Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to the Kommersant newspaper about the production of LPG in Russia.
According to Rosstat, in five months of 2022, 8.73 billion cubic meters of APG were flared in Russia (plus 23% year-on-year), Sergey Kondratiev says. The main reason was the increase in flaring at new fields in Eastern Siberia (plus 1.12 billion cubic meters), while the volume of APG flared in Western Siberia and the Urals-Volga region, where large LPG producers are located, remained practically unchanged (plus 1.8% year-on-year).
For the year as a whole, Sergey Kondratiev expects APG flaring to grow by 13.7% to 21.38 billion cubic meters, mainly due to Eastern Siberia. In his opinion, the problem of excessive APG flaring is relevant only for individual subsoil users and is not directly related to the situation in the LPG markets. The expert agrees that problems with exports put pressure on the market, and this is also shown by price dynamics in the domestic market. In 2021, LPG rail exports alone, according to Argus, amounted to 3.8 million tons, with Poland the largest market (0.95 million tons). Sergei Kondratiev expects LPG exports to decline by 28–30% in 2022. Part of the volumes will be used in the domestic market as automotive fuel, while demand from the petrochemical industry is unlikely to increase significantly.
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