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International LPG markets and LPG pricing outlook

October 2, 2014. Walter M. Hart, Ph.D , P.E., Senior Director +1 832 209 4424 Walt.Hart@ihs.com. International LPG markets and LPG pricing outlook. GLP Forum Mexico Hacienda Galindo Queretaro, Mexico. Agenda. World Supply World Demand World Trade Prices.

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International LPG markets and LPG pricing outlook

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  1. October 2, 2014 Walter M. Hart, Ph.D, P.E., Senior Director +1 832 209 4424 Walt.Hart@ihs.com International LPG markets and LPG pricing outlook GLP Forum Mexico Hacienda Galindo Queretaro, Mexico

  2. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Agenda • World Supply • World Demand • World Trade • Prices

  3. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Global LPG production is growing most rapidly in the US, the Middle East and in Asia

  4. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 LPG production from the Middle East has some uncertainty

  5. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Asia LPG production will be driven by refinery additions in China

  6. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 The US / Canada LPG production increase is driven by shale-sourced gas processing

  7. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Latin America has some promising developments to increase LPG production

  8. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Agenda • World Supply • World Demand • World Trade • Prices

  9. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Global LPG demand growth will continue to be driven by Asia and the Middle East

  10. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Residential / commercial use still claims the largest share of demand by far, but chemicals use will continue to gain share

  11. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 In Asia the residential / commercial LPG markets have gained share in developing markets

  12. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 In the Middle East the impressive growth in residential / commercial LPG markets is eclipsed by dramatic petrochemical feedstocks market growth

  13. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Residential / Commercial LPG demand is declining in the US/ Canada - LPG demand growth will be driven by USGC PDH units

  14. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 US domestic propane demand is not increasing except for the PDH units, so surplus propane must be exported

  15. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Increased gas-sourced isobutane production will reduce the demand for isomerization; increased exports will be needed

  16. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 The Latin America LPG demand growth rate is limited because the dominant end use is residential / commercial

  17. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Agenda • World Supply • World Demand • World Trade • Prices

  18. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 The United States now rivals the world’s largest LPG exporters Source: IHS Energy - Waterborne

  19. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 The US will be the world’s largest LPG exporter

  20. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Most US LPG exports are going to Latin America, but the market is limited… Source: IHS Energy - Waterborne

  21. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Asia will have import growth in all sub-regions

  22. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Agenda • World Supply • World Demand • World Trade • Prices

  23. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 A glut of US ethane has ethane prices following natural gas, but the other US NGLs are still tracking refined products

  24. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Since about 2012, the last significant increment of US LPG exports has been moving to Asia Source: IHS Energy - Waterborne

  25. WORLD LPG MARKET OVERVIEW/ March 2014 LPG competes with refined products in the Asian markets

  26. GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 The arbitrage between Asia and the United States must remain large enough to clear the US LPG markets

  27. Walter M. Hart, Ph.D., P.E. Senior Director, NGL Research & Consulting 1 (832) 209-4424 walt.hart@ihs.com GLOBAL LPG MARKETS & PRICING - OCTOBER 2 2014 Thank You!

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