Liquefied petroleum gas, also called LPG, GPL, LP Gas, liquid petroleum gas or simply propane or butane, is a flammable mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles. It is increasingly used as an aerosol propellant and a refrigerant, replacing chlorofluorocarbons in an effort to reduce damage to the ozone layer. When specifically used as a vehicle fuel it is often referred to as auto-gas.
In 2012, global LPG production grew by just over 3pc to reach 274mn t. The key rises came from the Middle East and the US, with more set to come over the next three years from West Africa, Australia and Russia, as well as from Chinese refinery expansions. Global LPG consumption grew by less than 2pc in 2012, to 264mn t.
Growth showed the unmistakable impact of US shale gas development, as US output rose by 8pc. The three major Middle Eastern producers — the United Arab Emirates, Qatar and Saudi Arabia — all saw production growth as the whole region reached nearly 67mn t/yr.
In 2012, the United States became a net exporter of liquefied petroleum gases (LPG) for the first time. LPG includes the natural gas liquids (NGL) components ethane, propane, butanes, and marketed refinery olefins. In its Annual Energy Outlook 2013 (AEO2013), EIA projects that the United States will continue to be a net exporter of LPG through 2040, mainly because of continued increases in natural gas and oil production.
Net exports of LPG are projected to grow by more than a half-million barrels per day from 2011 to 2017 in the AEO2013 Reference case. In that scenario, LPG exports decline after 2017 as wet gas (containing liquids) production declines, resulting in lower NGL production from natural gas processors. Variations in NGL supply affect LPG exports.
The Statistical Review of Global LP Gas shows that production has consistently outpaced consumption. Since 2007, the gap between production and consumption has been rising and reached 9.7mn t in 2012 as consumption rose by less than 2pc whereas production rose by over 3pc. The expected gradual knock-on effect from the imbalance has not materialized, as additional supply from shale gas in the US pushes production from the region closer to matching the increasing Middle Eastern supply.