LPG market in the 1st half of 2023
11.9.2023
Data from the LPG market for the 1st half of 2023 illustrate the development of trends that began a year ago: an avalanche increase in the re-export of liquefied gas to Ukraine and the continued strong position of Russian gas.
In the first half of 2023, global LPG consumption in Poland decreased by 2.3% compared to the same period a year earlier, to the level of 1192 thousand tons. This was primarily the result of mild winter and lower heat demand, as well as conscious efforts to reduce energy consumption. In the same period, imports increased by almost 9% - the surplus goes to exports.
LPG exports doubled from 167 thousand to 324 thousand tons in the first half of the year; this is already 21% of the Polish market. 61% of this quantity (nearly 200 thousand tons) goes to Ukraine, which in 2022 became the largest recipient of re-exported LPG.
It is worth emphasizing that easily transportable liquefied gas supplied to Ukraine primarily from the Polish direction, plays a fundamental role in the current Ukrainian energy mix. According to the Ukrainian Liquefied Gas Association, private customers in cities and the armed forces are currently the largest consumer of LPG in Ukraine. Compared to 2021 imports to Ukraine LPG in cylinders increased 6-fold in 2022, as liquefied gas has become a key energy carrier in heating and cooking.
The supply structure of the Polish market does not undergo fundamental changes: production amounted to 228 thousand tons, which covers 15% of demand, the rest is imports. The largest supplier remained Russia, whose share of the import structure increased slightly from 48.7% to 50.1%. The continued strong position of Russian supplies is due to three elements: logistics connections and the availability of terminals on the eastern border, competitive prices (on average 1/6 lower in 2023 than from alternative routes) and the dominant role of autogas in the Polish LPG market, which means stable demand for the Russian mixture.
The share of deliveries from Sweden decreased in 2023 compared to the same period of the previous year from 31% to 22%, while the role of other suppliers - in particular the Netherlands (4.6%), the UK, is consistently strengthened. Britain (4.6%) and Kazakhstan (4.5%). Sweden's share of supplies to the Polish market reached historic highs first in May and then in November 2022, when it approached the level of 100,000 tonnes.
While LPG deliveries from Russia showed a decreasing trend in the first half of 2022, from autumn to the end of the heating season they increased again, peaking in March 2023, when nearly 140,000 tons of raw material were imported to Poland. A significant part of the raw material from Russia was re-exported by Poland to Ukraine. The second half of the year will verify the effectiveness of the May decree of President Zelensky, banning the import into Ukraine of hydrocarbons from the territory of the Russian Federation.
In the first half of 2023, deliveries by rail traditionally dominated. 53.2% of LPG went to Poland by rail, compared to 34.6% by sea and 8.6% by road. These proportions are unchanged from the previous year.
