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China on verge of completing LPG terminal

Published by , Senior Editor
Tanks and Terminals,


China is on the verge of completing a LPG terminal enabling Russia to deliver up to 100 000 bpd of LPG to China, according to ESAI Energy’s newly published ‘Global NGLs Outlook’.

The terminal is the first of several projects paving the way for the extraction of stranded NGLs in East Siberia and delivering them overland to China. The ramifications of this development will be far-reaching, impacting market share in China and demand for very large gas carriers (VLGCs), among other things. North American and Middle Eastern market share in China are in the crosshairs.

The report details the sources of demand and supply underlying the project and provides insight into how quickly this trade will develop. Thanks to the involvement of petrochemical companies, there is a ready market for this LPG. The LPG will be delivered to Northeastern China, including areas where there is a scarcity of LPG. Some supplies will be used as feedstock to produce higher quality gasoline blending components needed to meet increasingly strict specifications. However, there are few ready supply sources to support this new trade. As the report details, the terminal can only expect to lure a small amount of existing production away from producers with established export flows to Europe. The terminal will only see significant traffic when new projects in East Siberia get underway. Consequently, development of this trade will take longer than what is implied by the short-term ambitions of the Manchurian terminal’s developers.

“It is unrealistic to expect Russian producers, which export 150 000 bpd of LPG to Europe, to suddenly shift 50 000 bpd or more to China,” explains ESAI Energy Principal, Andrew Reed. “This trade will not gain much traction until East Siberia’s untapped NGLs are developed. The first of these new NGLs, from Irkutsk Oil Company, will begin to flow in the next year or two. China’s tapping of stranded Russian NGLs will be one of the major developments in the global market, but it will not happen overnight.”

Read the article online at: https://www.tanksterminals.com/storage-tanks/28032018/china-on-verge-of-completing-lpg-terminal/

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