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Issues archive
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Review of Russian LPG MarketLiquefied petroleum gas (LPG) includes propane, butane and their mixtures, such as technical propane-butane mix, propane-propylene fraction (PPF), propane-butane-propylene fraction (PBPF), autogas and butane-butylene fraction (BBF). In 2009 the manufacture of LPG in Russia made up 11.051m tonnes, up 10% compared to 2008. Many experts have repeatedly claimed a necessity to invest funds into the diversification of the manufacture of high conversion products oriented towards the domestic market. However, the commission of capacities converting LPG into petrochemicals will be inappropriate in the coming years with a moderate development of the home demand and market for these products. In such circumstances one should draw the experience of the foreign manufacture and investment practices based on a strategy of separation of investment projects in time for the gradual development of advanced production. First of all, the investor focuses on establishing capacity for the processing of hydrocarbon raw materials (associated gas, natural gas or gas condensate) and LPG manufacture. At this stage, companies export LPG and raw materials. The capital is accumulating gradually and they make investments into the construction of higher conversion plants to obtain gas and petrochemical products. The investments are then used to found plants converting gas and petrochemical products into the end consumer goods through the creation of clusters of processors consisting of small and medium businesses. Throughout all stages of hydrocarbons conversion development, there is a progressive advance of the domestic market and the demand for consumer and industrial gas and petrochemical products.
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