Asian countries to see LPG shortages in short-term: Analysts<\/p>\n
SINGAPORE (Reuters): Asia is likely to face a shortage of
\nliquefied petroleum gas (LPG) in the next two to three years with
\nsuppliers unable to meet soaring demand from industrializing
\ncountries, analysts and industry sources say.<\/p>\n
As economic expansion continues in the region, more and more
\npeople are expected to use LPG for cooking or motor fuel, and
\nconsumption as an industrial feedstock is also predicted to rise.<\/p>\n
High-growth buyers such as China and India will be forced to
\nseek out new supply sources and pay higher prices to cover demand
\nas traditional suppliers -- Australia, Indonesia and Malaysia --
\nscramble to cope with rising consumption, analysts say.<\/p>\n
In the longer term, the regional demand-supply balance will
\ndepend on how fast current net LPG importers meet expectations to
\ndevelop their industries to become exporters.<\/p>\n
\"While we expect countries east of the Suez to be net
\nimporters of LPG in the short term, more countries will become
\nnet exporters by 2005,\" a Hong Kong-based analyst said.<\/p>\n
Industry players will discuss tapping new market opportunities
\nin Indochina and South Asia and changes in supplies from the
\nMiddle East, the world's largest LPG producing area, when they
\nmeet next week in Ho Chi Minh, Vietnam for the 8th Asia LPG
\nForum.<\/p>\n
According to energy consultants Purvin & Gertz Inc., Asian LPG
\ndemand is expected to exceed 45 million tonnes in 2005, up from
\nabout 40 million tonnes in 2000.<\/p>\n
China is forecast to account for the lion's share of growth
\nwith LPG demand projected to increase to about 8 million tonnes
\nby 2005 due to rapid economic expansion and the gradual phasing
\nout of coal use.<\/p>\n
Chinese LPG consumption was 5.6 million tonnes in 1999.
\nIn India, LPG requirements are projected to breach three million
\ntonnes in the next five years as domestic and commercial
\nconsumption increases.<\/p>\n
A major chunk of India's LPG demand growth could come from the
\ntransport sector. The Indian parliament recently passed an
\namendment to the Motor Vehicles Act which allows LPG to be used
\nas motor fuel.<\/p>\n
LPG offers substantial cost savings over gasoline and industry
\nsources say that Indian LPG consumption in the transport sector
\ncould skyrocket once other hurdles such as specification and
\ndesign and testing of LPG tanks are cleared.<\/p>\n
Several Asian countries are expected to switch in the next few
\nyears from net LPG importers to exporter status. This will lead
\nto a major shift in trading patterns, analysts say.<\/p>\n
According to Purvin & Gertz, Thailand and Vietnam will become
\nLPG exporters by 2005 to join Malaysia and Indonesia as key LPG
\nsuppliers in Southeast Asia.<\/p>\n
In Northeast Asia, Taiwan is expected to become a net exporter
\nwithin the next five years.<\/p>\n
A Taiwanese refiner said that Taiwanese LPG producers will be
\nforced to seek overseas markets due to a domestic supply overhang
\nbrought on by the deregulation LPG imports in 1999.<\/p>\n
A slow down in local demand growth had exacerbated the
\noverhang, he said.<\/p>\n
By the year 2001, Taiwan's total LPG supply is expected to
\nreach 2.86 million tonnes, more than one million tonnes over
\nforecast domestic demand of 1.55 million tonnes, the source said.<\/p>\n
He added that much of the incremental supply will be exported
\nto China through traders.<\/p>",
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