SPECIAL REPORT: Global LPG markets react to high oil prices

June 23, 2008
High global oil prices, regional supply disruptions, project delays, regional demand increases, and slowing economies in many regions have all affected global LPG markets and trade.

High global oil prices, regional supply disruptions, project delays, regional demand increases, and slowing economies in many regions have all affected global LPG markets and trade.

LPG production has been rising in nearly every region of the world. In 2007, global supply was about 229 million tonnes (7.3 million b/d), up 2.4% from 2006. This increase compares to an average supply growth of about 2.0%/year 2000-06. LPG production and exports have ramped up, associated with higher crude oil and LNG production rates. Because the LPG is a byproduct of oil and gas production, LPG production is unlikely to be reduced despite a surge in supply and a probable reduction in LPG prices relative to crude.

Meanwhile, LPG demand has also increased around the globe. About half of total LPG demand comes from the residential-commercial market for heating and cooking. Within limits, base demand that consists of residential-commercial demand and a significant fraction of other LPG demand is relatively insensitive to price. Consequently, any LPG supply that exceeds this base demand will need to be consumed by the more elastic demand coming mainly from petrochemical plants—or possibly stored for later consumption when the market adjusts.

The global LPG supply surplus is building even while crude oil and petroleum product prices are strong. As a result, LPG price relationships have been affected. Global LPG markets are experiencing high absolute LPG price levels, which are supported by high crude oil and natural gas prices, but recent LPG prices have also been relatively weak compared to crude.

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Markets for LPG substitutes such as ethane, light naphtha, and certain fuels are also affected by changes in LPG supply and pricing. For example, in Japan, Fuel Oil A has traditionally been a more economical industrial fuel than LPG. In recent years, however, LPG has been the more economical industrial fuel except during peak seasonal LPG demand.

Global supply

Global supplies of LPG rose to about 229 million tonnes in 2007 from 199 million tonnes in 2000. Thus, supplies increased by about 2.0%/year. Purvin & Gertz expects supplies will reach about 258 million tonnes by 2010 (Fig. 2).

Changes in sources

Natural gas processing continues to be the largest supply source of LPG supply, accounting for nearly 60% of total worldwide production during the last 10 years. Refineries accounted for nearly all of the remaining production. Other sources account for less than 0.5% of worldwide LPG production.

A fundamental change in the market will occur during the next few years as LPG is recovered from LNG. Most propane and butane available in the raw gas streams for LNG production will be separated from the LNG upon liquefaction. The growth in LNG facilities around the world will increase LPG production accordingly.

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Smaller amounts of LPG and significant amounts of ethane, however, will be left in the LNG stream when there is no local demand. Some markets can utilize sources of LNG that contain higher levels of ethane and LPG. With many projects, extraction of the LPG components will be necessary before liquefaction of the gas stream.

On the regasification end, the ethane present in some LNG will prevent the gas from meeting natural gas pipelines’ specifications. In these cases, the LNG will need to be diluted or have the ethane extracted prior to sendout into the natural gas grid.

Regional supply comparisons

Regional LPG production has shown some notable shifts during the last decade.

In 1990, LPG produced in regions east of the Suez Canal (“East of Suez”) totaled slightly less than 30% of the world total. By 2000, the East of Suez’s share of total production had risen to about 35%, and Purvin & Gertz estimates that more than 40% of the world’s LPG supplies will come from East of Suez by 2010.

On a percentage basis, production increases have been particularly high in the CIS region, where supply nearly doubled to about 13.4 million tonnes in 2007 from 6.8 million tonnes in 2000. Other regions that grew quickly in the same period include the Indian subcontinent, the Far East, and Oceania, each of which saw growth greater than 4%/year so far this decade.

Since 2000, total global LPG production has increased by nearly 30 million tonnes. On an absolute production basis, the largest supply increase came from the Middle East, which increased by 8.8 million tonnes to about 43.3 million tonnes in 2007 from a relatively large base of 34.5 million tonnes in 2000. Thus, the Middle East accounted for about 30% of the world increase in LPG production so far in this decade.

Other regions with large absolute increases included the CIS region, with an increase of about 6.6 million tonnes, and the Far East at 6.3 million tonnes. Although the Indian subcontinent and Oceania had large increases on a percentage basis, their contributions on an absolute basis were smaller because they started from a smaller production base in 2000.

Middle East

The Middle East region has experienced the highest growth in LPG production since 2000 despite consecutive production decreases in the region in 2001 and 2002. Iraq had a dramatic LPG production decrease in 2003 due to the war, but the overall impact on the region was relatively small since Iraq’s production was less than 5% of the total Middle East region.

The Middle East has historically provided much of the LPG that is consumed in Asia, and we expect that this trade pattern will continue for the foreseeable future.

Increased crude oil production in the Middle East during the last few years has caused an increase in associated-gas production in the region. The corresponding increase in LPG production has freed up some supplies for export. The largest increase in production, however, came from gas processing in the Middle East. Refineries produce only 12% of the region’s total LPG supplies.

Saudi Arabia remains the largest LPG producer with nearly half of the Middle East’s production. Saudi Arabia’s production decreased, however, by about 0.5 million tonnes in 2007. The UAE also had a significant decrease at 0.7 million tonnes. Production increased by 1.0 million tonnes in Qatar, and by 1.1 million tonnes in Iran.

Over the next few years, we expect that LPG production will increase in each of these four countries as they continue to develop existing and new gas reserves. The continued growth in worldwide demand for LNG will also drive expansion of gas processing in the Middle East. By 2010, LPG production in the region will likely reach more than 59 million tonnes.

North America

North America remained the largest regional producer of LPG in 2007. North America’s annual LPG production declined, however, by 4.3 million tonnes 2000-07 despite consecutive production increases in 2006 and 2007. We expect the Middle East to surpass North America’s LPG production by 2010.

A large amount of production in the prolific Gulf of Mexico region was knocked off line for several months during 2005 by two major hurricanes, but that does not account for the overall decline since 2000. Production in North America had peaked in 2000 at more than 59 million tonnes but then declined to less than 55 million tonnes by 2003. Since 2003, production has increased except for 2005.

Purvin & Gertz expects that LPG production in North America will grow to about 56 million tonnes by the end of the decade. Gas processing provides slightly more than 60% of the LPG production in the region.

Far East

The 6.3-million-tonne increase in Far East production of LPG 2000-07 was dominated by increased production from refineries in China. Production in Korea and Taiwan also increased, but these increases were dwarfed by the increases in China. Japan’s production decreased by 6.4 million tonnes during the period. All of the production in the region comes from refineries, as there is no appreciable gas processing.

In the future, Purvin & Gertz expects that refinery production of LPG will continue to increase significantly in China, where new refineries and refinery expansions are planned to accommodate the growing Chinese economy and growing demand for transportation fuels.

Africa

In Africa, LPG production rose to 17.8 million tonnes in 2007 from 14.5 million tonnes in 2000, resulting in growth of 2.9%/year. The net increase in production 2000-07 was driven by increases in Nigeria and Angola, which had a combined increase of 1.8 million tonnes/year. Algeria, Egypt, and Libya each had increases of 0.3 to 0.4 million tonnes/year.

Purvin & Gertz expects that LPG production will continue to expand in Africa. We expect particularly large absolute production increases from Nigeria and Algeria by the end of the decade, with significant contributions from Egypt, Libya, and Equatorial Guinea as well.

On Africa’s west coast, Nigeria’s LPG production has increased by about 1 million tonnes since 2000 due to an increase in crude oil production and a large increase in gas processing capacity. In the past, Nigeria flared a large portion of its natural gas production, along with the entrained LPG. This practice has been decreasing, and the gas is now being processed to recover the LPG.

Additions to natural gas liquefaction capacity have also increased the overall recovery of LPG from the produced gas in Nigeria. We expect that LPG production in Nigeria to increase to about 3.8 million tonnes by 2010. Civil unrest in the country continues to impede increased production. Other countries in West Africa that produce and export LPG include Angola, the Congo, and Equatorial Guinea.

On the north coast of Africa, Algeria, Egypt, and Libya are significant LPG producers. Algeria is still the world’s second largest LPG exporter after Saudi Arabia. Algeria produced more than half of the total for Africa in 2007. Egypt produced 11% of African supply in 2007 but remains a net importer of LPG due to high domestic demand. Libya is also a large producer of LPG; its production should reach about 1.4 million tonnes by 2010.

Latin America

LPG production in the Caribbean and Latin America was about 25 million tonnes in 2007. This production was far less than in the Middle East and North America but comparable to production in the Far East and in Western Europe.

Within the region, Mexico is the largest producer of LPG, followed by Brazil, Venezuela, and Argentina. Together, these four countries accounted for more than 80% of the 2007 LPG production in the region. Gas processing in the region accounts for more than 60% of LPG production; this percentage will grow in the future.

Several countries in Latin America have plans for new and expanded gas liquefaction that will add to the regional LPG supply. Purvin & Gertz expects total LPG production in the region will rise to about 28 million tonnes by 2010. Brazil had the largest supply growth since 2000, at about 1.3 million tonnes/year. At 0.8 million tonnes/year, Venezuela is likely to have the largest supply growth through 2010 as several new projects are brought online. Peru, which began production from the Camisea field in 2004, should grow by almost 0.7 million tonnes and register the largest percentage increase in the region.

Indian subcontinent

On the Indian subcontinent, production rose to 9.0 million tonnes in 2007 from only 6.3 million tonnes in 2000. India dominates the region’s LPG supply, with around 95% of production. Much of the growth has been due to additional crude oil refining capacity added in the late 1990s.

More than two-thirds of the regional LPG production comes from refineries, which is a wide departure from the world average. By 2010, we expect that regional production will increase to about 9.7 million tonnes, reflecting increased production from the new Jamnagar refinery.

Southeast Asia; Oceania

In Southeast Asia, gas processing produces about 56% of LPG, and the balance comes from refineries. The largest sources of supply in the region are Thailand, Malaysia, and Indonesia, with Thailand being the largest producer at around 37% of regional production.

Indonesia’s LPG production has generally declined since 2001, due mainly to declining LNG gas production. Civil unrest in the area shut down the Arun LNG plant, and gas volumes at Bontang continue to decline. Additional natural gas production projects are under way, which should turn the trend.

Purvin & Gertz expects that regional LPG production in Southeast Asia will increase by about 2.4 million tonnes 2007-10. The largest volume increases should come from Indonesia and Thailand.

In Oceania, LPG production increased to 4.5 million tonnes in 2007 from 3.4 million tonnes in 2000. Oceania experienced growth of about 4.1%/year during this period, but the absolute volumes are small in comparison with overall worldwide supply. We look for regional production to continue to expand gradually.

Europe; the CIS

Northern Europe is a large but mature producing region. LPG supplies have grown by about 0.7%/year since 2000, but supplies peaked in 2003 at 18.8 million tonnes and have declined each year since. In 2007, production dropped by 0.5 million tonnes due to operating problems; therefore we forecast a rebound in 2008.

Production from the North Sea represents a large portion of regional production, but refineries in the region provide nearly half of the region’s total LPG supplies. We expect that regional supplies will be flat to slightly reduced through the end of the decade. Increased refinery supplies of LPG should help offset declining North Sea supplies.

In contrast, the neighboring CIS region is experiencing a strong increase in supply. In 2007, the CIS countries produced 13.4 million tonnes of LPG, which represents nearly a 10% /year increase since 2000. This growth occurred mainly because of additional gas processing in several countries.

LPG demand growth

Total global demand for LPG was nearly 229 million tonnes in 2007. Purvin & Gertz estimates that the market will grow to about 258 million tonnes by 2010. Thus, demand will likely grow by about 31% compared with demand of 198 million tonnes in 2000 (Fig. 1).

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Although total global growth for LPG since 2000 averaged 2.1%/year, growth rates in individual geographic regions have varied widely. The highest growth in base demand (i.e., outside the price-sensitive petrochemical industry) has occurred in developing regions of the world, driven by residential-commercial consumption (Fig. 3). In the more mature economies of Western Europe and North America, LPG base demand increased much more slowly than the global average.

LPG demand growth in 2007 continued to be high in the Middle East, Africa, Southeast Asia, and especially the Indian subcontinent. Much of this demand growth resulted from rising consumption by the residential-commercial sector. Demand growth in the Middle East primarily, however, resulted from the region’s expansion of its petrochemical sector.

Asia, Oceania

The total Asian market—the Far East, Southeast Asia, and Indian subcontinent—overtook North America in 2001 as the largest LPG consuming market in the world. LPG demand in Asia totaled about 68 million tonnes in 2007. For comparison, the North American market was about 60 million tonnes in 2007.

LPG demand in Asia has increased by an average of about 3.2%/year since 2000. Nearly 70% of total demand in the region is for use in the residential-commercial sector. It is interesting to note that South Korea is the world’s largest consumer of LPG for automobile fuel; however, at a 2007 consumption of about 4.3 million tonnes of LPG, this application still represents a relatively small contribution to the total Asian market demand.

Almost all demand growth for LPG in Asia is in the residential-commercial sector. This region includes more than 3.5 billion people, or almost 56% of the world’s total population. We expect economic growth in this region to continue and result in additional consumption of LPG, although more slowly than during the last 10 years. Per-capita consumption of LPG in this region will likely increase sharply in the future.

Within the region, Japan and China are the largest consumers of LPG. China’s total demand surpassed that of Japan in 2004, but Japanese demand was higher again in 2007. Chinese demand was reduced by high prices relative to alternatives for cooking and heating, while Japanese demand increased due to LPG’s preference as a petrochemical feedstock.

In 2007, demand in China totaled about 18.4 million tonnes, while Japan’s total was 18.8 million tonnes. Growth in Chinese demand for LPG was very strong at about 20%/year throughout the 1990s but has slowed to 4.5%/year since 2000, with 2007 growth of only about 0.4%.

In future, Purvin & Gertz expects Chinese demand to continue to grow but not at rates seen in the 1990s. In contrast, Japanese demand growth was 0.4%/year during the 1990s and has been flat on average since 2000. Japan’s market is mature and only modest demand growth is expected.

The LPG market in Southeast Asia is much smaller than the Far East, but it is generally growing faster. The Far East market was about 6.2 times the size of the Southeast Asian market in 2000, but the ratio has since narrowed to about 5.2. Some of the Southeast Asian markets have exhibited strong growth rates and are becoming more important regional players in the LPG trade.

The region has experienced total LPG demand growth near 5%/year since 2000. Total LPG demand in the region grew to about 9.0 million tonnes in 2007 from 6.6 million tonnes in 2000.

Almost 60% of the 2007 demand in the Southeast Asia region was concentrated in Malaysia and Thailand, both of which have mature LPG markets with high penetration in the residential-commercial markets. Indonesia and the Philippines combined for 2.3 million tonnes of LPG demand in 2007.

Most countries in Southeast Asia, with the notable exceptions of Singapore and the Philippines, have experienced reasonably high growth rates during the last 10 years. More than 70% of the regional consumption is in the residential-commercial sector. Purvin & Gertz expects that growth in this sector will continue through the rest of the decade at more than 5%/year. With growth of more than 20%/year of growth over 3 years expected, Indonesia, Thailand, and Vietnam will likely exhibit the highest growth rate of any country in the region through 2010.

The LPG markets in the Indian subcontinent continue to exhibit strong potential growth. In 2007, total demand rose to about 12.1 million tonnes from only 7.2 million tonnes in 2000. This increase represents growth of nearly 8%/year. Almost all of this demand is concentrated in India, which accounts for more than 90% of the total LPG consumption on the subcontinent.

Compared with Asia, LPG demand in Oceania is very low at only 2.2 million tonnes in 2007. Australia dominates the regional market with total consumption of 2.0 million tonnes. One unique aspect of the Australian market is the very high use of LPG as auto fuel, an end-use sector that accounts for about 63% of the total use in the country.

Middle East

In the Middle East, LPG demand represents a notable exception to most regions that consume large amounts of LPG in the residential-commercial sectors. Conversely, demand in the Middle East has increasingly been heavily influenced by the petrochemical sector’s use of LPG as a feedstock. Before 1994, the chemicals sector consumed less than 10% of total LPG demand in the region. In 2007 chemicals comprised more than 45% of total demand, and by 2010 we expect that figure to rise to about 60% of total LPG demand as new projects come on stream.

Saudi Arabia has been a major contributor to the use of the LPG for chemicals production and currently accounts for about 43% of total LPG consumption in the Middle East. In 2007, regional demand for LPG totaled about 17.0 million tonnes, and Saudi Arabia accounted for about 7.3 million tonnes. Petrochemical feedstock demand currently accounts for almost 80% of the total demand in Saudi Arabia.

We expect that demand for LPG in Saudi Arabia will likely jump sharply in 2008 through 2010, as the next series of chemical manufacturing facilities come into production. Demand growth in the residential-commercial sector should remain relatively steady, with moderate growth during the next few years.

Iran is the next largest consumer of LPG in the Middle East, accounting for more than 22% of regional demand. Demand growth in Iran has averaged nearly 8%/year since 2000. Petrochemical use of LPG in the country will increase dramatically after 2010, pushed by expanded production from the South Pars field.

Europe

LPG demand has increased rapidly in some countries of Eastern Europe. Due to the collapse of the former Soviet Union, many of the newly formed republics experienced severe economic downturns during 1990-95. Since 1995, many of these countries have enjoyed strong economic growth, and LPG demand has increased accordingly.

From 1995 to 2005, demand in many of the countries of Eastern Europe increased at more than 7%/year. Although this demand growth is strong in percentage terms, the absolute increases in LPG volumes were less impressive, mainly because these countries were starting from low consumption bases.

In Northern Europe, there is no single, dominant LPG-consuming country. The UK and Ireland comprise the largest consumer of LPG and currently account for 3.8 million tonnes of the regional consumption, which totaled about 17.0 million tonnes in 2007. Scandinavia consumed about 3.1 million tonnes of LPG in 2007, and Germany used about 2.8 million tonnes. Poland consumed 2.7 million tonnes of LPG, and the Netherlands used 2.2 million tonnes.

Total base demand in Northern Europe has grown only slowly to 13.2 million tonnes in 2007 from 12.0 million tonnes in 2000. Price-sensitive consumption for ethylene production, however, has increased to 3.8 million tonnes in 2007 from 2.0 million tonnes in 2000. Purvin & Gertz expects price-sensitive demand to grow rapidly for the next few years to about 5.6 million tonnes in 2010 as global production of LPG rises faster than base demand.

Within Northern Europe, auto-fuel use in Poland has exhibited extremely strong growth during the past 10 years and accounted for the bulk of the growth in the country’s LPG market. As in many other countries where autogas represents a significant component of LPG demand, Poland’s 2007 autogas consumption of about 1.9 million tonnes/year is driven by the fuel tax structure. In the absence of increased incentives, autogas growth in Poland will slow.

In southern or Mediterranean Europe, growth patterns for LPG have been quite different than in the north. The countries that make up this region include Spain, Italy, France, Turkey, Bulgaria, Romania, and the Balkan states. Most of these markets are very mature, and the petrochemical sector does not make up a large component of demand. Consequently, the region is not likely to show strong growth.

Demand in Southern Europe peaked at 17.2 million tonnes in 2000 and declined to 15.3 million tonnes in 2003. Demand rebounded to about 16.2 million tonnes in 2007 but will not surpass the 2000 levels by the end of the decade.

The CIS region (Commonwealth of Independent States) includes Russia and all the republics of the former Soviet Union, except the Baltic States. Between 1990 and 1998, demand in the region steadily declined due to weak economic conditions. In recent years, however, growth has returned to these markets. LPG demand in the CIS has grown at average rates exceeding 7%/year since 2000.

In 2007, demand in the CIS totaled about 9.9 million tonnes. Russia accounts for the largest portion of the regional demand, consuming more than 80% of the LPG. Within Russia, the residential-commercial sector uses slightly less than one-half of the total, and petrochemical consumption of LPG accounts for almost 40%. We expect LPG demand in the CIS to rise to about 10.6 million tonnes in 2010.

Africa

In Africa, LPG markets have grown rapidly. Demand in the entire region has grown at 5.7%/year since 2000. In 2007, total LPG demand rose to 10.3 million tonnes. Almost all the consumption in Africa is in the residential-commercial sector.

Egypt is the largest consuming country, accounting for about one-third of regional consumption. Algeria and Morocco are also large regional consumers of LPG. We look for regional demand to increase to 11.8 million tonnes by 2010.

Latin America

Latin America is a large market for LPG. Within the region, about 80% of LPG feeds residential-commercial demand. Mexico and Brazil account for almost 60% of LPG consumption. LPG demand in Latin America declined starting in 2000 to a low of about 25.7 million tonnes in 2003.

Much of the contraction in demand occurred in Brazil and Mexico due to a combination of economic factors and penetration into the market by natural gas. Latin American demand has since rebounded to about 28.3 million tonnes in 2007. Purvin & Gertz expects that demand will grow to nearly 30 million tonnes by 2010.

Mexico continues to have the highest per-capita use of LPG in the residential market of any country in the world. Four out of five households in the country use LPG as cooking fuel. Mexico consumed about 9.7 million tonnes of LPG in 2007—almost 45% more than in Brazil.

North America

The North American market (excluding Mexico, counted with Latin America) is one of the largest in the world and is mature. North American base demand for LPG grew at less than the world average in 2007. The US petrochemical industry, however, relies heavily on LPG as a primary feedstock, and petrochemicals’ LPG demand was robust in 2007. Total North America LPG demand—including price-sensitive demand—grew at about 1.6%.

One unique aspect of the North American market is its ability to accommodate a large amount of price-sensitive demand. The US Gulf Coast has a large amount of underground storage, ample marine terminal facilities, and a large petrochemical industry that has unparalleled feedstock flexibility.

These attributes allow the US Gulf Coast to consume large amounts of LPG when the price is right. Consequently, when global supply of LPG exceeds base demand, the US Gulf Coast is often the superior outlet for the excess supply because the LPG can be cracked as feedstock or stored until prices improve.

Base demand in North America has grown at only 0.3%/year since 2000. Even with the price-sensitive demand included, the growth rate was only 0.5%/year. This small growth rate, however, masks the absolute demand increase due to the large size of the market.

Total LPG consumption in the North American market increased by 2.0 million tonnes 2000-07. For comparison, this increase by itself is nearly the same size as the total LPG consumption in Oceania in 2007.

Because North America is a mature market, Purvin & Gertz does not expect base demand to grow appreciably in the region. Base demand growth should average only about 1.1%/year through 2010. Demand by the price-sensitive market, however, should expand rapidly 2008-09. After the peak of the surplus, price-sensitive demand will decline, but should remain relatively high for several years as the petrochemical industry takes advantage of low-cost global supplies.

We look for total LPG demand in North America, including price-sensitive demand, to reach nearly 65 million tonnes by 2010.

Global LPG trade

With increased global LPG production and demand, one might have expected increased waterborne trade in 2007. Large-cargo waterborne trade volume actually dropped, however, to about 51.5 million tonnes in 2007 from 53.0 million tonnes in 2006. Among the many contributors to this decline, many are likely to be temporary.

On the source side, South American exports dropped by nearly 1 million tonnes. This drop was due mostly to an abnormally harsh winter that caused Argentina and others to retain their LPG rather than sell it on the global market.

The Middle East, Australia, and the North Sea each dropped LPG exports by more than 0.4 million tonnes. OPEC cuts, delayed projects, and increased domestic demand contributed to the Middle East’s drop. North Sea exports were hampered by declining production and significant maintenance work on terminals.

The largest increase in exports was about 0.6 million tonnes from Africa, particularly from Algeria and Nigeria.

On the destination side, import demand for propane continued to be soft in China as consumers balked at the high international prices and domestic refineries were able to meet internal demand. Waterborne imports into China dropped by 0.8 million tonnes in 2007.

Premium demand increased in South America to cope with the cold winter. The drop in exports coupled with the South American winter took a cut out of price-sensitive demand. Because LPG was frequently favored over naphtha, LPG still flowed to crackers in Asia and the Mediterranean. The traditional “market of last resort,” however, the US Gulf Coast, found itself without significant incoming supplies of off-season LPG. Imports to the US Gulf Coast dropped by 1.9 million tonnes in 2007.

The authors

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Walter M. Hart ([email protected]) is a principal in the Houston office of Purvin & Gertz Inc., joining in 2006. He worked 2 years at Owens Corning Fiberglas and 14 years at Union Carbide Corp. and Dow Chemical Co. He earned a BS in chemical engineering (1986) from Notre Dame, a PhD in chemical engineering from West Virginia University, and an MBA from the University of Charleston. Hart is a registered professional engineer and a member of GPA and AIChE.

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Ronald L. Gist ([email protected]) is a senior principal in the Houston office of Purvin & Gertz Inc., having joined the company in 1996. He began his career with E.I. DuPont de Nemours & Co. in 1971 after receiving both BS and MS degrees in chemical engineering from Colorado School of Mines. Gist chaired GPA’s market information committee and is currently a director of the Houston chapter of GPA.

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Ken W. Otto ([email protected]) is a senior vice-president and director in the Houston office of Purvin & Gertz Inc. He joined E.I. DuPont de Nemours & Co. in 1977, then moved to Champlin Petroleum Co. in 1979 and served 4 years at Corpus Christi Petroleum Co. Otto joined Purvin & Gertz in 1986, was elected principal of the company in 1987, senior principal in 1990, and vice-president in 1997. He holds a BS (1977) in chemical engineering from the University of Texas at Austin.

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Darryl W. Rogers ([email protected]) is a senior consultant in the Houston office of Purvin & Gertz Inc., having joined the firm this year as a senior natural gas consultant. He began his career with Dow Chemical Co. in 1991 after receiving BS degrees in business administration and chemical engineering from Western Carolina University and North Carolina State University, respectively. Rogers also holds an MBA (1997) with a concentration in finance from Louisiana State University.