History of LPG

LPG was a late developer in the oil and gas business. The history of LPG can be traced back to the beginning of the 20th Century. In the early production of gasoline, one problem faced was that gasoline quickly evaporated when in storage.  In 1911, an American chemist, Dr. Walter Snelling, identified that the propane and butane within gasoline caused its evaporation. He soon developed a practical method of removing these gases from the gasoline.

The first commercial production of LPG had to wait until the 1920's, while the first regional trade until the 1950's. The extensive use of LPG did not really develop until the 1940's through the 1960's.

A large oil company introduced LPG to France in the mid 1930's. And a large gas company built a bottling plant in Italy, near Venice, in 1938. But developments then were cut off by the war.

By the early 1950's, companies were producing LPG cylinders for household use and these were being marketed elsewhere under license.

Growth proceeded at the pace of refinery availabilities. These expanded, particularly in the 1960's, as new refineries were built and fuel oil displaced coal as the industrial fuel. Europe-wide LPG sales increased from 300,000 tons in 1950, 3 million tons in 1960, and 11 million tons in 1970.

Prior to the 1970's, LPG in international trade had been essentially a regional business, with each region having its own pricing structure, shipping, and buyers and sellers. The first regional trade, starting in the 1950's, had been from the US Gulf to South America.

The oil crisis of 1973 was a turning point.  Many oil rich countries built liquids recovery plants as they realised that the exports of LPG could generate a significant monetary return. The expansion of Middle East LPG capacity which occurred over the 1975-1985 decade was truly staggering - from a total of 6 million tons of installed capacity in 1975 to 17 million tons by 1980 and 30 million tons by 1985. It was not only in the Middle East that LPG plants were being built. Australia, Indonesia, Algeria, the North Sea, and Venezuela were also new sources of supply. The 1980's in fact turned out to be a period of tremendous LPG export expansion worldwide. The LPG market became truly global at this time. Producers needed buyers, whether they be in Asia, Europe, the United States, or South America. The new export volumes had to find outlets somewhere.