MAY 2026
Belgium’s LPG demand and import outlook for 2027 has been revised slightly downward, reflecting delays in key petrochemical capacity additions and a more gradual shift in regional feedstock dynamics. The main reason for this adjustment is the slow ramp up of Borealis’ 480,000 t/y PDH plant in Kallo. The plant is more than 97% complete, with commissioning expected in the second half of 2026. While the facility will eventually boost propane demand by over 575,000 t/y at full capacity, its ramp-up is likely to be slower than previously anticipated.
The revised timeline for Borealis’ PDH plant intersects with developments in the broader European petrochemical production outlook and timeline. Eneos is constructing the 1 MMt/y “Project One” ethylene cracker, designed to utilize imported US ethane. This feedstock is significantly more cost-competitive than naphtha or mixed-feed units, giving the new cracker a competitive advantage over older facilities. Once operational, the cracker is expected to shift production economics in the region, potentially forcing legacy heavy-feed crackers to reduce operating rates. Meanwhile, these older units also produce propylene as a co-product and any reduction in their utilization would tighten propylene supply and, in turn, increase reliance on on-purpose propylene production from PDH units.
However, recent developments have disrupted this anticipated transition. Eneos indicated in a late March investor call that the closure of the Strait of Hormuz has stranded two critical modules for Project One in Abu Dhabi, delaying its commissioning to early 2027. As a result, existing crackers are expected to maintain stable ethylene production levels for longer than previously forecast. This also implies steadier propylene output from co-product streams, delaying the anticipated supply gap that would have supported stronger PDH utilization.
Consequently, the Borealis PDH unit is unlikely to ramp up at an accelerated pace, as originally expected. Compounding this is the current high cost of propane, driven by Middle Eastern supply disruptions. Elevated feedstock prices reduce PDH margins, further discouraging rapid increases in run rates. The current forecast calls for 2026 LPG demand to fall by 2%, to around 7 MMt/y, before rising 7% in 2027 to 7.4 MMt/y. Imports will decline 3% in 2026 to 4.1 MMt/y before rising by 11% in 2027 to 4.6 MMt/y.
This excerpt is taken from Poten’s LPG Market Outlook. Complete the form below to learn more or request a trial.