The First Part on the Composition Changes of Civil Liquefied Gas – A Surge in Propane Usage

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Since 2011, China’s annual propane production has remained around 2 million tons, with little significant fluctuation. In contrast, imports of propane have increased year by year starting in 2012; the increase was modest in 2013, but there was a sharp rise in 2014 and 2015. The year-on-year increase in 2014 was 93.66%, and by the end of September 2015, the increase compared to the entire year of 2014 was 27.80%. As the opportunities in the deep processing of olefins have been largely exhausted, greater attention is being paid to the deep processing of alkanes. Among these, propylene production via propane dehydration (referred to as “PDH”) has received the most attention; 2014 was indeed a year of rapid development in PDH processing. As a raw material for PDH, the usage of propane has increased significantly. In China, due to the scattered distribution of propane manufacturers and the relatively small production volume of each one, it is difficult for PDH processing plants to obtain this material. Meanwhile, PDH units generally have large processing capacities; those currently in operation mostly have a capacity of 450,000 tons or 600,000 tons. Based on the trends in the development of propane, the amount of propane used in domestic applications is likely to remain relatively stable. The large increase in imported propane should flow into PDH units, yet the actual amount of imported propane that reaches these units is significantly less than expected. According to Zhuochuang Information, the total production capacity of PDH plants that are currently in operation is 3.56 million tons. As of the end of September, 6.0741 million tons of propane had been imported. Assuming full operational capacity of these plants, up to 2.67 million tons of this propane would be used for PDH production, with the remaining amount going to the domestic consumer market. However, the three new units put into operation in 2015 were all commissioned in the second half of the year, and not all PDH units were operating at full capacity; as a result, the amount of propane imported for the domestic market was significantly higher than 3.4 million tons. Based on past observations of propane imports, levels around 2 million tons have persisted for a relatively long time, representing the historical balance point for imports. However, starting in 2014, an increasing amount of propane flowed into the consumer market. Analysis of civilian liquefied gas usage shows that the development of processes for the deep processing of alkanes, such as isobutane dehydrogenation and n-butane isomerization, is the main reason behind the rise in propane consumption by end-users in the civilian sector. Before 2013, the main components of liquefied gas for domestic use were n-butane, isobutane, and propane. As deeper processing of alkanes progressed, more and more n-butane and isobutane entered the industrial market, resulting in a decreasing supply of liquefied gas for domestic use. Coincidentally, a significant increase in imports of propane compensated for this reduction in liquefied gas resources available for domestic use.