LPG consumption in China

The consumption of liquefied petroleum gas (LPG) in China is growing rapidly, mainly fuel consumption. China’s liquefied petroleum gas market started in the 1970s and 1980s, and experienced rapid development in the late 1990s and the beginning of this century. In the past decade, with the advancement of urbanization and the rise of chemical applications, the demand for LPG in the domestic market is increasing day by day. From 2011 to 2018, the annual apparent consumption of LPG increased from 24 million tons to 44 million tons, with an average annual growth rate of more than 9%. However, after 2016, the utilization of LPG in chemical industry is generally saturated, and fuel has gradually become the largest consumption field.

LPG can be used as industrial and civil fuel, as well as an important chemical raw material, widely used in the production of various chemical products. Of the total consumption of 44.02 million tons, 23.53 million tons are fuel consumption, accounting for 53%; and 20.49 million tons are chemical consumption, accounting for 47%.

Fuel is the largest use area of LPG. According to the purpose, it can be further divided into urban civil fuel, industrial fuel, catering fuel and rural fuel. Among them, rural fuel accounts for the largest proportion, reaching 38%; catering fuel is also an important consumption area of LPG, accounting for 34%, which constitutes the main consumption area of LPG in China, and has maintained a rapid growth rate. In addition, industrial fuel and urban resident fuel account for 5% and 23% respectively. With the popularization of pipeline natural gas in China, the substitution of natural gas for LPG of urban residents tends to be stable. The urban residents without pipeline laying conditions constitute a relatively stable consumer group in the urban area, but the overall industrial fuel field has been shrinking due to cost factors.

Rural fuel and catering fuel are rigid demand areas of LPG. In rural areas, due to the impact of environmental protection policies, LPG has become the preferred energy source for “coal to gas” in rural areas because of its cleanness, flexibility, non dependence on pipe network facilities and low-cost supporting. LPG is a clean energy source, and its emissions of sulfide and nitrogen oxide are close to those of natural gas, which are 0.04 and 0.6 of coal. LPG in rural areas can be flexibly distributed to remote areas without relying on large-scale infrastructure investment such as pipelines. In addition, the rural LPG economy is significantly better than natural gas. According to the statistical data of China Urban Gas Association, 60 households per square kilometer is the critical population density of natural gas and LPG economy (with state and local subsidies). The population density of rural areas in China is low. LPG is a good gas source for “coal to gas” and “gasification” in rural areas.

In the field of catering, LPG consumption also keeps increasing. In 2017, LPG consumption in the catering sector was 7.8 million tons, with a steady growth. In recent years, the business income of catering industry in China has maintained a growth rate of more than 10%. Affected by this, LPG consumption in catering industry has maintained a growth rate of 2.26%. According to the survey, the consumption of LPG in catering industry and its proportion in LPG fuel consumption have increased year by year, and now it has exceeded 30%.

From the perspective of consumption regions, domestic LPG consumption regions are concentrated in South China, East China and North China. The total LPG consumption is 30.16 million tons, accounting for 69% of the total. The consumption of LPG fuel in North China is 4.31 million tons, accounting for 31% of the total regional consumption; the consumption of LPG fuel in East China is 4.71 million tons, accounting for 56% of the total regional consumption; the consumption of LPG fuel in South China is 6.58 million tons, accounting for 83%.