lpg world - argus media · 7 august 2012 — 2012 ±%

T W I C E M O N T H L Y NEWS, PRICES AND ANALYSIS VOLUME XVIII, ISSUE 15, 7 AUGUST 2012

LPG World

© Argus Media Ltd www.argusmedia.com

Editorial: Shifting fundamentals 2

News/inventories

Olympic games boost UK firm 3

Dow plans capex cut 3

Japanese imports fall 4

Williams ‘concerned’ over ethane glut 4

Chinese imports continues rise 5

US hubs set for arbitrage shift 6

Enterprise Products Partners ups profits 6

Features

UK firm shows zeal for dual fuels 7

Japanese buyers return in force 7

Kazakhstan output dips 8

Pakistan proceeds with autogas expansion 9

LPG offers microbusiness opportunity 10

Data

Shipping 11

Market review — Europe 12

Market review — Asia 13

Market review — Americas 14

Prices 16

Inside

Jan Apr Jul Oct500

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US NGL firm Markwest has started sales of propane from the Marcellus shale, using a northeast terminal. The deal is another milestone in the growth of US NGL exports

US natural gas liquids (NGL) firm Markwest Energy Partners has begun to sell propane from the Marcellus shale to international customers as its giant Mariner East project starts to bear fruit.

Markwest will sell the propane from Sunoco Logistics’ Marcus Hook terminal in Philadelphia, Pennsylvania (LPGW, 24 July, p4). Markwest has yet to disclose the identity of the buyer other than saying it is a “large multinational LPG company”.

“The delivery of propane from the northeast US to global markets is crucial to ensure northeast propane markets remain in balance and that northeast propane continues to achieve premium pricing,” the Denver-based company said on 2 August. “This milestone is part of the partnership’s continuing commitment to provide multiple marketing options that will maximise the value of its producer customers’ NGLs.”

Export optionsMarkwest did not disclose the size of the shipments or the destination. The company — unlike other US firms look-ing to export NGLs from US shale gas extraction — does not export from Houston, but from the northeast. This gives Markwest the option to export across the Atlantic and down to the US Gulf coast and beyond.

Midstream companies on the Gulf coast are expanding LPG export capac-ity in that region to accommodate greater propane production. But this is

the first time a US NGL company has confirmed exports of propane from the giant Marcellus shale, which is in the US northeast (LPGW, 10 July, p1).

“We are not going to be talking about the specific customers,” chief executive Frank Semple says. “We are continuing to evaluate opportunities for international sales of propane.”

In July, rival US NGL giant Enterprise Products Partners tied up a deal with Japanese LPG importer Eneos Globe to sell around 200,000 t/yr of propane from its terminal on the Houston Ship Channel, to take advantage of the newly expanded Panama Canal when work is completed in 2014. Enterprise forecasts US exports to surge to 65mn bl/yr next year.

Meanwhile, Markwest’s second-quar-ter profits more than doubled to $187.1mn as revenue rose by 11pc — reflecting growth in its US northeast operations.

Markwest secures customer

‘It was a great privilege to be part of [the Olympics]’ — LPG appliance firm Bullfinch managing director Andrew Williams (see p3)

US

CANADA

Sarnia

Pittsburgh MarcusHook

ExistingSunocoPipeline

MarkwestHoustonFractionator

Proposed ShellEthane Cracker

ExistingSunocoPipeline

New MarkwestLiberty Pipeline

Mariner East project

© 2012 Argus Media Ltd www.argusmedia.com

7 August 2012Argus LPG World

The biggest LPG story of the year contin-ues to unfold, with the first unmistakable signs of the US natural gas liquids (NGLs) export wave looking for ready markets.

US NGL firm Markwest has tied up a deal with an unnamed buyer for propane shipped from the Marcellus shale to Sunoco Logistic’s Marcus Hook export terminal in Philadelphia, Pennsylvania — and then, presumably, across the Atlantic (see p1).

The deal is the first export of Marcellus NGLs. It follows the export deal inked between US midstream giant Enterprise Products Partners and Japanese LPG importer Eneos Globe for about 200,000 t/yr of propane from 2014, to be shipped through the Panama Canal from the US Gulf (LPGW, 10 July, p1).

Just two years ago, most of the atten-tion of the international market focused on the rise in the export capacity of Qatar, Abu Dhabi and Iran as the “game changer” for the market. But NGLs out-put from the relentless US development of shale gas has turned out to be poten-tially a far more important paradigm shift. This is because all that extra supply —

US exports could reach a massive 65mn bl/yr next year — has to find a buyer.

Already, US chemical firms such as Westlake have enjoyed an unexpected windfall in quarterly profits because “ethane and propane decreased to their lowest prices in years as a result of ample supply made possible by shale gas production”, chief executive Albert Chao says (see p6).

The international markets are mostly interested in the destination of US pro-pane — and this is where ground-break-ing export deals are expected over the next few months.

But the US NGL industry is more concerned with ethane, which has dra-matically lost overall relative value this year. The price graph for ethane at the US trading hub of Mont Belvieu vividly demonstrates the effect of the ethane supply glut on prices (see p14).

Back in 2008, ethane prices in mid-July touched an annual high of $154¢/USG, while US Mont Belvieu prices

reached just over 171¢/USG (LPGW, 6 August 2008, p14). But now, ethane is around 35¢/USG, after dropping to 30¢/USG in June, with propane was around 80¢/USG.

Ethane’s relative value to propane has fallen sharply this year, but with noticeable price volatility. Ethane inven-tories at the start of May were 33mn bl — the highest levels since July 1995 — and added over 3mn bl alone in February and March. The cheaper ethane becomes, the more attractive it is to US petrochemi-cal firms as a feedstock. But this means that all the extra propane may not find a US home, unless it is then exported.

E d i t o r i a l

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7 August 2012Argus LPG World — In brief

North AmericaDow plans capex cutUS chemical manufacturer Dow aims to scale back capital expenditure over the next two years, citing economic weakness in Europe and China. But the company says its ethylene plant expansions should not be impacted. Dow reported a fall in second-quarter profits by 31pc to $740mn as sales declined by 9.5pc to $14.5bn. Sales in Dow’s feedstocks and energy segment — which includes ethylene pro-duction — were lower by 10pc to $2.7bn amid a 7pc decline in volumes and a 3pc decrease in prices.

AutogasTurkey posts autogas demand recovery Turkish autogas consumption rose firmly in May reaching just over 225,000t, up by 8pc on April and by 2pc on May 2011, accord-

ing to data from the country’s energy regu-lator EPDK. The rise is in line with industry expectations of higher demand during the summer driving season. Turkish LPG con-sumption fell by less than 1pc on the year in May to 312,570t, with an 8pc fall in piped LPG consumption to just under 77,900t contributing to the decline.

Autogas joint venture opens UK outletsThe UK’s leading autogas supplier Autogas has opened three outlets at Shell service stations in Carlisle, Kennford, and Poole. Autogas — a joint venture between Shell and UK LPG distributor Calor Gas, which is owned by Dutch LPG distribution giant SHV — supplies autogas to around 215 refuelling stations operated by Shell and independent retailers throughout the UK. Autogas demand in the UK is around 100,000 t/yr. The country has around 1,400 refuelling stations but has seen demand stagnate recently.

Europe

Basque investment on the riseSpain’s autonomous Basque government has earmarked €3mn ($3.7mn) to sub-sidise the purchase of vehicles that use alternative road fuels such as autogas. The investment forms part of a long-term energy strategy aimed in part at reducing motorist dependence on regular gasoline. Total investment in the energy programme amounts to €14.6mn.

Norway strike postponedThe threat of strike action at two Norwegian oil fields has been postponed until September after a date for media-tion talks was agreed. Oil workers’ union Industri Energi issued the strike threat on 13 July in protest over pay and work-ing conditions on behalf of 159 workers at international drilling contractor KCA Deutag — which runs two oil fields in the North Sea. The fields — Ringhorne and Kvitebjorn — are owned by ExxonMobil and Norway’s state-controlled Statoil, respectively. All strike action is now on hold until 30-31 August, the dates set for talks between unions and the oil industry association OLF.

Latin AmericaRepsol mulls Ecuador asset saleSpanish oil company Repsol is consider-ing the sale of its LPG distribution com-pany Duragas to the Ecuadorean govern-ment. Duragas operates a cylinder-filling plant in the coastal city of Guayaquil. Repsol bought the company in 1998, which serves 39pc of Ecuador’s LPG domestic market. The Ecuadorean gov-ernment has also approved the sale of Amodaimi Oil — a wholly-owned Repsol upstream subsidiary — to China’s state-controlled Sinopec subsidiary Tiptop Energy. Repsol is still in negotiations with Sinopec over the value of the deal. The transaction will expand Chinese oil companies’ growing presence in the Ecuadorean energy market.

UK LPG appliance firm Bullfinch has celebrated a key role in the London 2012 Olympic Games as the provider of all 8,000 Olympic torches carried in the lead-up to the opening ceremony in London on 27 July.

A personal thank you from Queen Elizabeth 2 topped an extraordinary business year for the company and its managing director Andrew Williams.

Most people watching footballer David Beckham hurtling down the river Thames in a speedboat as part of the opening ceremony likely had little appre-ciation of the technical complexity behind keeping his Olympic torch flame burning.

But Williams and his company know all too well the technical and design achievements which made the lit torches possible.

“Seeing the final cauldron lit using our torches was fantastic,” Williams says. “For Beckham’s we used a Pyrex tube to keep the flame lit as he was travelling so fast.”

And, while Williams has been too

busy to attend any of the Olympic events, there was one invitation he found time to answer. “We were invited to meet the Queen at Windsor Castle in July, along with some of the torch bear-ers from the 1948 London Olympics,” he says. “That was a real highlight.”

The torches were specially designed to burn strongly and stay lit, which meant gas travelled upward via a tube — “rather like a hot air balloon” — and not from the top, Williams says (LPGW, 26 June, p10). And the torches had to withstand torrential rains that swept the UK in June and July.

Bullfinch also made 600 of the bea-cons used during the Queen’s Jubilee celebrations earlier in the summer, and are finalising 600 Paralympics torches.

“The whole thing has been a great success, with no product failures,” Mitchell says. “It may not have been on the scale of the opening Olympic ceremony, but it answered a prayer and made it a miracle year for us. It was a great privilege to be part of it all.”

Olympic games boost UK firm


7 August 2012Argus LPG World —

Japan’s imports for June fell compared with May as the market entered the low-demand summer season.

Imports fell by around 23pc on the month to 876,051t, with shipments of propane down by around 28pc to 656,793t. And butane arrivals dipped by only 3pc to 219,258t, according to finance ministry data.

Imports from nearly all of Japan’s major Middle Eastern suppliers fell in June. Qatar imports fell the most,

dropping by around 34pc from May to 217,913t. Saudi imports fell by around 14pc to 182,366t. UAE shipments also dropped around 5pc to 213,145t. But Kuwaiti imports bucked the trend, reach-ing 291,613t, a massive 183pc higher than in May.

The latest figures show that total LPG imports for the first half of this year rose by over 10pc from a year earlier to 6.6mn t, reflecting a cold winter weather demand surge in the first quarter.

In brief

US propane inventories in pri-mary storage grew by 1.4mn bl to 67.5mn bl for the week ending 27 July, according to the US Energy Information Administration (EIA). The inventory build was concentrated on the US Gulf coast, where an addi-tional 1.15mn bl went into storage. Total stocks on the Gulf coast were reported at 32.1mn bl. Propane inven-tories are now 26pc higher than the EIA’s five-year average.

US stockbuild rises

South Korean private-sector LPG June inventories reached 262,205t, or 1.3pc lower on the month. A 6.4pc decline in propane stocks to 135,324t outstripped a nearly 5pc increase in butane stocks to 126,881t.

Imports in June also fell by around 6pc from the previous month to hit 450,029t. Relatively high stock levels over the previous two months prompted importers to cut back on purchases.

South Korean stocks fallJapanese imports drop as summer demand falls

US propane inventories mn blRegion 20 Jul 27 Jul 29 Jul 11

East coast 5.772 5.968 4.206

Midcontinent 26.917 27.061 21.786

US Gulf coast 30.920 32.067 21.878

Rocky Mts, west coast 2.409 2.367 1.484

Propylene* 4.647 4.912 2.442

Total 66.018 67.463 49.354

*included in US Gulf coast total — EIA

Production of US natural gas liquids (NGLs), particularly ethane, should out-pace demand between now and 2014, according to US NGL firm Williams chief executive Alan Armstrong.

“We continue to be concerned about ethane supplies in particular. We are not as concerned about propane because of the capacity to export it,” Armstrong says. And as new pipeline infrastructure brings more ethane to market in the years ahead, “we are concerned the expansion of supply may be ahead of the cracking capacity, particularly in 2013 and 2014”, he says.

US ethane stocks at the end of April stood at 33mn bl, according to the Energy Information Administration. This is the highest level since the agency’s records began in 1967.

High inventories drove NGL prices lower in the second quarter. At Mont

Belvieu, Texas, ethane averaged 40.2¢/USG and propane averaged 97.2¢/USG, according to Argus data. In July Williams revised its 2012 guidance lower but raised its 2014 earnings forecast to $3.15bn, assuming higher ethylene margins. The company is forecasting ethylene margins to rise to 40¢/lb — the same levels seen earlier this year — as ethane prices remain depressed.

Williams is expanding its Geismar, Louisiana, ethylene cracker to produce 1.95bn lb/yr of ethylene, which is slated for completion by late 2013.

Meanwhile, an abundance of NGLs and lower margins have lowered Williams’ profits in the second quarter by 42pc to $132mn. The company’s NGL margins fell on the year to 64¢/USG from 83¢/USG as high ethane and propane stocks, coupled with maintenance at eth-ylene crackers, muted feedstock prices.

Williams ‘concerned’ over ethane supply glut

Japanese LPG imports tJun 2012 May 2012 Jun 2011

Saudi Arabia 182,366 211,545 42,912

Qatar 217,913 331,597 437,672

Kuwait 219,613 77,675 131,660

UAE 213,145 225,028 184,061

Australia 42,541 202,681 23,094

Others 473 86,438 25,048

Total 876,051 1,134,964 880,116

— Finance ministry

South Korean LPG balance ’000tJun

2012May

2012Jun

2011±%

Jun/MayProduction 155.5 158.80 143.44 -2.1

Propane 65.02 73.05 58.70 -11.0

Butane 90.5 85.75 84.74 5.5

Imports 450.03 479.08 516.95 -6.1

Propane 187.78 201.16 177.16 -6.7

Butane 262.24 277.92 339.80 -5.6

Consumption 684.90 671.82 678.64 1.9

Propane 262.40 256.13 225.24 2.4

Butane 422.50 415.70 453.40 1.6

Exports 162 243.0 1.62 -33.3

Stocks 262.20 265.73 180.45 -1.3

— KNOC


7 August 2012Argus LPG World — China

China imported 398,600t of LPG in June, rising by 54,100t from volumes imported a month earlier, according to the latest Chinese customs statis-tics. June’s imports were the highest monthly levels since September 2010. This brought total imports during the first six months of the year to 1.33mn t, a decline of 1.8pc from the same period in 2011.

Price-sensitive Chinese import-ers took the opportunity to purchase relatively cheap LPG to rebuild their inventories. The Saudi Aramco con-tract price for June dropped by a massive $130/t from the previous month to $680/t and $765/t for pro-pane and butane, respectively.

Several Chinese terminals also took the opportunity to stockpile car-goes, seeking to capitalise on the price contango, with prompt prices at a discount to forward prices through to the end of 2012.

Chinese imports in June came almost wholly from Middle Eastern producers in the UAE, Saudi Arabia, Qatar and Kuwait, which accounted for 99.8pc of the country’s LPG imports. Exports from China fell in June, with volumes plunging 74,500t from the previous month to 85,300t. Cargoes headed primarily to the usual destinations of Philippines, Vietnam and Hong Kong.

Import climb continues Chinese LPG imports ’000tImports by country Jun 12 Jan-Jun 12 Jan-Jun 11 ±% Jan-Jun 12/11

UAE 137.2 323.6 221.7 46.0

Saudi Arabia 102.3 322.7 115.0 180.6

Qatar 111.8 260.3 319.3 -18.5

Kuwait 46.6 180.6 221.7 -18.5

Iran - 87.7 352.1 -75.1

Total Middle East 397.8 1,174.9 1,229.8 -4.5

South Korea 0.1 70.9 50.2 41.1

Malaysia - 22.0 -

Other Asia-Pacific - 7.6 54.8 -86.1

Total Asia-Pacific 0.1 100.5 105.1 -4.3

Nigeria - 53.2 - -

Kazahkstan 0.7 1.9 3.6 -47.5

Bahrain - - 16.7 -

Other countries - - - -36.2

Other regions 0.7 55.1 20.3 170.9

Total imports 398.6 1,330.5 1,355.2 -1.8

Imports by product

Liquefied propane 284.7 873.2 797.7 9.5

Liquefied butane 113.1 455.5 557.5 -18.3

Other LPG 0.7 1.9 - >100.0

Imports by province

Guangdong 242.5 875.2 953.7 -8.2

Guangxi 32.7 103.7 79.6 30.3

Total south China 275.3 978.9 1,033.3 -5.3

Shanghai 44.6 164.1 180.6 -9.1

Jiangsu 49.2 68.5 34.6 98.3

Zhejiang 28.7 116.8 102.7 13.7

Shandong - 0.0 0.1 -84.0

Total east China 122.5 349.4 318.0 9.9

Xinjiang 0.7 1.9 3.6 -47.5

Liaoning 0.1 0.3 0.3 9.4

Other provinces - 0.0 0.0 -34.8

NW/NE/N China 0.8 2.3 3.9 -42.7

Total imports 398.6 1,330.5 1,355.2 -1.8

Chinese LPG exports ’000tDestination Jun 12 Jan-Jun 12 Jan-Jun 11 ±% Jan-Jun 12/11

Hong Kong 29.7 176.3 172.9 2.0

Philippines 15.6 141.5 109.2 29.6

Vietnam 31.6 132.1 181.0 -27.0

South Korea 2.2 89.5 49.5 80.7

Malaysia 3.9 30.5 36.6 -16.5

Macau 1.9 25.7 26.2 -1.8

Indonesia - 5.0 0.0 >100.0

Singapore - 4.7 2.0 138.4

Cambodia - 4.0 2.0 102.5

Thailand - 2.5 10.1 -75.3

Other countries 0.4 3.2 5.2 -35.1

Total Exports 85.3 615.2 594.6 3.5


7 August 2012Argus LPG World — Americas

The price arbitrage between the US natural gas liquids (NGL) pricing hubs of Conway, Kansas, and Mont Belvieu, Texas, look likely to narrow as new pipelines connecting the hubs come on line, according to executives at US NGL giants Enterprise Products Partners and Oneok Partners.

Persistently high inventories and limited pipeline capacity pushed the premium of Mont Belvieu propane over Conway propane to 24¢/USG in the first half of the year, 13.25¢/USG wider compared with the same period last year.

The Conway-Mont Belvieu price differential for ethane:propane mix widened to 23.5¢/USG in favour of Mt Belvieu in the first half of the year compared with 17.12¢/USG in the first half of 2011.

A number of gas processors with facilities in areas far-removed from the two price hubs have been rejecting ethane into their residue gas streams citing poor economics driven by severe over-supply. But the price arbitrage should remain wide throughout the rest of 2012, Enterprise chief operating officer Jim Teague says.

The Houston-based partnership is roughly 35pc hedged on ethane volumes in the third quarter and is unhedged for the fourth quarter, in order to take advantage of presumably higher NGL prices in the months ahead.

“We are not locking in at these prices in the second half of the year on ethane,” Teague says. “We have been one of the guys that rejected ethane in the Rocky mountains, pri-marily because we could make more money buying ethane at Conway and moving it to Mont Belvieu on the pipeline capacity we control [Mid-America and Seminole pipelines],” (LPGW, 17 April, p6).

The opening of Enterprise’s 232,000 b/d Texas Express

Pipeline (TEP) — which will carry NGLs from the Permian basin to Mont Belvieu as early as mid-2013 — will narrow the differential between the two hubs, Teague forecasts. The TEP will connect in late 2013 to the 150,000 b/d Front Range pipeline being built by a consortium of midstream companies to bring NGLs south from the Rocky mountains (LPGW, 21 September, p4).

Advantage“I think there is going to be a product in Conway that we are going to be able to move to Mont Belvieu and take advan-tage of a pretty wide spread,” Teague says. “Once we bring the Texas Express Pipeline [on stream] it will have the impact of relieving some of that downward pressure on Conway rela-tive to Mont Belvieu.

Oneok Partners, which has a large asset base in the US midcontinent, says the price differential between the two hubs will narrow to 15-20¢/USG in 2013 and again to 8-10¢/USG in 2014 as a result of new pipelines.

US hubs set for arbitrage shift

Enterprise Products Partners, the largest natural gas liquids (NGL) midstream provider on the US Gulf coast, saw second quarter profits rise by 26pc to $567mn, reflecting higher transportation and fractionation volumes.

NGLs throughput on Enterprise pipelines rose by 187,000 b/d to 2.4mn b/d during the quarter, and total frac-tionation volumes rose on the year by 20pc to a record 654,000 b/d — thanks largely to a fifth 75,000 b/d fractionator in Mont Belvieu, which went on line in October (LPGW, 5 October, p3).

Equity NGLs production — the amount of liquids Enterprise receives for

providing gas processing services — fell by 20pc to 96,000 b/d, owing to a 10,000 b/d decrease in ethane recovery. Overall fee-based gas processing totalled a record 4.2bn ft³/d (119mn m³/d).

“During the second quarter of 2012, the US petrochemical industry had an extended period of planned and unplanned plant turnarounds, which led to lower demand and prices for ethane,” Enterprise chief executive Mike Creel says.

Enterprise’s natural gas process-ing and NGL marketing division saw operating profit rise by 12pc to $339mn in the second quarter.

Enterprise profits riseUS chemicals firm Westlake Chemical reported $115.5mn second-quarter profits, or 43pc higher than the same period in 2011, reflecting the abundance of relatively cheap NGL feedstock. “Our olefins and vinyls segments both ben-efited from lower-cost feedstocks, as ethane and propane decreased to their lowest prices in years as a result of ample supply from shale gas produc-tion,” chief executive Albert Chao says. But Westlake saw overall sales decline by 1pc to $11mn during the period amid lower prices for many products. Ethylene prices averaged 57.5¢/lb dur-ing the second quarter.

Westlake in feedstock gains

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UK firm G-volution is convinced that dual fuel technology, combining autogas with diesel, is the perfect fuel for Europe’s road haulage firms.

G-volution’s Optimiser dual fuel system, which is designed, developed and manufactured in the UK, is “completely innova-tive”, managing director Chris Smith says.

“Diesel is very effective but we need to make it cleaner and cheaper. Combining it with LPG is the logical answer,” Smith says. “LPG is available and known about, cheap and clean.”

The Optimiser’s innovation comes from the way the two fuels are co-combusted. The system is designed to eliminate over-powering and fuel waste, Smith says. This is achieved as the system continuously adjusts the relative ratios of the two fuels according to engine operating conditions.

The Optimiser sits on top of a standard diesel engine’s electronic control device — which processes fuel injection timings in the engine — and is designed to use a wide variety of secondary fuels, such as ethanol, compressed natural gas (CNG), green hydrogen, and potentially a third fuel.

“There is an element of uncertainty about the price of LPG and whether the government will put the taxes up beyond 2015. But there is always some risk in business,” Smith says.

Smith, an entrepreneur with a successful track record in founding various retail companies, bought the rights to a dual fuel technology system in 2007 after originator UK firm Greenpower entered liquidation. The system forms the basis of the Optimiser system, and Smith won UK government fund-ing and grants from the Carbon Trust and Finance Wales in 2010 and 2011 to bring it to market.

G-volution is on target to install the Optimiser system on over 100 trucks for around 14 UK road haulage companies by the end of the year. The companies notch up a collective annual road haulage distance of around 10mn km.

The cost of fitting an LPG version of the G-volution Optimiser to a diesel truck is around £9,000 ($14,100). An equivalent installation using rival fuel CNG would cost around £20,000. Smith says the Optimiser system cuts hauliers’ fuel bills by around 12pc based on LPG. This reduces an annual fuel bill of £50,000 by £6,000 a year, enabling installation costs per truck to be repaid within 18 months.

Fearing changeEurope’s road haulage sector has faced a particularly severe business environment as a result of the region’s continued economic slowdown.

The economic crisis has cancelled out six years of growth in European road freight transport — especially between 2009 and 2010 — according to the European Commission’s statisti-cal body Eurostaat. This would make fuel costs a key concern for the sector. “If 40pc of the cost of running a truck is the fuel, and [our system] can save you 10-15pc, why would you not [use it],” Smith says.

For G-volution, the use of ever-cleaner transport fuels is part of an inevitable future that transport firms will face. “With oil running out, new and dual fuels are the future if we are to lead sustainable lives,” Smith says. “People fear change, and you have to earn their trust. At the moment this is a new concept, but soon it will not be.”

UK firm shows zeal for dual fuels

Autogas/Asia-Pacific

The recent drop in LPG import prices has attracted Japanese buyers back into the spot market ahead of the winter demand season. Prices of competing fuel LNG have risen, reflecting strong demand from the power sector.

Higher LNG import prices have pushed up tariffs for town gas and electricity, which use LNG as a main feedstock. This is making LPG more competitive. Average propane import costs fell by 17pc to $801.30/t in June from $967.16/t in May, while LNG import prices rose by 1.5pc to $894.96/t in the same period, according to Japanese customs data.

A strengthening Japanese yen against the US dollar is making imports

more attractive to buyers in Japan. Exchange rates averaged ¥79.27 to the US dollar in June compared with ¥80.41 in May, reducing imported fuel prices in real terms. Average import costs for propane in June fell by 18.3pc from a month earlier in yen terms, while LNG prices edged up slightly by 0.04pc.

Japanese propane import prices have been falling since May, in line with the lower Saudi Aramco monthly con-tract prices (CP). A seasonal decline in demand in Asia-Pacific has also helped pushed down spot prices.

Japan’s propane import prices fell by 33pc from April to June in dollar terms, while the propane CP dropped by 31.3pc during the same period.

Japan’s propane import price has fallen by an even greater 35.5pc in yen terms over the period, compared with just a 0.6pc decline in LNG prices on the same basis.

Japan’s LNG import prices have increased gradually since March 2011, when the massive earthquake and tsunami sparked a safety crisis at the Fukushima Daiichi nuclear power plant and led to the widespread clo-sure of reactors. Japan’s nuclear power shortage has forced power utilities to increase LNG imports to maximise gas-fired power generation, pushing up LNG spot prices. Lower propane import costs have also driven down prices on a retail basis.

Japanese buyers return in force



Kazakhstan LPG production slipped in June, reflecting out-ages of gas processing plants (GPPs) in planned maintenance and from fire. But output for the first half of the year is still climbing as a result of full operations from a new GPP.

Kazakh production decreased by 2,300t in June to 180,100t, according to the latest data by the Kazakh oil and gas ministry (see table). The drop in output led to the lowest levels since February.

But LPG production in January-June rose by 26,000t to 1.1mn t. The new 120,000 t/yr GPP operated by independent oil and gas company Zhaikmunai — which was launched in May 2011 — finally reached full capacity (LPGW, 6 July 2011, p6). And GPPs operated by Turgai Petroleum and the 50,000 t/yr Akshabulak and 200,000 t/yr Zhanazhol also increased their output.

ShutdownsOutput in June was hit by maintenance works at Kazakhstan’s second-largest LPG producer, the Pavlodar petrochemical plant, which began in June. And a fire at the Kazakh GPP caused a temporary operational shutdown from 6-10 June.

Chevron-led Tengizchevroil (TCO), the largest LPG pro-ducer in the country, increased output by 11,600t to 103,800t. But this rise could not offset losses from the Pavlodar and Kazakh GPPs.

Market participants forecast that July production will also decrease — and will remain below expected levels in August. The main reason for the expected decline in July is the result of continuing maintenance at the Pavlodar petrochemical plant, which finally ended on 24 July. The company usually produces as much as 25,000 t/month of LPG.

Another bearish impact on Kazakhstan LPG production in July has been the unusually hot weather which reduced the operating schedules of various GPPs. And the hot weather will continue in the first half of August, according to longer-term forecasts.

Planned maintenance work is also scheduled at TCO’s

plant this month. This will be the GPP’s first major mainte-nance — which is expected to take several weeks — accord-ing to TCO chief financial officer Tim Miller. The plant was launched in the third quarter of 2008. TCO could reduce LPG exports by 25pc to around 67,000t in August compared with July, traders say.

Domestic marketMeanwhile, the Kazakhstan government is set to limit the LPG wholesale price on the domestic market to $238.80/t excluding VAT starting on 13 August. The current price is between $300-370/t.

The new price limit was not welcomed by the country’s LPG producers. “The cost of our product is high and we ship to the domestic market a lot,” one producer says.

The government plans to set the domestic maximum wholesale LPG price every quarter using a formula based on Argus daf Brest price assessments, and will review the new limit on 1 October.

But some traders say the new limit price was actually set in July, and not in line with current European LPG price assessments. This would mean that the limit price should be above the government prices as the average LPG price at the Belarusian-Polish border has since increased by $25.50/t to $640/t Argus daf Brest.

Kazakhstan output dips

Central Asia

Kazakhstan LPG output ’000tProducer Type Jun ±% Jun 11 Jan-Jun ±% Jan-Jun 11

Pavlodar Refinery 17.4 -14.7 128.8 12.9

Chimkent Refinery 12.3 -16.3 75.0 -4.6

Atyrau Refinery 1.4 -15.7 8.3 -21.7

Kazakhstan GPP 6.4 -33.5 52.3 -10.4

TCO GPP 103.8 -8.0 606.9 -8.2

Zhanazhol GPP 17.4 -4.5 110.1 15.2

Akshabulak GPP 7.2 132.0 38.4 56.0

Turgai Petroleum GPP 5.5 30.9 33.5 19.2

Amangeldinsky GPP 0.5 -4.4 2.7 -4.0

Zhaikmunai GPP 8.2 >100 45.0 >100

Total 180.1 -3.3 1,101.1 2.4

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Pakistan’s autogas sector is excelerating at a rapid pace, at the expense of rival fuel compressed natural gas (CNG). State-owned PSO — the country’s largest oil marketing company — is busy expanding its autogas retail network.

“We have identified 100 of our existing gasoline and CNG filling stations across the country for the development of autogas facilities,” PSO says. The company hopes to obtain soon the necessary licences from the Oil and Gas Regulatory Authority (Ogra) which will allow the setting up of the retail outlets in phases.

Ogra is expected to issue PSO with licences for the construction of 26 LPG autogas filling facilities by the end of the third quarter. Ogra’s approval is based on an energy ministry programme to encourage the development of LPG infrastructure and the phase-out of CNG use over the next three to five years.

Pakistan’s now chronic gas shortages have led to the government’s decision to turn away from CNG in favour of autogas (LPGW, 12 June, p6).

PSO owns and operates Pakistan’s largest transport fuel network of 3,689 filling stations, of which 3,500 serve the retail sector and 189 cater to bulk customers. The company was given an ambitious target by the energy ministry to set up 100 autogas stations by the end of this year and about 1,000 over the next three to five years.

The company is currently prequalifying contractors for the development of LPG autogas stations on an engineering, procurement and construction basis and received bids on 13 July. Prequalified contractors will participate in a tender to be issued at an unspecified date.

Supply changesThe government on 24 July began restricting LPG supplies produced by state-owned energy companies to the country’s two state-owned gas utilities — Sui Southern Gas (SSGC) and Sui Northern Gas Pipelines (SNGP) — in order to fast track the development of Pakistan’s LPG infrastructure.

The utilities in January announced plans to enter the LPG business and aim to build two LPG air mix plants — propane converted into synthetic natural gas (SNG). They also plan to set up LPG bottling and filling facilities (LPGW, 17 January, p7). The objective of the strategy is to ensure regular supplies of LPG in the domestic market and to hinder any cartel-like activi-ties by private-sector marketing companies.

State-owned entities Oil and Gas Distribution and Pakistan Petroleum are now allowed to set up LPG extraction plants on their own or outsource extraction activities. The LPG could then be sold to SSGC and SNGP.

Around 365,000 t/yr of additional LPG production could be achieved from Pakistan’s oil and gas fields, according to industry estimates. Current local production has reached

438,000 t/yr with demand more than 547,500 t/yr, accord-ing to the LPG Association of Pakistan. The government’s policy changes would also allow the country’s more than 3,300 CNG stations and over 5,000 gasoline outlets to set up autogas refuelling stations — and source bulk supplies of LPG from any licenced marketing company selling local or imported product.

Ogra will issue one-year provincial licences for setting up autogas stations to marketing companies capable of supplying a minimum of 3,650 t/yr of LPG for three years. Marketing companies will have to ensure that adequate stor-age, cylinders, and logistics infrastructure is built within the one-year licence period in line with the company’s marketing. After Ogra approval of developed infrastructure, the one-year provisional licence will be converted to a 15-year licence.

Rising demandPakistan’s LPG distributors association chairman Hadi Khan says LPG demand started rising after a decrease in the Saudi Aramco July contract price for LPG and could reach 912,500 t/yr in the coming weeks amid anticipated higher consump-tion in the Ramadan season — which started in mid-July. The price of locally produced LPG now stands at around 67,000 Pakistan rupees/t ($712.76/t), down by more than 27pc from over Rs90,000/t in May, Khan says.

But Pakistan’s LPG availability tends to sharply contract when demand goes up. “We have recommended to the gov-ernment that the 16pc import duty on LPG should be removed, or at least cut, to sustain imports,” Khan says. The increase in the number of retail autogas stations will add to the demand, as will the proposed air mix plants.

Pakistan’s energy secretary Waqar Masood says the gov-ernment is working on short-term projects to meet the natural gas deficit, including LPG imports of around 912,500 t/yr for SNG projects.

SSGC’s two air mix plants at Port Qasim in Karachi will use a mixture of imported and local LPG. The plants will inject SNG into SSGC’s distribution and transmission system for supplies to industries and power plants in the area. The company opened three bids on 12 July for the supply and installation of its 50mn ft³/d air mix plant at Port Qasim, which is expected to go on line by the end of the year. SSGC plans to inject 100mn ft³/d of SNG into its gas distribution and transmission system.

SSGC is responsible for the distribution and transmission of natural gas in the southern Balochistan and Sindh provinces where it already has four small air mix plants that supply gas to remote areas where distribution through conventional means is difficult and costly. The company will also supply SNG to utility Kesc’s 1,200MW dual-fired Bin Qasim power plant and industries in the Port Qasim area.

Pakistan proceeds with autogas expansion

Autogas


7 August 2012Argus LPG World — Finance

Microfinance — the provision of financial services to micro-entrepreneurs and small businesses, which lack access to banking and related services — is a vital tool to encourage overall economic market development in some of the poor-est countries in the world, especially Africa. It is also a way to spur LPG growth as a cooking fuel in lieu of wood or charcoal — which would aid efforts to curb deforestation.

“Microfinance is critical to enable LPG access for many poor families,” says Thomas Thivillon, head of product development at French non-governmental organisation Entrepreneurs du Monde. The organisation operates programmes in 10 countries and provides capital to microfinance institutions in the African country of Burkina Faso. Thivillon sees a role for microfinance loans for LPG cooking equipment (LPGW, 24 July, p10).

“The cost of an LPG kit, including a cylinder, burner and a cook stove, is usually around €40 ($45),” Thivillon says. “This is a significant investment for poor families living close to the poverty line. They do not have the ability to access LPG with-out specialist financial services.” Burkina Faso’s small LPG sector also enjoys government price subsidies for about half of the cost of a 6kg cylinder.

RepaymentA key difference between government subsidies — or a government-sponsored fuel substitution programme such as Indonesia’s massive switch to LPG from kerosine — and microfinance is that the microfinance loan has to be repaid.

Thivillon sees the best fit for microfinance and LPG in the provision of loans to small businesses and entrepreneurs such as restaurants or cafes which can, in turn, generate income to help with repayment.

Indonesia-focused microfinance institution Microbanker Connections managing director Iwan Nazirwan also believes that lending to microbusinesses can be a very profitable endeavour as long as the borrowers generate steady cash flows to repay the loans. But government assistance with startup costs would be necessary for the poorest households, he says.

Nazirwan says a microfinance loan only makes com-mercial sense when it reaches above $300, while credit to solely cover the cost of a stove kit does not. Banking can be a labour-intensive business in parts of the developing world where financial infrastructure is rudimentary and machines and internet access limited. “The economy of scale of microfinance is substantially less than for regular banking in developed countries,” Nazirwan says.

“The transaction cost involved in microfinancing is high. A $100 loan might cost $100 to process”, says Pepukaye Bardouille, a senior energy specialist with the Clean Energy Advisory Group at the International Financial Corporation.

Bardouille says when LPG is used for consumption in places where the alternatives of wood fuel or charcoal are much cheaper, “then it is not always an obvious solution” — given the problem of transaction costs. Charcoal and kerosine can be bought in small quantities at local markets, while LPG is not available in such a manner.

The counter-argument is that the relatively substantial amount of money families are able to save by switching to LPG — typically $5/month in Burkina Faso — can easily secure loan repayments and low loan defaults. Thivillon argues that the perception by some microfinance institutions about LPG costs should change. “A stove is not like a TV. Although it does not directly generate income, its saving potential and the related investment opportunity does,” he says.

Microfinancing for LPG is not simply a financial transac-tion, says Shari Berenbach, director of microenterprise and private enterprise promotion at charity US Aid. “Tax policies, government subsidies, distribution channels as well as end-user acceptance all play an important part in determining the activity of microfinance institutions,” she says.

The weak distribution networks and lack of necessary infrastructure in the poorest countries can make a formidable deterrent to promoting LPG use.

Inadequate roads, especially in the rainy season, are a special problem in rural sub-Saharan Africa. Urban areas also have peculiar challenges for microfinanciers. Although infra-structure is not a problem, the poor tend to be difficult to track down for loan payment enforcement, Berenbach says.

LPG offers microbusiness opportunityThe growth of LPG as a clean cooking fuel in some of the world’s least developed countries faces the significant financial challenge of how poor communities can afford upfront stove, burner and cylinder costs. Microfinance offers one solution

The last issue of LPG World included an interview with Entrepreneurs du Monde’s Thomas Thivillon which needs further clarification (LPGW, 24 July, p10). The sentence: “Many non-governmental organisations also support LPG cook stoves, but hand them out for free. It caused a lot of damage to the market networks we have been trying to sup-port through sale of products” should read “Many NGOs hand out energy products for free, which disturbs the market for energy products and energy services in general, and affects the population’s willingness to pay for these types of products and services.”

Clarification



Belgium-based shipping group Exmar reported first-half 2012 profits of $33.6mn compared with a loss of $38mn for the same period one year ago, helped by the strong performance of its LPG ship-ping fleet, according to the group’s preliminary unaudited results.

The shipper’s LPG segment reported a $13mn operating profit dur-ing the first half of the year, thanks to

firmer freight rates and strong LPG demand. Demand for very large gas carriers (VLGC) was led by Middle East charterers looking to ship car-goes to Japan and expected volume growth from Qatar, Abu Dhabi and Angola. “Due to the available supply, the (VLGC) market is expected to con-tinue on this positive trend for the short to medium term,” the company says.

Shipping ratesVery large gas carrier rates continue to hold above the $70/t level for the bellwether Mideast Gulf to Japan route. But activity throughout August on the spot charter market looks likely to be limited, especially east of Suez. Atlantic trade looks bullish, with plentiful spot enquiries. The large cargo and mid-sized fleets look more balanced at present.

Shipping/infrastructure news

Shipping ratesSpot $/t

44,000t Mideast Gulf/Japan 72.50

4,000t UKEC/Mohamedia nc 75.00

1,800t Tees/ARA 40.00

1,800t Tees/Lisbon 94.00

— EA Gibson

Shipping rates12-month time charter $/calendar month

78,000m³ 1,200,000

59,000m³ nc 950,000

35,000m³ nc 775,000

5,000m³ (west) nc 315,000

3,500m³ pressurised (west) nc 265,000

3,500m³ pressurised (east) nc 235,000

US ethylene plant gross margins ¢/lb of ethylene

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Ethylene plant gross margins (Mont Belvieu, Texas) ¢/lb of ethylene

NGL economics/shipping

Ethylene plant total variable cash cost*5 Jul 12 Jul 19 Jul 26 Jul 2 Aug

Ethane (E/P mix) 7.42 7.54 11.50 10.67 10.38

Purity ethane 9.03 8.91 12.27 11.72 11.42

Propane 8.60 11.08 15.34 14.37 13.00

N-Butane 20.14 21.91 26.02 26.03 23.07

Natural gasoline 30.80 30.88 35.74 36.34 38.09

Naphtha 27.23 28.51 33.39 34.83 38.19

Gasoil 45.46 47.21 51.61 53.10 52.91

*at Mont Belvieu, Texas — Purvin & Gertz

Ethylene plant gross margins* (graph below)5 Jul 12 Jul 19 Jul 26 Jul 2 Aug

Ethane (E/P mix) 32.13 34.64 33.55 35.19 35.04

Purity ethane 30.52 33.26 32.78 34.14 34.00

Propane 30.95 31.09 29.70 31.49 32.42

N-Butane 19.33 20.19 18.95 19.75 22.27

Natural gasoline 7.62 10.16 8.17 8.38 6.20

Naphtha 11.17 12.51 10.51 9.88 6.08

Gasoil -7.06 -6.18 -7.71 -8.39 -8.64

*at Mont Belvieu, Texas — Purvin & Gertz



European butane

• Large cargo cif Amsterdam-Rotterdam-Antwerp (ARA) butane prices strengthened last month to $830/t — mirror-ing crude and naphtha gains — climbing $67/t from $763/t in late July.

• Butane’s value relative to naphtha strengthened to 92pc by the start of August compared with 88pc in mid-July as product tightness lent support to price levels.

• Butane coaster prices on a cif basis rose by almost $40/t to around $808/t, supported by rising naphtha prices and firm demand.

• Butane coaster demand came from petrochemical com-panies in the ARA region and north African Mediterranean region as a result of the fasting month of Ramadan. Butane prices in fob markets rose by $10/t to $770/t.

• Fob Mediterranean coaster prices fell by almost $50/t from mid July to $835/t by 3 August reflecting selling pres-sure on the spot market. But prices began to rally to as high as $890/t by the end of the first week of August.

European propane

• Large cargo cif Amsterdam-Rotterdam-Antwerp (ARA) propane prices rose to unseasonal highs in August.

• Another arbitrage cargo was diverted away from north-west Europe and planned maintenance at North Sea terminals in August and September continued to support propane prices.

• Levels climbed to $848/t cif ARA at the start of August, a $50.50/t increase from mid-July prices of around $797.50/t cif ARA.

• Propane’s value relative to naphtha strengthened again, trading at a discount of $34/t compared with $66/t in the second half of July.

• European coaster prices rose by over $50/t to around $775/t on a fob basis over the last two weeks of July, with levels continuing to firm.

• Spot trade and discussion continued to be thin in the inland ARA market with prices falling to $785/t by 3 August.

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Asian butane

• Saudi Aramco set the August butane monthly contract price (CP) at $775/t, compared with $620/t in July.

• The new CP ends the premium to propane that butane enjoyed all year. Butane demand from northeast Asian pet-rochemical companies has eroded.

• A western major sold two 22,000t butane-only cargoes to two northeast Asian importers at naphtha assessments minus $35/t. The US-origin cargoes were slated for 10-15 August delivery into Japan.

• In the pressurised market, Vietnamese importer Saigon Petro bought via tender 900t of pressurised cargo arriving during 9-14 August, in a ratio of around 35-65 propane to butane from an Asia-Pacific trading firm at August CP plus $135-140/t cfr Cat Lai.

• In south Asia, a trading firm also sold around 1,800t of evenly-split pressurised cargo arriving during first-half August to importers in Bangladesh at July CP plus $290-300/t cfr Mongla.

Asian propane

• Saudi Aramco set the August monthly contract price (CP) for propane at $775/t, up by a massive $200/t from July.

• The August CP was generally in line with market expec-tations that Asia-Pacific LPG prices hit the lows of the year in July — and are due to rebound as winter primary stockpiling begins in northeast Asia.

• Qatar’s Tasweeq sold a mixed 44,000t cargo to a European trading firm at August CP plus $16/t, for 4-5 August loading fob Ras Laffan. The Mideast producer also sold a mixed 44,000t cargo for end-August loading.

• A northeast Asian importer secured a mixed 44,000t cargo for 9-14 August loading on a fob Bandar Iman Khomeini or Assaluyeh basis.

• Several 22,000t propane-only cargoes switched hands as consumer demand as well as short-covering kept pre-miums supported. CFR premiums for second-half August into Japan and south China rose from low $80s/t to mid $90s/t on a CP-related basis.

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Americas propane

• Spot propane prices at Mont Belvieu rose during the last two weeks of July, reaching 88.62¢/USG by 3 August, as crude prices rallied.

• US propane’s value relative to crude fell from 42pc of WTI on 16 July to only 40pc by 3 August.

• Market participants reported significant buying interest in the outer months during the first week in August, as partici-pants watched the arbitrage window to Europe open and sensed export opportunities.

• Primary stockbuilding ahead of the heating demand season should add a bullish impetus to prices this month.

• Gulf coast propane exports are set to rise sharply once expansion work at the NGL terminal operated by US mid-stream Enterprise Products Partners is completed by the end of the year.

• In the midcontinent, Conway propane tracked volatility in the crude market, averaging 28pc of WTI in July.

Americas butane and ethane

• Ethane prices at Mont Belvieu remained range-bound at the start of August, hovering at around, 37¢/USG, or 17pc the value of WTI.

• Ethane’s price relative to propane fell to 41pc from 43pc during the past two weeks, as ethane lagged gains in the heavier feedstock.

• Butane prices at Mont Belvieu fell sharply during the second half of July and start of August from 142.125¢/USG on 20 July to 132.875¢/USG on 3 August. Buying interest remained thin.

• Mont Belvieu butane’s value relative to crude dropped to 61pc from 66pc during the second half of July and start of August.

• Conway butane and isobutane prices rose by 9pc, while the spread between the two products widened by 5¢/USG to around 45.5¢/USG by the start of August. Midcontinent ethane:propane mix posted a modest recovery to reach 15.75¢/USG on 3 August.

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Propane Mont Belvieu non-LST ¢/USGPropane Mont Belvieu non-LST ¢/USG

Jan Apr Jul Oct30

40

50

60

70

80

90

100

201020112012

Propane Mont Belvieu LST percentage to Nymex WTI %Propane Mont Belvieu LST percentage to Nymex WTI %

Jan Apr Jul Oct100

150

200

250

201020112012

Butane Mont Belvieu non-LST ¢/USGButane Mont Belvieu non-LST ¢/USG

Jan Apr Jul Oct25

50

75

100

201020112012

Ethane Mont Belvieu ¢/USGEthane Mont Belvieu ¢/USG



INTERNATIONAL LPG

Markets

Naphtha $/tJul 11 Aug Sep Oct Nov Dec Jan 12 Feb Mar Apr May Jun Jul

Cargoes cif NWE 979.38 939.55 940.53 882.48 865.59 876.75 949.60 1,029.17 1,068.64 1,029.61 877.61 730.66 826.15

Cargoes c+f Japan 974.32 946.11 946.70 883.55 578.35 902.54 955.56 1,032.07 1,074.01 1,035.56 897.81 746.32 833.72

Ethane ¢/USGJul 11 Aug Sep Oct Nov Dec Jan 12 Feb Mar Apr May Jun Jul

Mont Belvieu 81.75 73.86 79.33 90.05 87.42 80.77 66.71 49.62 53.05 49.56 41.75 30.33 34.77

Chinese domestic prices yuan/tJul 11 Aug Sep Oct Nov Dec Jan 12 Feb Mar Apr May Jun Jul

East China terminal

Ningbo ex terminal 6,713 6,721 6,657 6,210 6,121 6,312 6,620 7,393 8,346 7,603 6,517 5,542 5,905

Wenzhou ex terminal 6,731 6,721 6,686 6,463 6,350 6,350 6,617 7,393 8,507 7,706 6,925 5,958 6,100

Taicang ex terminal 6,713 6,721 6,671 6,210 6,121 6,312 6,620 7,393 8,507 7,603 6,531 5,542 5,894

Shanghai ex terminal 6,745 6,743 6,695 6,370 6,221 6,374 6,618 7,354 8,575 7,641 6,891 5,604 5,902

Zhangjiagang ex terminal 6,713 6,721 6,664 6,210 6,121 6,312 6,620 7,393 8,507 7,603 6,531 5,543 5,905

Fujian ex terminal 7,025 7,018 6,642 6,467 6,400 6,400 6,643 7,393 8,641 7,856 7,450 6,500 6,273

East China refinery

Shanghai ex refinery 6,004 6,070 6,381 5,770 5,879 6,041 5,743 6,388 7,405 7,244 5,864 5,340 5,893

Zhenhai ex refinery 6,360 6,294 6,612 6,022 6,136 6,352 6,161 6,783 7,766 7,465 6,213 5,648 6,139

Yangzi ex refinery 5,956 5,964 6,292 5,737 5,841 6,006 5,778 6,365 7,320 7,071 5,858 5,291 5,826

Fujian ex refinery 6,355 6,302 6,396 5,908 5,999 6,282 6,318 6,744 7,562 7,150 6,091 5,369 5,764

Gaoqiao ex refinery 5,894 5,965 6,242 5,699 5,769 5,854 5,624 6,263 7,423 7,150 5,806 5,183 5,701

South China terminal

Zhuhai ex terminal 6,968 6,767 6,606 6,253 6,267 6,444 6,785 7,489 8,641 7,842 6,580 5,859 6,196

Shenzhen ex terminal 7,088 6,883 6,712 6,388 6,360 6,473 6,795 7,499 8,647 7,891 6,771 5,894 6,250

Raoping ex terminal 6,764 6,285 6,342 5,908 6,035 6,295 6,505 7,185 8,341 7,319 6,030 5,335 5,734

Nansha ex terminal 7,087 6,848 6,660 6,328 6,348 6,458 6,812 7,506 8,681 7,884 6,796 5,810 6,216

Shantou ex terminal 6,338 6,256 6,271 5,825 5,880 6,260 6,505 7,187 8,568 7,319 6,164 5,368 5,734

Yangjiang ex terminal 6,479 6,369 6,443 6,143 6,073 6,280 6,462 6,945 7,626 7,268 6,110 5,424 5,963

South China refinery

Maoming ex refinery 6,415 6,284 6,441 6,182 6,110 6,349 6,410 6,881 7,640 7,339 6,175 5,500 5,964

Guangzhou ex refinery 6,455 6,387 6,515 6,192 6,148 6,366 6,434 6,964 7,788 7,328 6,156 5,457 6,016

Northeast China refinery

Daqing ex refinery 5,169 5,233 5,498 5,710 5,269 6,349 5,203 5,345 6,291 6,609 6,009 4,918 5,150

Dalian ex refinery 5,699 5,900 6,193 6,003 5,798 6,366 5,850 6,105 7,109 7,463 6,123 5,135 5,627

Northwest China refinery

Urumqi ex refinery 4,361 4,451 4,424 4,570 4,126 4,107 4,150 4,226 5,089 5,350 4,950 4,663 4,641

Inland China refinery

Lanzhou ex refinery 5,594 5,727 5,832 5,903 5,550 5,512 5,530 5,724 6,689 6,781 5,482 4,900 5,271

Yan-An ex refinery 5,543 5,470 5,875 5,456 5,279 5,451 5,278 5,771 6,643 6,528 5,360 4,663 5,318

Apr 11 Jul Oct Jan 12 Apr Jul400

600

800

1,000

1,200

1,400

NWEUSGCJapan

Propane NWE, USGC, Japan $/tPropane NWE, US Gulf coast, Japan $/t

Apr 11 Jul Oct Jan 12 Apr Jul500

600

700

800

900

1,000

1,100

1,200

1,300

Saudi ArabiaAlgeriaNorth Sea

Propane export prices Saudi, Algeria, North Sea $/tPropane export prices Saudi, Algeria, North Sea $/t


7 August 2012Argus LPG World — Prices monthly

PropaneAug 11 Sep Oct Nov Dec Jan 12 Feb Mar Apr May Jun Jul Aug

Middle East $/t

Saudi Arabia 835.00 790.00 735.00 750.00 770.00 850.00 1,010.00 1,230.00 990.00 810.00 680.00 575.00 775.00

Kuwait 835.00 790.00 735.00 750.00 770.00 850.00 1,010.00 1,230.00 990.00 810.00 680.00 575.00 775.00

Mediterranean $/t

Algeria (Sonatrach) 880.00 830.00 770.00 775.00 790.00 810.00 950.00 1,160.00 955.00 815.00 660.00 580.00 765.00

Spot prices $/t

Large cargo cif ARA 847.84 828.43 780.79 804.25 820.58 887.50 1,030.76 1,032.77 921.13 714.66 610.16 756.27

Large cargo cif Lavera 837.84 816.73 768.21 791.32 807.95 873.02 1,034.57 1,031.02 915.13 731.14 625.71 773.36

Large cargo USGC 790.59 807.10 760.79 753.48 721.00 668.65 629.73 na na na na na

Large cargo Japan CFR 832.74 800.02 777.88 821.79 846.95 968.82 1,121.12 1,123.98 924.33 756.21 654.33 774.39

Large cargo East China CFR 832.74 799.48 776.68 821.41 845.29 968.82 1,121.12 1,123.98 924.33 756.21 653.48 774.39

Large cargo South China CFR 832.74 799.02 775.48 821.17 843.62 968.82 1,121.12 1,123.98 924.33 756.21 652.91 774.39

Large cargo Far East Index 832.74 799.52 776.68 821.48 845.29 968.82 1,121.12 1,123.98 924.33 756.21 653.62 774.39

Asia spot premiums to CP $/t

Mideast Gulf -2.52 -2.23 -2.00 4.10 4.26 -3.79 -35.88 -51.00 -20.70 -26.52 -22.43 11.96

South China (pressurised) 84.55 87.35 90.65 92.07 101.76 99.45 82.79 53.02 83.93 82.59 93.64 139.64

East China (refrigerated) 6.07 21.80 39.73 68.02 65.10 83.03 81.12 -61.11 -32.33 -23.98 -0.29 158.89

South China (refrigerated) 6.07 21.34 38.63 67.79 63.43 83.03 81.12 -61.11 -32.33 -23.98 -0.86 158.89

Taiwan 27.55 29.05 41.93 62.21 56.00 57.55 52.45 3.18 28.13 31.93 41.33 91.71

Japan 27.55 29.57 43.03 62.45 56.86 57.55 52.45 3.18 28.13 31.93 41.33 91.71

Mont Belvieu ¢/USG

LST 152.88 156.02 147.16 145.77 139.56 129.51 122.06 125.91 119.39 95.01 78.62 87.40

Non-LST 153.00 156.15 147.19 145.60 139.18 129.15 122.27 126.15 119.47 94.94 78.17 87.26

Europe $/t

Coasters fob NWE 777.14 784.09 780.81 773.36 800.48 846.43 977.14 981.71 888.03 669.55 561.58 698.30

Barges fob NWE 882.84 860.80 789.10 816.25 821.00 859.05 1,088.45 1,078.11 959.68 711.59 623.37 775.75

Coasters fob Med 812.93 870.80 837.40 823.68 798.00 882.26 1,047.74 1,042.73 936.58 762.61 619.74 737.96

ButaneAug 11 Sep Oct Nov Dec Jan 12 Feb Mar Apr May Jun Jul Aug

Middle East $/t

Saudi Arabia 885.00 865.00 815.00 810.00 820.00 910.00 1,040.00 1,180.00 995.00 895.00 765.00 620.00 775.00

Kuwait 885.00 865.00 815.00 810.00 820.00 910.00 1,040.00 1,180.00 995.00 895.00 765.00 620.00 775.00

Mediterranean $/t

Algeria (Sonatrach) 915.00 915.00 865.00 820.00 830.00 910.00 1,005.00 1,110.00 1,005.00 940.00 690.00 590.00 760.00

Spot prices $/t

Large cargo cif ARA 889.05 901.41 841.71 820.68 842.05 948.93 1,002.40 1,029.55 983.84 794.77 601.58 722.55

Large cargo cif Lavera 905.05 919.89 861.60 838.36 865.93 988.36 1,043.55 1,058.14 1,016.11 836.52 620.87 750.23

Large cargo USGC 804.07 845.90 783.62 792.75 893.67 872.35 809.28 na na na na na

Large cargo Japan CFR 908.83 880.09 835.63 862.55 898.52 1,015.21 1,062.14 1,085.91 992.63 850.75 705.33 799.77

Large cargo East China CFR 908.83 880.09 834.43 862.17 896.86 1,015.21 1,062.14 1,085.91 992.63 850.75 704.48 799.77

Large cargo South China CFR 908.83 880.09 833.23 861.93 895.19 1,015.21 1,062.14 1,085.91 992.63 850.75 703.91 799.77

Large cargo Far East Index 908.83 880.09 834.43 862.24 896.86 1,015.21 1,062.14 1,085.91 992.63 850.75 704.62 799.77

Asia spot premiums to CP $/t

Mideast Gulf 1.69 3.07 -1.93 5.38 5.12 -2.37 -35.88 -51.00 -19.95 -14.77 -17.55 14.36

India cfr 27.36 20.73 15.90 46.74 55.67 53.87 1.00 -47.21 38.25 -4.16 4.43 102.18

South China (pressurised) 83.83 88.18 90.65 97.31 101.76 99.45 82.79 53.02 79.43 82.14 93.64 139.64

East China (refrigerated) 28.83 27.14 22.83 51.88 65.71 77.66 4.98 -61.46 17.23 -14.57 -23.76 147.82

South China (refrigerated) 28.83 27.14 21.63 51.64 64.05 77.66 4.98 -61.46 17.23 -14.57 -24.33 147.82

Taiwan 51.02 31.50 35.10 53.69 56.00 54.34 24.33 -5.89 45.75 37.73 36.91 86.34

Japan 51.02 31.50 36.20 53.93 56.86 54.34 24.33 -5.89 45.75 37.73 36.91 86.34

Mont Belvieu ¢/USG

LST 181.49 190.76 176.99 179.01 201.29 196.58 182.65 185.52 178.81 154.77 117.37 123.31

Non-LST 186.20 191.96 180.59 182.37 203.09 197.63 187.64 192.86 191.09 165.05 128.60 133.02

Europe $/t

Coasters fob NWE 816.25 879.30 822.86 785.57 812.30 961.86 965.00 959.57 922.95 737.98 540.87 668.09

Barges fob NWE 864.75 884.80 842.93 800.55 823.25 932.00 955.31 995.27 953.74 759.32 576.82 688.48

Coasters fob Med 955.86 938.59 883.02 904.02 904.13 1,037.14 1,115.00 1,073.75 1,066.05 901.18 674.47 796.27

lpg world - argus media · 7 august 2012 — 2012 ±%

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