U.S. shale gas bonanza to spur China fuel trade growth
The mainland's imports of propane, butane and isobutene jumped 23pc on year in August
US exports of natural gas liquids, already at a record amid surging output from shale deposits, are poised to quadruple by 2020 as the expansion of the Panama Canal cuts shipping costs to Asia.
Deliveries of the fuels to foreign buyers averaged 555,000 barrels a day in July, the most in US government data going back to 1981. China's imports of propane, butane and isobutane, with uses as varied as home heating, chemical manufacturing and refrigeration, jumped 23 per cent in August from a year earlier, customs data show.
The Panama Canal expansion, slated for completion in 2015, will allow the transit of large tankers and put costs to ship US gas liquids to Asia on a par with deliveries from the Middle East, according to Sanford C. Bernstein & Co.
US exports would jump to 20 million metric tons by 2020 from the current 5 million tons, making the country the world's largest exporter of those fuels, ahead of Qatar and Saudi Arabia, Bernstein said.
"The Panama Canal widening is definitely a positive for propane and butane producers in the US who want to get rid of product," Bradley Olsen, director of midstream research at Tudor, Pickering, Holt & Co in Houston, said in an phone interview last week.
"We're going to be in a situation where the US is effectively increasing supply on the global market by about 30 per cent in the course of three or four years."