A latecomer to the oil and gas market, LPG can be considered a child of the 1920s, a period that saw intense work on the problem of petrol’s tendency to evaporate. In 1911, American chemist Walter Snelling found that the main cause of the volatility of the petrol (gasoline) was propane and butane. It wasn’t long before he developed a practical method for separating them from petrol.
The first production started in the 1920 and larger transactions took place in the 1950s. Extensive consumption took off much later. A large fuel company introduced LPG to France in the 1930s, and in 1938 the first assembly line for filling pressurized gas bottles was launched near Venice, but the war broke out and put a halt on further developments. In the 1950s, gas cylinders began to be produced for households and they were licensed for marketing around the world.
The development continued as refining potential grew in the 1960s, at which point fuel oil replaced coal as an industrial fuel. LPG sales volumes in Europe saw strong growth: 300,000 tons in the 1950s, 3 million tons in the 1960s and 11 million tons in the 1970s.
Until the 1970s, LPG remained a regional business with different pricing, transport and buyers and sellers. The first international transaction took place in the 1950s between the US and South America. The 1973 fuel crisis was a turning point. Many oil states built liquefication plants once they realized the profitability of exporting LPG. The increase in Middle East production from 1975-1985 was impressive: from 6 million tons in 1975, volumes grew to 17 million tons in 1980 and 30 million tons in 1985. The 1980s saw LPG export expand worldwide. The LPG market became truly global as producers needed buyers regardless of whether they were located in Asia, Europe, the US or South America.