OPIS Insights

The Northwest European liquefied petroleum gas (LPG) is expected to undergo some subtle market changes in 2026, with additional U.S. imports to make up for the loss of Russian LPG supplies inside the EU, while a portion of North Sea LPG could be set for re-injection into the natural gas stream.

Processing maintenance in Norway will take place from early spring into late summer 2026. Demand for LPG as feedstock is expected to remain robust as European cracker closures and plant idling in 2025 have been focused on heavier feed units; monthly LPG imports are expected to remain at late-2025 levels throughout 2026.

In the U.S., 2026 LPG export capacity additions will have to precede or match production additions to avoid constraints as softer domestic demand will help push the new volumes to be exported.

An additional ban on Russian butane and iso-butane in the European Union started in October 2025 with a three-month transition period for long-term contracts, according to consultancy A-95. The ban comes a year after Russian propane was banned in the EU, meaning 2026 will effectively see a total ban on all Russian LPG.

Additional large-cargo propane imports to Karlshamn and Stenungsund in Sweden which are subsequently moved to Finland and Poland in smaller ships has been a feature in 2025 and we expect this to continue in 2026, while butane exports to eastern European markets that formerly took Russian supply are likely to increase in 2026. Russian supply made up around 6% of total LPG imported into the EU in 2023, according to European Commission data.

Riga in Latvia popped up as a surprise destination for North American LPG from the middle of 2025. LPG imports at Riga have rocketed to around 145,000 metric tons in 2025 from just 1,700 mt in 2024, Vortexa data showed.

Volumes taken into Riga are then re-exported to other Eastern European countries, predominantly Poland. With storage and handling capacity at terminals in Poland limited, the country has managed to negotiate volumes into Riga, helping offset the lack of Russian tonnage. The terminal can handle vessels up to Large Gas Carrier (LGC) size cargoes.

There are four main seaborne LPG terminals in the north – Police, Szczecin, Gdansk and Gdynia. However, their combined capacity is not enough to cover the total seaborne flow needed to make up for the ending of Russian LPG trade.

From the petchem side, Polish chemical company Grupa Azoty, which began operations at its Police PDH unit in 2023, has yet to fully commission the facility, with debt issues surrounding the plant. Grupa Azoty received an offer from Orlen to acquire the 437,000 mt/year unit in October, but no update has been heard on this.

LPG supply from the North Sea is likely to remain steady in 2026 as fields mature. A shift in higher natural gas prices in Europe and lower relative propane and butane prices have led to prolonged periods where a portion of the gas liquids find more value inside the natural gas stream on a heat equivalent price basis. OPIS expects this re-injection of some of the liquids to continue in 2026 despite a busy maintenance schedule at onshore processing plants.

Gas liquids processing hubs at Karsto and Kollsnes in Norway are each to see maintenance affecting between 10-30% of capacity intermittently between March-September 2026, according to Norwegian gas operator Gassco.

The units have undergone significant periods of maintenance works over the course of 2025, hampering LPG exports out of Karsto and Mongstad. Despite the possibility of less LPG being re-injected into the natural gas stream by end-2025, with additional U.S. tonnage expected to arrive in the new year, potentially bringing softer LPG prices in Europe, re-injection is set to continue in 2026.

In the U.S. LPG output and exports are projected to continue to rise. At the Permian shale gas field NGL production is to rise to 3.55 million b/d in 2026 from around 3.26 million b/d by the end of 2025, according to Rob Wilson, chief operating officer of East Daley Analytics in early 2025.

Projected LPG exports on VLGCs from North America are to reach 66 million mt in 2026, from 61 million mt in 2025, before stepping up another 3 million mt in 2027, according to a BW LPG presentation in late 2026.

Still, the new supply and exports will depend on the expansion of U.S. export terminals. Two key midstream majors in the U.S., Enterprise and Energy Transfer, are each continuing to develop further their existing export infrastructure.

Enterprise is to increase its LPG export capacity at its Neches River Terminal (NRT) by 360,000 b/d propane in the first half 2026, while the Enterprise Hydrocarbon Terminal (EHT) will bring on a further 300,000 b/d propane-based capacity by the end of 2026, according to an Enterprise presentation in late 2025. Meanwhile Energy Transfer has added a further 250,000 b/d to its Nederland terminal adjacent to Beaumont.

And after a wave of ethylene plant idling and permanent shutdowns in 2025, polyolefins recycler and base chemicals producer Borealis expects its Kallo 740,000 mt/year propane dehydrogenation (PDH) plant to start up in the second quarter of 2026. The Kallo PDH2 project reached more than 90% completion in 2024, and all remaining construction was expected to be completed by the end of 2025.

And in the Mediterranean, there are at least three major tenders which have not concluded – one into Egypt, one into Tunisia and another into Syria. Although the tenders from Egypt and Tunisia both seek the same volumes as in 2025, the origin and supplier of these volumes is up for discussion.

Egypt imported around 2.23 million mt in 2025, up from 1.95 million mt in 2024, with the U.S. making up 85% of total volumes. Tunisia imported around 480,000 mt in 2025, compared to 474,000 mt in 2024, with Algeria the main supplier of LPG at 51%. Looking ahead to 2026, Syria is still active with their tender to import 25,000 mt/month, up from the 10,000 mt/month they received in 2025.

In the West Mediterranean market, U.K.-Chinese company Petroineos began maintenance at its 210,000 b/d Lavera cracker in September. The unit is expected to return to full operations in January, sources indicated.

The East Mediterranean market is highly influenced by the Ukraine-Russian conflict and that is likely to be a factor entering 2026. LPG flows in the Black Sea are likely to step up in 2026 having been hampered by the war since 2022. Turkey could potentially look to import more LPG from the U.S. instead of from Russia.

Reporting by Jamie Aldridge, jaldridge@opisnet.com, Dermot McGowan,
dmcgowan@opisnet.com; Editing by Rob Sheridan, rsheridan@opisnet.com