A positive outlook for Canada’s propane industry

In Canada, the production of propane, a hydrocarbon that, in its liquid state, falls within the category of liquefied petroleum gases (LPGs), is on the rise. Between 2015 and 2018, propane production in Alberta increased from 7,958,621 cubic metres to 12,610,330 cubic metres, an increase of almost 37 percent. While this is principally due to the growth in liquid rich natural gas production in the Montney region, it is also the result of the closure of Canada’s principal propane export pipeline, the Cochin pipeline, in 2014. Prior to April 2014, most propane produced in western Canada was exported to US markets on the Cochin pipeline. In April 2014, the Cochin pipeline was reversed to transport light petroleum liquids from the US to western Canada. Exports of propane to the US dropped dramatically, leading to an oversupply of propane in Canada and resulting in much lower propane prices.

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This article was first published in the April 2020 issue of Financier Worldwide magazine. ©2021 Financier Worldwide. All rights reserved.