LPG / NGL
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Review delays Brazil's LPG assistance program
Review delays Brazil's LPG assistance program
Sao Paulo, 11 November (Argus) — Brazil's lower house has removed a proposed LPG assistance program from its urgent voting schedule, submitting it to further review and revisions. The program announced in August is still under deliberation, but officials now expect further revisions before it moves forward and launches on 1 January. The bill may add new controls to avoid fraud, the mines and energy ministry's petroleum, natural gas and biofuels secretary Pietro Mendes said last week during a debate in the lower house about LPG. Congressman Hugo Leal, the bill's overseer, told Argus that he will propose creating LPG cylinders smaller than the typical household 13kg models to ease access for low-income families. Low-income families spend 70pc of their resources on housing and groceries, according to Carlos Ragazzo, a researcher at the Getulio Vargas Foundation. That suggests that the current government financial support has likely been used for monthly expenses rather than substituting firewood usage for cooking with LPG. Consumption of firewood for cooking fell from 2005-2015 (see chart) , thanks to improved economic conditions throughout the country, according to energy research firm EPE. But the share of households that use firewood for cooking has hovered around 25pc since 2015, even after the launch of program to promote LPG cooking use in 2021 to help those families during the Covid-19 pandemic. Leal met with lower house leader Arthur Lira on 5 November to discuss the program's proposals and voting agenda, but no details have emerged since. Almost 1mn Brazilian households cook with biomass only. That represents 1.1pc of the 12.7mn households that use biomass for any energy need. Additionally, 56pc of the biomass-only households are low-income families. A 13kg LPG cylinder in Brazil costs R106.63 ($18.49), on average. That represents 7pc of Brazil's minimum wage. Low-income families usually receive only half of the minimum wage, on average. By Betina Moura Brazil residential energy sources Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Poland's Azoty ramps up PDH/PP operations at Police
Poland's Azoty ramps up PDH/PP operations at Police
Warsaw, 8 November (Argus) — Polish chemical conglomerate Grupa Azoty said it is making progress in ramping up production at its new 437,000 t/yr propane dehydrogenation (PDH) and 429,000 t/yr polypropylene (PP) complex in Police, although it needs time to stabilise output and ascertain the unit's economic feasibility. Azoty said both units are operating even though formal commissioning of the entire project has not yet been yet completed. It is in negotiations with the contractor to undertake final improvements and overcome some defects, it said. Azoty expects to agree with the contractor on final terms of commissioning by the end of this year. Since the start of its operations, the PP plant has produced more than 200,000t and sales of PP reached 60,000t in the third quarter, Azoty said. Azoty sees healthy demand for its PP products from European buyers that want to diversify their supply portfolio to reduce risk in delays to imports from Asia-Pacific. "We see end users want have at least 30pc of their (PP) supplies to come from local European supplies," said plant manager Andrzej Dawidowski. He said the company sells PP through its own distribution as well as through traders that market in Europe and elsewhere. Azoty expects to make adjustments to this model as soon as it stabilises output, which would enable buyers to determine their demand for Azoty's product. Azoty said the Police plant is yet to generate positive earnings, and it requires stable supplies of feedstock propane. It said it is working with suppliers to secure financing to ensure steady propane supplies. Azoty also said the letter of intent with Polish integrated Orlen, about a possible sale of a stake in the PDH/PP project was extended until end of 2024, giving them more time to discuss the possibility of co-operation. By Tomasz Stepien Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Gatun Lake to reach all-time high in Dec: Panama Canal
Gatun Lake to reach all-time high in Dec: Panama Canal
London, 8 November (Argus) — Water levels at Gatun Lake that supplies the Panama Canal will reach an all-time high in December, according to forecasts from the Panama Canal Authority (ACP). This is a significant shift from the start of the year, when water levels were at the lowest January level since 1965 following an extensive El Nino induced-drought in 2023 ( see chart ). ACP expects water levels at the lake to hit 88.9ft on 7 December and then 89ft on 18 December, which if confirmed would break the 88.85ft record registered on 5 December 2022. This time last year water levels were in an 80-82ft range, the lowest on record for the November-December months, which prompted ACP to enforce rigorous transit restrictions that sent shockwaves through LPG and other shipping markets . The change in water levels reflects the transition from El Nino to La Nina, which typically brings more rainfall to Panama. Higher water levels from the onset of the rainy season in May allowed the ACP to gradually lift transits back to full capacity by August . This has helped keep auction prices for transits at the larger Neopanamax locks near initial $100,000 bidding levels — and even outpace demand, with many slots turned away without receiving any bids . Argus ' average weekly auction prices have ranged from $112,900 to $209,389 since July, settling at $136,750 by last week. This is a complete turnaround from a year earlier, when shippers paid as high as nearly $4mn for a single transit. On average, Neopanamax auction prices cost $2.1mn in November 2023. This probably helped support Panama Canal's profits in its financial 2024 year, to $3.45bn from $3.2bn a year earlier despite a 20pc fall in transits because of water-saving restrictions implemented. The ACP said the results reflected strategies such as the "freshwater surcharge, improved water yield through structural and operational upgrades, system enhancements for reservations and auctions, and maritime service operations." Water levels are forecast to gradually decrease again from 23 December with the start of the dry season, which usually lasts by May. By Yohanna Pinheiro Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Polish LPG market braces for Russian import ban
Polish LPG market braces for Russian import ban
The industry hopes to avoid shortages caused by logistical bottlenecks, but fears the long-term impact of the embargo, writes Waldemar Jaszczyk London, 5 November (Argus) — A sober mood has taken hold of the Polish LPG industry as it grapples with the ramifications of losing its largest supplier, with the EU's ban on imports of Russian LPG fast approaching. The first point of call for buyers are the country's three Baltic Sea terminals, which have been responsible for the bulk of the recent drive to diversify supply. Seaborne LPG imports to Poland reached a record high of 1mn t in 2023, up by more than half from pre-Ukraine war levels. Next year, the terminals could increase intake to more than 1.2mn t/yr, Polish distributor Gaspol's public affairs manager Mateusz Kedzierski says. The company owns the country's largest seaborne terminal, the 900,000 t/yr Gdansk facility, and ended purchases from Russia in 2022. Imports will be boosted by the expansion of Polish refiner Orlen's Szczecin terminal to 400,000 t/yr from 250,000 t/yr. But the facility, still under renovation, has only recently begun operating on a part-time basis and will not reach capacity until the second quarter of 2025, an industry executive says. Other distributors are rushing to secure access to the only remaining depot — the 420,000 t/yr Gdynia terminal — with its operator, Alpetrol, recently signing long-term transloading contracts with domestic LPG companies Barter and Polski Gaz. Importers hope to avoid the logistical issues that haunted the market in 2022 when LPG struggled for rail access to the ports that prioritised coal. Kedzierski says product shortages are not expected following the embargo. Securing rail supplies from the Amsterdam-Rotterdam-Antwerp (ARA) hub may be trickier. The German railway network is less congested now owing to a stagnating economy and declines in manufacturing, but any substantial increase in usage will affect the Polish market's logistics, Polish LPG association PIGP president Pawel Bielski says. A €40bn ($43bn) maintenance and modernisation programme being undertaken by state-owned rail operator Deutsche Bahn (DB) will also weigh heavily on rail network availability for Polish importers. Only recently, two out of six rail border crossings with Germany were blocked for a week after a train derailment at one coincided with the launch of modernisation works at the other. Go west The availability of LPG railcars in Poland has improved markedly, with market participants expanding their fleets in preparation for the shift west. But this was achieved through renovation of old railcars to make them suitable for western routes, with logistics companies cutting investment in new vehicles given the uncertain future of fossil fuels in Europe, tanks producer Chemet's vice-president Piotr Frycz says. This availability might not last long as rail imports from northwest Europe could more than double to almost 1mn t/yr after the embargo, requiring anywhere between 384 and 588 additional LPG railcars, Rail Cargo Logistics sales manager Piotr Ulko says. Higher demand will increase logistical costs for ARA rail transit by at least 10pc, according to an importer. Another problem is that propane-butane mix, a key import from Russia needed for autogas, is not commonly sold in northwest Europe. But the main challenge remains the lack of alternative inland import infrastructure to the rail terminals on Poland's eastern border. The only project under way is Barter's 400,000 t/yr rail terminal in Slawkow, due to start up in the first quarter of 2025. Interest has emerged in developing "pocket terminals" with 2,000-10,000t capacities that only take 9-12 months to construct, Frycz says. Chemet recently completed one such project in Norway and is in talks with a few parties in Poland, but no final decisions have been made. Delays in processing environmental permits from local authorities continue to stall progress despite the government's promise to simplify procedures. The shift to imports from northwest Europe will inevitably result in higher domestic prices, with Poland's 2mn t/yr autogas market likely to bear the brunt. Propane-butane mix railcar prices on the border with Belarus averaged $488/t daf Brest in January-October — more than $135/t cheaper than ARA railcars. The market has already had a taste of the future after Russian LPG rail imports shrunk by almost 25pc on the year to 150,000t in the third quarter. Poor domestic demand partially offset the drop, but autogas prices still firmed to a six-month high. The impact on demand is uncertain. Autogas prices are historically low against other fuels, and even a rise to a 60pc price ratio to gasoline from 46pc in 2023 will not affect demand, Kedzierski says. Others have longer-term fears, with the industry risking an outflow of new clients converting vehicles to LPG, given lower competitiveness. The full impact of the embargo may not be felt until 2027, Bielski says. Poland sea LPG imports by origin Poland LPG infrastructure Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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