Northeast China LPG Supply to Rise with Russian Project Start
According to sources, the construction of the AGCC project at Sibur has started. Moreover, sources say that the construction of the project will be completed in 2024, and the project will be put into operation in 2025. Therein, the PE and PP capacity is 2,300kt/a and 400kt/a respectively. According to Sibur, the capacity of the steam cracker will be the largest in the world, and its feedstock is ethane and LPG. Therein, it is estimated that the annual output of ethane and LPG will be 2,000kt and 1,500kt respectively.
Accordingly, it is estimated that the LPG supply in Northeast China will rise greatly before the cracking project to be put into operation. Meanwhile, the company will supply 40 billion cbm of natural gas to China, weighing down the consumption of LPG in the civil-use gas market. Accordingly, the demand for LPG will greatly weaken. Currently, the LPG price in Northeast China is relatively low in response to the tight supply, so it is estimated that refineries in Russia may export LPG to China for arbitrage. On the whole, SCI reckons that the LPG supply will become surplus due to the project in Russia.
