Saudi Aramco cuts 2007 spot LPG exports to 1 mn T

Singapore, June 26: Saudi Aramco is cutting its spot exports of liquefied petroleum gas (LPG) in 2007 to one million tonnes, from 1.5 million tonnes last year, because of lower crude output, a company source said on Tuesday.

Saudi's state-owned firm, the world's biggest exporter of LPG, has cut crude oil production this year in line with OPEC curbs.

Term exports of LPG will not be affected, the source told Reuters on the sidelines of an industry conference.

The lower spot supplies may mean higher prices given rising regional demand for the feedstock from natural gas and petrochemical producers.

Aramco raised its June contract prices for propane and butane by around 6 percent from May levels. The prices provide a benchmark against which Middle East sales of LPG to Asia are priced.

Despite the lower spot LPG exports this year, Saudi Arabia sees substantial growth in the Middle East's LPG production by the end of the decade, an Aramco official told Reuters earlier this year.

Saudi Arabia sees its production rising to 25 million tonnes a year by 2009, from 20 million tonnes last year.

Reuters>