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About LPG - Liquid Petroleum Gas 

 

LPG is a collection of hydrocarbon gases that have been compressed into a liquid state for convenience of storage and transportation, mainly Propane (C₃H₈) and Butane (C₄H₁₀). These gases are either naturally present in natural gas deposits and crude oil, or they are created when crude oil is refined. LPG is convenient to store in pressurized containers since it takes up significantly less space when liquid than when gaseous.

 

Natural gas and crude oil are the sources of liquefied petroleum gas. It is made up of hydrocarbons with perhaps three or four carbon atoms. This mixture contains hydrocarbon gasses and is combustible. However, the typical components of LIquefied Petroleum Gas are Propane (C₃H₈) and Butane (C₄H₁₀). There may also be trace amounts of other Hydrocarbons. Hydrocarbon Gases included in this flammable mixture are used as fuel for culinary appliances, automobiles, and heating appliances. It has two percent pentane, fifty percent butane, and forty-eight percent propane.

 

Mixtures that comprise mostly Propane and Butane, as well as occasionally combinations of both Propane and Butane, are among the types of LPG that are purchased and sold. Mixtures of Propane are more common in winter regions, while Butane is more prevalent in summer regions. Grades range from HD-5.  Small amounts of other hydrocarbons, including Propylene and Butylenes, Methane (CH4), Propane (C3H8), and ethane (C2H6), are also found. Ethanethiol, a potent odorant, is added to LPG to make leaks easier to find.

 

Because it burns easily in the air and has an energy content comparable to that of gasoline and double that of natural gas, Liqueied Petroleum Gas (LPG) is a great fuel for heating, cooking, and automobiles.

 

The LPG Production Process

 

LPG is either extracted as a byproduct of processing natural gas or during the refining of crude oil. The production process is broken down as follows:

 

1. Natural Gas Processing: Methane, Propane, Butane, and other gases are among the components of natural gas that are recovered from the earth. Fractionation is the process by which the heavier Hydrocarbons, such as Butane and Propane, are separated from the Methane, which is the primary component of natural gas.

 

2. Crude Oil Refining: When heavier Hydrocarbons are refined into lighter products like Gasoline and Diesel, LPG is created as a byproduct. During the distillation process, it is sorted out. .

Based on the current geopolitical landscape and recent policy announcements, the US sanctions framework significantly impacts global commodity sales in 2025:

 

  • The US Treasury's Office of Foreign Assets Control (OFAC) has intensified restrictions on Russia's energy sector, specifically targeting major oil producers and the affiliated maritime logistics networks to suppress commodity revenue streams.

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  • Compliance risk for commodity traders remains elevated due to the increased scrutiny of the shadow fleet and the potential for secondary sanctions on international actors facilitating the illicit transport of sanctioned crude oil and petroleum products.

Incoterms 2020 defines the essential responsibilities, costs, and risks for buyers and sellers in the international and domestic delivery of goods, standardizing commercial contract clauses globally. These rules, published by the International Chamber of Commerce (ICC), ensure clarity in critical activities like export clearance, carriage obligations, and the precise point of risk transfer between the two parties. A fundamental change in Incoterms 2020 was the clarification of appropriate levels of insurance coverage for the CIF (Cost, Insurance, and Freight) and CIP (Carriage and Insurance Paid To) rules, mitigating financial exposure for the cargo owner during transit. A significant structural update in Incoterms 2020 was the renaming of DAT (Delivered at Terminal) to DPU (Delivered at Place Unloaded), providing flexibility for the delivery point to be any agreed-upon location, not strictly a terminal.