Russia’s Sibur Shifts LPG exports to Africa, the Middle East, and Asia as EU Cuts Buying

Industry insiders report that Sibur, Russia’s largest producer and exporter of liquefied petroleum gas (LPG), has shifted its export focus to Africa, the Middle East, and Asia over the last three months.

On February 5th, the European Union enforced a ban on importing petroleum products from Russia; however, it did not include liquefied petroleum gas (LPG). And to avoid potential risks, numerous buyers in the European Union decreased their purchases of LPG from Russia.

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One source noted to Reuters News, “Most buyers in Europe abandoned Sibur’s LPG, so the company was forced to look for new distribution channels.”

According to ship-tracking data analyzed by Reuters, the company’s LPG shipments from Russia’s Ust-Luga port to EU nations and the UK dwindled to 14-15% of the total, or 33,000 tonnes, in the first quarter of 2023. This represents a significant decline compared to the 194,000 tonnes, or 82%, delivered during the same period the previous year. In contrast, the company’s total shipments of 225,000 tonnes were primarily delivered to Africa, the Middle East, and Asia-Pacific, accounting for roughly 85-86%, or 192,000 tonnes, of the total.

During the first quarter of 2022, only 18%, or 43,000 tonnes, of the LPG shipped from Ust-Luga was destined for countries outside of the EU and the UK.

According to ship-tracking data, redirecting a substantial number of Sibur’s LPG shipments away from the Amsterdam-Rotterdam-Antwerp (ARA) trading hub outside Europe has notably extended the round trip for gas carriers. According to three LPG traders who spoke to Reuters, Sibur, and Trafigura have secured the services of larger vessels to transport LPG outside of the EU, to evade increased freight expenses.

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Ship-tracking data indicates that since August, the company has shifted its ship-to-ship (STS) loadings from ports in the ARA region to the Estonian port of Paldiski. LPG traders reported that Sibur’s LPG shipments originating from Ust-Luga are being purchased by Trafigura, who then reloads them onto MGC (medium gas carriers, roughly 22,000 tonnes) or LGC (large gas carriers, 44,000 tonnes) vessels at Paldiski.