Petrochina International, a subsidiary of a state -owned energy company Petrochina, signed a long -term LPG procurement agreement with Phillips 66 based in the US, PCI announced on its Wechat official account March 14.
The agreement, which was completed by PCI’s Americas Branch and Phillips 66 on March 11 in Houston, aimed to expand the Global Petrochina LPG resource collection and strengthen chemical trade capabilities, PCI said, without expressing further details.
The production of light US hydrocarbons has jumped in recent years, driven by the oil and gas revolution, allowing the state to continue to increase the export capacity of related product, PCI said.
The American PCI unit has used the data -based trading mapping methodology and a centralized global accounting system to secure long -term supply contracts with many US exporters, thus accelerating LPG shipping operations, added the company.
Both parties discussed the increase in cooperation in all energy commodities and harmonized US resources with the greater request of Chinese petrochemicals before signing the agreement, according to PCI.
The US Phillips 66 midstream and purification company has increasingly targeted the Asian market for LPG and condensate exports as a climb of domestic selery output, said Industrial Sources.
Trading LPG As-China
Market participants do not expect a long -term LPG supply agreement between Petrochina and Phillips 66 when intensifying trade conflicts. This highlights the pragmatic coordination of economic interests between the two countries, even when broader trade friction remains, they said.
The US applies 20% of goods tariffs from China on February 4 and March 4, respectively. China replied by imposing a 10% -15% tariff on LNG, coal, raw and agricultural products from the US, but not including US LPG, platts were reported before.
The US is the largest propane supplier to China, accounts for 59% of the total propane imports of 28.89 million MT in 2024, according to data from China Customs. On March 14, China has not imposed retaliation rates on US propane, because any tariff can disrupt the supply chain of the Chinese propane dehydrogenation factory. The US Propana share was only 11% in 2018, when China applied a 25% retaliation tariff on US Propana, which led to the suspension of US Propana imports which was almost complete in 2019.
China currently has 32 PDH factories that have a combined propylene production capacity of around 21.88 million MT/year and they need up to 26 million MT/year raw materials for propane while operating at full capacity.
Source: Platts
