Global Liquefied Petroleum Gas (LPG) Market Overview, 2024-29

Market Dynamic

Market Drivers • Energy transition initiatives: One of the key drivers of the global liquefied petroleum gas (LPG) market is the growing focus on energy transition programs around the world. As governments work to reduce their carbon footprint and shift to cleaner energy sources, LPG emerges as a preferred option because of its lower greenhouse gas emissions than traditional fossil fuels. Government rules, international agreements, and sustainability goals encourage the use of LPG as a cleaner-burning alternative for residential, commercial, and industrial applications, resulting in increased market growth and demand. • Industrial expansion and petrochemical demand: The global LPG market is driven by an expanding industrial sector and rising demand for petrochemical feedstocks. LPG is a critical feedstock for many petrochemical operations, including the manufacturing of plastics, chemicals, and fertilizers. As industrial operations spread across regions, so does demand for LPG, resulting in market expansion. Furthermore, LPG's adaptability and compatibility with industrial processes make it a popular choice for industrial heating, drying, and power generation applications, which contributes to its market demand and growth. Market Challenges • Infrastructure constraints: One of the most significant issues confronting the global Liquefied Petroleum Gas (LPG) business is a lack of infrastructure, which includes storage facilities, distribution networks, and transport systems. Inadequate infrastructure restricts the effective supply and distribution of LPG, particularly in distant or underserved areas, resulting in supply shortages, logistical bottlenecks, and higher costs. In order to maintain reliable LPG availability for consumer’s worldwide, significant investment in building and updating storage terminals, expanding distribution networks, and improving transportation infrastructure is required. • Regulatory complexity: The regulatory frameworks governing the LPG industry differ greatly across countries and regions, making compliance, licensing, and safety criteria difficult for market participants to meet. Diverse regulatory requirements increase administrative burdens, complicate cross-border trade, and impede market harmonization attempts. Streamlining regulations, encouraging standardization, and improving regulatory coordination are critical for creating a favorable business environment and ensuring the smooth operation of the global LPG market. Market Trends • Growing demand for residential applications: The rising demand for residential applications, particularly in cities and off-grid settlements, is a prominent trend in the global liquefied petroleum gas (LPG) market. With increasing urbanization and family incomes, more people are turning to LPG as a clean and convenient fuel for cooking, heating, and water heating. This movement is motivated by a desire to improve domestic air quality, energy efficiency, and convenience. Governments and energy providers are responding to this trend by providing subsidies, raising awareness, and launching infrastructure development projects. • Shift towards autogas and transportation: A major market trend is the increasing use of LPG as a transportation fuel, particularly in the form of autogas for vehicles. With rising concerns about air pollution and greenhouse gas emissions, many countries are pushing the use of cleaner fuels such as LPG to reduce automotive emissions and enhance air quality. Autogas is a cheaper and more environmentally friendly alternative to gasoline and diesel, emitting less particulate matter and nitrogen oxides. This trend is pushing investments in LPG refuelling infrastructure, fleet conversions, and government policies that promote the transportation industry's move to alternate fuels.

Key Development

• On March 16, 2023, ExxonMobil announced the successful completion of its Beaumont refinery expansion project, which will add 250,000 barrels per day of capacity to one of the largest refining and petrochemical complexes on the United States Gulf Coast. The company's rising crude production in the Permian Basin, along with the largest refinery expansion in more than ten years, will help meet the rising demand for affordable, dependable energy. • On April 18, 2023, Shell U.K. Ltd, a Shell plc subsidiary, upgraded the Pierce field in the UK Central North Sea to enable gas production after the field had previously produced only oil for many years. As a result, field operations have now resumed in full. Pierce is a joint venture between Shell Companies (92.52 %operator) and Ithaca Energy (UK) Limited (7.48 %.).