Sibur, the largest LPG producer and exporter in Russia, has moved exports to the African, Middle Eastern, and Asian markets over the past three months, according to industry sources.
On February 5, the European Union imposed a ban on the import of Russian-origin petroleum products; however, this ban did not include LPG. To minimize any potential hazard, however, many EU consumers have decreased their LPG imports from Russia.
“The majority of European buyers abandoned Sibur’s LPG, forcing the company to seek alternative distribution routes,” a dealer explained.
Based on ship-tracking data, the company delivered 14%-15% less LPG to EU countries and the United Kingdom in the first quarter of 2023, or 33,000 tonnes, compared to the same period the previous year.
Africa, the Middle East, and Asia and the Pacific received between 85 and 86%, or 192,000 tonnes, of its total shipments of 225,000 tonnes.
In the first three months of 2017, just 18%, or 43,000 tonnes, of the LPG carried from Ust-Luga was sent to countries outside the EU and the UK.
Ship monitoring data demonstrate that due to Sibur’s rerouting of several LPG cargoes from the Amsterdam-Rotterdam-Antwerp (ARA) trading center outside of Europe, the round-trip distance for gas carriers has significantly increased. Three LPG dealers said that Sibur and Trafigura had been transporting LPG beyond the EU on larger vessels to save money on shipping costs.
Since August, ship-tracking information indicates that the company has utilized the Estonian port of Paldiski for ship-to-ship (STS) loadings rather than ports in the ARA region.
LPG merchants claim that Sibur sells its arriving Ust-Luga LPG cargoes to Trafigura, which then reloads the cargo onto MGC or LGC vessels in Paldiski.
In answer to a question, Trafigura stated that the company “continues to interact with clients and governments to comprehend their needs and provide them with the commodities and energy they demand in the midst of highly volatile commodity markets.”
