Doesn’t Australia sell gas to China very cheaply – why isn’t LPG priced this low?
LPG is often confused with Liquefied Natural Gas (LNG). Australia is a major exporter of relatively cheap LNG due to abundant resources of natural gas. Automotive liquefied petroleum gas (LPG) or Autogas is a combination of propane and butane which both occur naturally in natural gas fields and are separated out when the gas is processed. Propane and butane are also produced from crude oil in the refining process. Australia exports about the same amount of LPG as is used domestically with the largest markets being Japan, the Republic of Korea and China. Pricing for exports is based on the Saudi Aramco Contract Price, which is the same benchmark as used in Australian LPG wholesale pricing. More information: Natural gas is primarily methane extracted from underground reserves and either piped to the point of use or compressed as compressed natural gas (CNG) or chilled as liquefied natural gas (LNG) for transport and storage.