PetroChina secures long-term LPG deal with Phillips 66

PetroChina International, a subsidiary of state-owned energy company PetroChina, recently signed a long-term LPG procurement agreement with US-based midstream and refining firm Phillips 66.

The deal, finalised by PCI’s Americas branch and Phillips 66 aims to expand PetroChina’s global LPG resource pool and strengthen its chemicals trading capabilities, PCI said, without disclosing further details.

US light hydrocarbon production has surged in recent years, driven by the shale oil and gas revolution, enabling the country to continually increase its export capacity of related products, PCI said.

PCI’s Americas unit has utilised data-driven Trade Mapping methodologies and a centralised global accounting system to secure long-term supply contracts with multiple US exporters, thereby accelerating its LPG shipping operations, the company added.

The two parties discussed enhancing cooperation across energy commodities and aligning US resources with China’s growing petrochemicals demand prior to signing the agreement, according to PCI.

US midstream and refining company Phillips 66 has increasingly targeted Asian markets for LPG and condensate exports as domestic shale output climbs, industrial sources said.

Market participants did not expect the long-term LPG supply agreement between PetroChina and Phillips 66 at a time of intensifying trade conflict. This highlights the pragmatic coordination of economic interests between the two countries, even as broader trade frictions persist, they noted.

The US imposed 20% tariffs on goods from China recently. China retaliated by imposing tariffs of 10%-15% on LNG, coal, crude and agricultural products from the US, but excluded US LPG, Platts reported earlier.

China currently has 32 PDH plants having a combined propylene production capacity of approximately 21.88 million tonnes/year and they require up to 26 million tonnes/year of propane feedstock when operating at full capacity.