allowed ARA terminals to absorb additional inland demand as transatlantic flows hit a record 1.7mn t. Many petrochemical producers also refocused storage to sell locally, increasing competition among sellers. For 2026, refinery supply is expected to stabilise, if not increase, as the threat of rising natural gas prices has receded. Resurgent Dutch TTF values last year threatened to curtail refinery flows as they did in 2021-23. But propane was largely shielded from refinery use, with railcar assessments — a proxy for inland product — at a discount to the TTF only during the summer. Propane-burning economics collapsed after the TTF fell to a 20-month low in early December, while LPG supply was ample given mild weather. Forward curves show natural gas at only a marginal premium to large cargoes in 2026, reducing the incentive for refinery LPG use. The propane market also weathered refinery closures in Europe, which removed 400,000 b/d of capacity in 2025. Further shutdowns are unlikely because tighter spare capacity supported refinery margins. Refinery supply in the region is forecast to hold at 16.35mn t in 2026 after a 5pc fall in 2025, according to Argus Consulting . It's cold outside The market enters this year with freezing temperatures across parts of Europe, yet heating consumption is likely to stay historically low. And ARA faces weaker French buying after imports to the 1.1mn t/yr Norgal terminal restarted in October . But a spot-heavy approach brings risk that could boost premiums for buyers. ARA terminal suppliers are likely to follow downstream clients by limiting term imports, while spot US product could tighten as competition from China increases. The threat of closures has eased, but Europe's ageing refineries remain prone to outages. And the EU ban on Russian pure butane fractions under the bloc's 19th sanctions package, effective from 26 January, will remove more than 32,000 t/month of supply, which will have to be replaced partly by propane for autogas use. Poland sea LPG imports by terminal* ARA propane railcar large cargo differential ARA, daf Brest forecast 2026 Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Viewpoint: European HVO prices unlikely to ease in 2026

25/12/16

Viewpoint: European HVO prices unlikely to ease in 2026

London, 16 December (Argus) — Northwest European hydrotreated vegetable oil (HVO) premiums have firmed on the year in 2025, setting the stage for continued strength as the market braces for higher blending targets in 2026. Premiums strengthen ahead of 2026 targets The Argus HVO Class II fob ARA premium to gasoil averaged $1,075/m³ during January-November, compared with $683/m³ in 2024. The premium firmed to $1,650/m³ on 21 October — a more than three-year high — driven by stronger demand from obligated parties rushing to meet RED targets before the end of the year. Increased consumption against relatively stable production has tightened supplies, and planned maintenance closures at European and Chinese facilities during the fourth quarter may continue to support values into early 2026. Germany's planned legislative changes in 2026 abolishing double-counting of Annex IX feedstocks could significantly boost HVO demand, as higher absolute volumes of biofuel will be needed to meet GHG reduction quotas, which then supports demand for drop-in fuels like HVO. The Netherlands is also planning an end to double counting and a switch to a greenhouse gas savings-based mandate, which could amplify demand in 2026. Trading activity reflects the bullish demand outlook — 888,000t of Class II futures traded on Ice in October, surpassing the previous record of 717,500t in June. Open interest now extends to December 2026, signalling confidence in sustained liquidity. Spot market activity has also picked up in 2025, with Argus Open Markets (AOM) volumes traded for HVO Class II reaching 122,000t in January to November 2025, surpassing the 2024 total of 44,000t. Producers tilt towards HVO over SAF EU sustainable aviation fuel (SAF) targets kicked in at 2pc this year and with this, producers are recalibrating output strategies. Definitive EU anti-dumping duties on Chinese biodiesel and HVO were imposed in February , and EU anti-dumping and anti-subsidy measures already apply to HVO and biodiesel originating from the US and Canada. The China duties do not apply to SAF, but US duties do. HVO and SAF are made from oils and fats via hydrotreatment, but HVO requires fewer processing steps, usually making it the cheaper grade. But HVO Class II has often maintained a premium over SAF throughout 2025 because of different market fundamentals. This encouraged European producers to maximise HVO output over SAF. But tight SAF supply towards year-end — driven by export restrictions from China — pushed SAF premiums above Class II, with the SAF premium over HVO averaging $292/t in November. In October, some additional Chinese producers secured SAF export licences, and with the SAF mandate remaining at 2pc in 2026, European producers are expected to favour HVO production while SAF imports from duty-free China and Singapore fill the gap. The UK Trade Remedies Authority said in late November that it plans to recommend that the government places countervailing duties on US-origin HVO from March. Imports of US HVO into the UK have already declined this year because of the ongoing investigation, and participants expect volumes to fall further. To meet mandates, the UK is expected to lean more heavily on used cooking oil-based biodiesel, while some blenders may also look to secure supply from Nordic producers. By-products soften The Argus bionaphtha fob ARA price averaged $1,541/t in January-November, compared with $1,675/t across 2024. Despite the decline, premiums have recently been supported by stronger HVO and SAF prices, with used cooking oil-based bionaphtha a viable drop-in blending alternative to meet mandates. Looking ahead, participants expect that firm HVO prices will sustain higher bionaphtha premiums in 2026, while voluntary demand, particularly from petrochemical manufacturing, could provide additional support to the market. The biopropane premium to its propane counterpart at the ARA hub fell during 2025, with third quarter levels hitting record lows since Argus began the assessment in October 2023. Argus biopropane fca ARA outright averaged around $1,408/t in January–November, down from $1,597/t in 2024. Although HVO and SAF output have boosted biopropane supply, demand remains constrained without mandated use. Looking ahead, premiums are expected to stay capped unless government incentives accelerate adoption . By Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU to dilute Ice vehicle phase out: German lawmaker

25/12/15

EU to dilute Ice vehicle phase out: German lawmaker

Brussels, 15 December (Argus) — The European Commission is likely this week to dilute its plan to phase out sales of new internal combustion engine (Ice) vehicles by 2035, according to a lawmaker. "The ban on internal combustion engines is history," said Manfred Weber, the chair of parliament's largest centre-right group EPP. He said the commission will present on 16 December an automotive package that "will revise the CO2 standards for cars, reversing the disastrous ban on internal combustion engines". Weber is a member of Germany's CDU/CSU party, as is commission president Ursula von der Leyen. German chancellor Friedrich Merz has called on the EU to allow the sale of vehicles with highly efficient combustion engines, plug-in hybrids and range-extender EVs beyond 2035. This had faced pushback, with more than 150 European e-mobility firms requesting the commission "stand firm" on its 2035 target. An EU official said the target is now likely to be for a 90pc GHG reduction from 2035 for new vehicles. "As it stands the targets for 2030, but also 2035, are not realistic," said Sigrid de Vries, director general of the European Automobile Manufacturers' Association (ACEA). "Even with a 90pc target [for reducing GHG by 2035], make no mistake, that will be very, very challenging." The European motor industry has already flagged the possibility of huge fines for manufacturers should they fail to meet existing emissions targets, which are for a 15pc reduction by 2029 compared with a 2021 baseline, and a 55pc reduction from the same baseline in 2030-34. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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