Warren R. True
Chief Technology Editor
HOUSTON, Aug. 25 -- China's 2007 LPG output maintained its steady increase since 2002, while LPG imports continued their 5-year slide, according to a recently released study by FACTS Global Energy (FGE), Honolulu. Urban and rural residential use dominated Chinese demand with little impetus for LPG growth in the chemical market.
The fuel's use in fleet vehicles, however, may grow as Chinese cities try to improve their air quality, FGE disclosed.
The country produced nearly 615,000 b/d of LPG, up from 2006 by 10.8%, says FGE. Imports were slightly less than 129,000 b/d, off from 2006 by 24.3%. The country exported to other Asian countries some 10,700 b/d.
Total LPG demand in China last year reached more than 732,000 b/d, up 1.8% over 2006. For context, Asian LPG demand in 2007 was the largest of any region in the world, at about 1.97 million b/d (68 million tonnes).
LPG demand for the regionthe Indian subcontinent, Southeast Asia, and Northeast Asiasurpassed that for North America at 60 million tonnes (OGJ, June 23, 2008, p. 58). China's demand last year comprised about 38.5% of Asian demand.
FGE noted that Chinese imports of LPG, whose use is dominated by urban residential demand (54%), have declined steadily since 2002, when the country imported 199,000 b/d. Production since 2002, on the other hand, has increased from 567,000 b/d that year.
After urban residential use, industrial use makes up 25% of demand, followed by rural use, 11%. There is a small component of autofuel demand. FGE says this element will likely increase, exemplified by Shanghai's new program for LPG use in taxis.
LPG is not currently in demand as feedstock in chemical production, says the report; less than 0.5% goes for ethylene production where naphtha typically dominates.
Regionally, South China and East China surpass other regions in LPG demand.
China's use of natural gas will grown from increased domestic production in the west, new pipeline supplies from Central Asia, and a growing LNG terminal population.
Currently there is one operating terminal in Guangdong, one is being commissioned in Fujian, and at least three more are under constructionat Shanghai, Jiangsu, and Dalian. And as many as five or six terminals are approved or proposed and likely. Much depends on supply-contract negotiations and whether the terminals' owners want to pay the high prices LNG has been fetching in Asia.
China's overall LPG use, therefore, will grow only slowly. Imports, said FGE, will continue to decline.
Nevertheless, several countries in 2007 exported LPG to China, dominated by Australia at 22.3%. The total of exports from Middle East countries (Iran, Saudi Arabia, Kuwait, UAE, Qatar, Bahrain, and Oman) made up more than 68% of import volumes.
Guangdong Province in the south dominated imports, garnering nearly 72%. Jiangsu (Shanghai) was second with 8.5% of imports.