PetroChina International, a subsidiary of state-owned energy company PetroChina, signed a long-term LPG procurement agreement with US-based Phillips 66, PCI announced on its official WeChat account March 14.
The deal, finalized by PCI’s Americas branch and Phillips 66 on March 11 in Houston, 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 utilized data-driven Trade Mapping methodologies and a centralized 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.
US-China LPG trade
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 on Feb. 4 and March 4, respectively. 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.
The US is the largest supplier of propane to China, accounting for 59% of its total propane imports of 28.89 million mt in 2024, according to data from Chinese customs. As of March 14, China has not imposed any retaliatory tariff on US propane, as any tariff could disrupt the supply chain of Chinese propane dehydrogenation plants. The share of US propane was only 11% in 2018, when China implemented a 25% retaliatory tariff on US propane, leading to an almost complete suspension of US propane imports in 2019.
China currently has 32 PDH plants having a combined propylene production capacity of approximately 21.88 million mt/year and they require up to 26 million mt/year of propane feedstock when operating at full capacity.
Source: Platts
