The increase in global population and income are key drivers to the growing demand for energy. The visible effects of increasing levels of carbon emissions have accelerated the need for cleaner energy. Liquefied Petroleum Gas (LPG) is a clean and modern energy source, and it is used by millions of consumers worldwide. The boom in shale gas extraction has increased the supply of LPG which is used in a range of applications in business, industry, transportation, farming, power generation, cooking, heating and for recreational purposes.
With the world’s population estimated to increase by approximately 1.5 billion people by 2035, energy consumption is estimated to increase by 34% between 2014 and 2035.
CO2 emissions from energy make up approximately two thirds of all global man-made global greenhouse emissions. Energy is primarily used for electricity, heating, agriculture, industry and transportation. It is projected that global CO2 emissions from fossil fuels may be 20% higher in 2035 than in 2014.
Gas has a significantly lower carbon footprint than alternatives like coal and oil and emits virtually no black carbon particles, making it one of nature’s cleanest fuels, much cleaner than coal and oil.
The consumption of gas is expected to rise faster than consumption of any other fossil fuel, reflecting the increase in demand and popularity of gas as an alternative fuel source for many applications.
U.S. Propane is cheaper than Brent crude oil, making it a cost effective solution. With the continued stream of shale gas resources, an established supply chain and market structures, global LPG consumption increased by 4% in 2016 to 293 million metric tonnes, 31% of which is seaborne.
Main trade routes for LPG shipping are out of the Middle East and the U.S. to Asia and Europe. More LPG has been traded due to growing demand in Asia and in the Far East. VLGC tonne mile has been on a general increasing trend.
One of BW LPG’s most recent VLGC newbuilding, BW Malacca, delivered in 2016.
LPG is a highly versatile fuel with applications ranging from cooking fuel, fuel for cars and ships, and feedstock for chemicals and pharmaceuticals. Referred to as one of the world’s most versatile forms of energy, LPG consumption is growing across all sectors as it is increasingly recognised as a clean, modern energy that can meet the demands of a growing global population without compromising our environment.
Cooking for life
60% of all LPG used in Agriculture is used in Canada and US
50% of all LPG used in Domestic applications is used in Asia
68% of all LPG used in South & Central America is used at home, 85% of which is mainly used for cooking
vehicles are powered by autogas, making
most used alternative fuel
The bulk of the global consumption is concentrated in key markets, of which the top 5 countries - South Korea, Turkey, Russia, Thailand and Poland account for 50%
An aerial view of the WAPA power plants in the U.S. Virgin Islandsv
In a first project of its kind, the U.S. Virgin Islands Water and Power Authority (WAPA) has turned to LPG for electrical power generation. This reduces costs while providing power and water for the U.S. Virgin Islands. In partnership with Vitol, BW LPG is playing a pivotal role in this project with its Very Large Gas Carrier (VLGC), Berge Summit.
The closure of the Hovensa Refinery in the U.S. Virgin Islands in 2012 andrising fuel prices led WAPA to search for alternative sources of fuel. LPG was chosen as the best suited solution. In July 2013, Vitol was selected as the project partner for infrastructure upgrades and supplying LPG to the power plants.
BW LPG’s Berge Summit serves as a floating storage for the propane which will be supplied to the power plants on St. Croix and St. Thomas islands. It conducts multiple ship to ship operations a week with small tankers, which delivers the propane to the power plants.
The National Renewable Energy has assessed a 60% reduction in fossil fuel and a 30% reduction in fuel costs in the U.S. Virgin Islands by 2025. This conversion to LPG represents the best possible near term project as a way to reduce costs for power generation.
BW LPG’s Berge Summit moored off the U.S. Virgin Islands
“One of the
challenges of this
project was to build
a storage facility
in these islands to
allow a constant
supply of LPG to the
islands. A floating
solved that issue
and we chose BW
its expertise in the
Chartering Manager, Vitol
With the International Maritime Organisation’s (IMO) push to cap sulphur content of marine fuels at 0.5% by 2020, LPG is increasingly being considered as a viable alternative for marine fuel over LNG and heavy fuel oil (HFO). With the continued supply of shale gas resources and an established infrastructure in place, LPG is poised to be a serious alternative to marine fuel.