Over the last decade, U.S. propane production has more than doubled, but those additional gallons aren’t staying in the United States. Propane exports are on the rise, and Midwest suppliers have been investing in new pipeline infrastructure to expand their export options and achieve more consistent demand throughout the year.
For U.S. customers, the global propane market is changing how and when they buy, often requiring earlier commitments to secure adequate supplies and protect against price risk.
“U.S. propane production continues to grow at a healthy pace and was up by about 4.5% in 2024 over the previous year,” says Tyler Kelly, director of propane trading at Ä¢¹½Ö±²¥. “It’s projected to increase by another 3.5% in 2025. At the same time, global demand and U.S. exports are expected to grow.”
With as much as two-thirds of U.S. propane production now being exported, there will be less domestic supply if commitments aren’t in place. “While Ä¢¹½Ö±²¥ prioritizes owner and customer needs and rarely exports propane, propane producers are selling their product into the most profitable markets,” says Kelly.
“That’s why it’s more important than ever for retailers and their customers to have a sound supply plan in place and to evaluate additional storage needs to help hedge against price and supply risk.”
Both types of risk have taken on new meaning in recent years, notes Travis Dunham, director of propane supply at Ä¢¹½Ö±²¥. “There are plenty of global unknowns and domestic factors that could impact export demand in the year ahead, including inflation, new developments in the Middle East and Ukraine conflicts and tariffs on U.S. imports.”
Dunham and Kelly point to five propane market trends as indicators export markets will see continued strength in the coming years.
1. U.S. production has doubled in the past decade, but domestic demand has flattened.
U.S. propane production has been on a steady increase since 2012, when the industry produced 1.25 million barrels per day (bpd). In 2024, the U.S. more than doubled that volume, reaching 2.65 million bpd. Over the same period, domestic demand has remained stagnant.
2. In 2024, 65% of U.S. propane production was exported.
Thanks to major investments in propane infrastructure over the past five years, including new pipelines and export terminals, U.S. exports have jumped from an average of 1.35 million bpd in 2022 to 1.75 million bpd in 2024. In 2021, after the first major phase of infrastructure expansion occurred, exports averaged 52% of total U.S. production. By 2024, that number had increased to 65%.
3. New pipelines provide export access to the Midwest.
Initial growth in U.S. liquid petroleum gas (LPG) exports came primarily from Gulf Coast producers, but interregional pipeline projects are now connecting parts of the Midwest with hubs at Conway, Kan., and Mont Belvieu, Texas.
“Producers as far north as the Bakken oil fields in North Dakota now have more marketing options, including exporting,” says Dunham. “Midwest retailers and their customers can no longer assume access to regionally produced propane supply.”
4. U.S. exports have nearly reached capacity of the current infrastructure.
In the short term, propane exports are constrained by capacity limitations, but several major export infrastructure expansions are in the works. When completed later this year and in 2026, three Gulf Coast projects will increase export capacity by 30%.
5. China’s demand already outpaces U.S. demand.
The world’s fastest-growing propane demand is in China, where new propane dehydrogenation (PDH) plants continue to meet the nation’s (and world’s) increased demand for plastics. Propane demand from China’s PDH sector now exceeds total U.S. demand from residential, commercial and agricultural uses combined.
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