LPG & Ethane Market Coverage

Our LPG and ethane coverage delivers short-, medium-, and long-term analysis of the key fundamental drivers in the global markets, including supply, demand, trade, shipping and pricing.

We utilize a country-level, bottom-up approach to develop a regional and global understanding of supply, demand and trade dynamics. Our in-depth models take into consideration price-elastic demand areas, such consumption in the residential commercial sector and petrochemical demand from both swing steam crackers and PDHs.

On the supply side, we play close attention to upstream associated and non-associated gas production across key regions and their dynamics impacting NGLs and LPG production. This taps onto FGE’s capabilities and expertise in the Middle East and overall crude and gas/LNG markets to provide a holistic view on NGLs availability out of producing regions in the short, medium and long term.

In the LPG space, availability from the Middle East is a key area of focus – with crude production levels and non-associated gas developments key drivers of production going forward. Within the US markets, the trajectory on shale production alongside midstream developments will set the tone for US export potential.

With these, we can assess and forecast the dynamics around the LPG deficit in Asia Pacific (as well as other regions) and how they pull on Middle East and US LPG export supplies. Alongside a holistic view on shipping balances and freight, these dynamics shape our view on prices and the regional arbitrages going forward.

On the data side we provide detailed projections of LPG supply, demand, trade and prices/spreads that are based on our own assessments of key drivers within the market. We model major countries’ balances by the different sectors in the market, taking into account seasonality, trends and correlations.

To complement our understanding of upstream production and supplies from the refinery, we leverage on the research from our oil and gas teams at FGE to form a holistic view of the LPG market.

We also maintain a database of key infrastructure and petrochemical projects with a firm understanding of how these projects may impact the tradeable market. This spans across both our the medium- and long- term coverage.

To complement our research, we also utilise raw data from third party sources to aid with our modelling. This adds further depth to the modelling of the market, which brings greater insights into our analyses.

Finally, we have a freight model which calculates the tonne-mile demand required to transport LPG cargoes across various shipping routes. This feeds directly into our shipping market view, taking into account the changes in tonnage demand and supply.

For Ethane, there is a close synergy with LPG modelling as ethane production comes directly from Gas Processing Plants and fractionators. With our already strong understanding of the global petrochemical market, we are able to model ethane demand globally, which feeds directly into our monthly and annual demand and supply model balances.

We also have a firm understanding of the Very Large Ethane Carrier (VLEC) market, the workhorse of the international ethane trade. We maintain databases of VLEC orderbooks and vessel fleet which complements our understanding of the global ethane market.

As part of our LPG & Ethane market coverage, clients will receive regular reports and/or alerts in email or PDF format, regularly updated Excel data sets, direct access to our online client portal, contact with our expert consultants/analysts via email/conference-call/telephone/in-person meetings, invites to complementary market update webinars and ongoing consultations with key members of our NGLs team.