01.02.2016
Kazakhstan
Sector: LPG

Kazakhstan limits LPG exports to Europe

Kazakhstan is a major supplier of LPG to Europe. However, in 2015 the country exported less fuel to the Old Continent than in previous years, instead focusing on Asian markets. What does it mean to drivers of autogas-powered cars?
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LPG rail tankers coming from Kazakhstan© Tengizchevroil0,018 million tonnes is not a remarkable drop, but if the tendency proves constant, the import structure of the European market will eventually have to change

Given the dropping average autogas prices across Europe, the shift in Kazakhstan's export priorities apparently have no impact on the market – what has been lost here has been compensated somewhere else and situation is as stable as ever. But the fact remains that fewer rail tankers filled with LPG labeled "made in Kazakhstan" reached the Old Continent in 2015 than in 2014.

Why so? Primarily because fuels – including LPG – are becoming cheaper all over the world. Oil prices have fallen from over 120 dollars a barrel to around 30 dollars a barrel and natural gas, from whose deposits roughly 50 percent of global LPG is produced, is also considerably less expensive than it used to be, in no small part due to the North American shale gas revolution. Additionally, sales margins in Europe are low, which means it doesn't pay as well as it used to export liquefied gas there.

Instead, Kazakhstani suppliers turned their attention and efforts towards Central Asian markets, including Pakistan, Tajikistan and Afghanistan (export to the latter country grew from 26 thousand tonnes in 2014 to over 109 thousand tonnes in 2015), as well as Turkey (up from 52 to 91 thousand tonnes between 2014 and 2015). Overall LPG production in Kazakhstan rose from 2,464 to 2,536 million tonnes.

The scale of European drop in imports from Kazakhstan isn't exactly substantial – down from 1,92 million tonnes in 2014 to 1,902 million tonnes in 2015. A reduction in exports to Eastern Europe and the Mediterranean region is more significant – from 1,484 to 1,337 million tonnes. It remains to be seen if these tendencies continue in 2016.



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Robert Markowski
source: Thomson Reuters



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