Global Butane Market Size, Share, Opportunities, And Trends By End-user Industry (Residential, Industrial, Engine Fuel, Refinery, Others), By Source (Natural Gas, Refining), And By Geography - Forecasts From 2025 To 2030

Description

Butane Market Size:

The butane market is valued at US$75.947 billion in 2025 and is projected to grow at a CAGR of 4.31% over the forecast period.

The butane market’s growth is attributed to its increasing application in making liquid petroleum gases (LPG) and the corresponding use of LPG for domestic demand. Increasing adoption of LPG as a domestic fuel in emerging economies of Asia Pacific, such as India and China, where it is one of the largest imported commodities, and the means of government subsidies will remain a key driving factor for the growing demand for butane. According to the World Integrated Trade Solution (WITS), the global import of butanes was 41.52 million metric tons in 2023. The top importers of liquefied butanes were India, China, Indonesia, the European Union, and Morocco.

In Egypt, the government supplied around 3.6 million tons of butane gas, and Petrogas filled 310 million cylinders through 49 filling stations in fiscal year (FY) 2023/24. The government company Petrogas has 3,067 distribution centers.

The major leaders in the Global Butane Market are BP plc, Chevron Phillips Chemical Company LLC, China Petrochemical Corporation, Exxon Mobil Corporation, and Linde plc, among others. These players implement growth strategies such as product launches, mergers, acquisitions, etc., to gain a competitive advantage.

Butane Market Trends

One of the most notable trends shaping the butane market is the rapid expansion of its use in petrochemical processes and engine fuel applications. Butane plays a critical role in petrochemical feedstocks, where it is widely employed in steam cracking to produce derivatives such as butadiene, isobutylene, and raffinate, which serve as essential building blocks for the plastics, rubber, and chemical industries. This is particularly significant in Asia-Pacific, where surging industrialization and demand for downstream chemical products are fueling higher consumption of butane for petrochemical applications. Alongside this, butane is also witnessing increasing adoption as an engine fuel, either as a standalone component or as part of LPG blends, thanks to its relatively clean-burning properties and cost-effectiveness compared to conventional fuels like gasoline and diesel. In urban transport systems across developing economies, LPG-powered vehicles are becoming more popular as governments push for lower-emission mobility solutions, and butane’s role in these blends is expanding steadily. Together, these factors are making petrochemicals and engine fuel two of the most dynamic growth areas in the global butane market, with both segments expected to register solid CAGR levels through 2030 as industries and consumers alike pivot towards more efficient and environmentally aligned energy sources.

Butane Market Dynamics

Market Drivers

• Increasing Demand from the construction industry: The construction and building industry worldwide is showing a significant pace of growth and development. One of the primary reasons for this industry's expansion is the growing global urbanization. This includes constructing parks, hospitals, hotels, restaurants, houses, buildings, etc., for a large urban population. A construction site has several uses for energy, including cutting, welding, roofing, and drying. To carry out the tasks, reliable fuel is essential. This can be a mixture of hydrocarbons such as propane and butane, LPG, a popular fuel.

Besides the increase in the construction industry, according to Eurostat, in the European Union, building construction increased by 1.1% compared from 2022 to 2023, and civil engineering increased by 4.1%. Countries with significant increases are Romania, Poland, and Belgium, which are the top countries showing considerable growth in the region. This increase in the construction industry indicates an overall increase in raw materials for inputs, including the butane market.

• Expansion of the Petrochemical Industry: Another major growth driver for butane lies in its critical role as a feedstock in petrochemical production. Butane is processed in steam crackers to produce high-value derivatives such as butadiene and isobutylene, which are essential for manufacturing synthetic rubber, plastics, adhesives, and other specialty chemicals. With the world witnessing a surge in demand for consumer goods, packaging, textiles, automotive components, and construction materials, the petrochemical industry continues to expand rapidly. This growth is particularly pronounced in Asia-Pacific, where China, India, and Southeast Asia are scaling up investments in petrochemical infrastructure to meet domestic and export-oriented demand. As the petrochemical sector remains one of the largest consumers of butane, its expansion ensures a steady increase in butane consumption, making this segment one of the strongest long-term growth pillars of the market.
• Growth in Industrial and Engine Fuel Applications: Butane also finds robust demand in industrial and transportation fuel applications, further supporting market growth. In industries, butane is used for metal cutting, heating, and as a fuel for specialized processes where clean and high-efficiency combustion is required. On the transportation side, butane is widely blended into LPG for automotive use, offering a cost-effective and environmentally friendlier alternative to conventional fuels like gasoline and diesel. Regions such as Europe and parts of Asia have witnessed a steady rise in LPG-powered vehicles due to stricter emission norms and government incentives for alternative fuel adoption. Additionally, in developing economies, butane as an engine fuel is being promoted as a practical solution to balance affordability, accessibility, and emission reduction. With rising concerns around urban pollution and fuel efficiency, the demand for butane in industrial and mobility applications is projected to remain strong, cementing its role as a versatile energy source.

Market Restraints

• Price Fluctuation: The price fluctuation in the butane in the international market is a major challenge to the market's growth. The concerns over regional oversupply emerged at the end of the 2023 winter season. The regional butane demand dropped due to the transition to summer-grade gasoline, which limits the amount of butane that can be blended.

Butane Market Segmentation Analysis

By Source

Natural gas is dominating due to increasing crop losses.

Based on application, the market is classified into natural gas and refining.

Natural gas is projected to dominate the global butane market by source, owing to the vast reserves available worldwide and the growing importance of natural gas liquids (NGLs) in meeting energy demands. With the surge in shale gas exploration, especially in North America, natural gas has become a reliable and abundant source for butane production. The U.S. has emerged as a major supplier in this space, capitalizing on its rich shale reserves and modern processing capabilities. This abundance has not only reduced dependence on refinery-based butane production but has also enabled large-scale exports, ensuring a steady and cost-competitive supply for high-demand regions such as Asia-Pacific and Europe.

Another factor supporting the dominance of natural gas is the advancement in processing technologies, particularly cryogenic separation, which allows for efficient extraction of butane with high purity. These innovations have improved production economics, making natural gas-derived butane more competitive than refinery-based alternatives. The ability to scale production quickly and reliably also plays a crucial role, especially as industries like petrochemicals, residential LPG, and automotive fuels continue to expand their demand base. Compared to refinery outputs, natural gas processing offers greater consistency and flexibility in meeting global requirements, further consolidating its market share.

From a sustainability perspective, natural gas as a butane source aligns better with the global shift toward cleaner energy. Natural gas-based butane is generally considered to have a lower carbon footprint compared to refinery byproducts, making it more compatible with the environmental policies and carbon reduction targets adopted worldwide. This environmental advantage, combined with cost-efficiency and supply reliability, ensures that natural gas will remain the dominant source of butane production. As energy markets evolve, natural gas-derived butane is expected to play a central role in balancing affordability, accessibility, and environmental responsibility.

Butane Market Regional Analysis

By region, the market is segmented into North America, South America, Europe, the Middle East and Africa, and Asia-Pacific.

• North America
  North America plays a pivotal role in the global butane market, with the United States emerging as one of the world’s leading producers and exporters. This dominance is largely attributed to the shale gas revolution, which unlocked vast reserves of natural gas liquids (NGLs), including butane. The region’s advanced infrastructure for natural gas extraction, processing, and distribution ensures a steady and cost-effective supply. Additionally, North America benefits from a robust petrochemical sector, where butane is extensively used as a feedstock for producing derivatives like butadiene and isobutylene. Growing demand for LPG in residential heating, cooking, and industrial applications further drives consumption. Export opportunities, particularly to Asia-Pacific and Europe, strengthen North America’s influence in global trade flows, positioning the region not just as a consumer hub but also as a major supplier to meet international demand.
• South America
  The butane market in South America is primarily demand-driven, with residential LPG usage being the backbone of consumption. Countries like Brazil, Argentina, and Chile rely heavily on butane as a cooking and heating fuel, given its affordability and accessibility. Industrial applications are also expanding as the region undergoes steady urbanization and industrialization. However, South America faces a structural challenge in terms of limited local butane production capacity, making it more reliant on imports to meet its growing energy needs. Governments across the region are investing in energy access initiatives and promoting LPG as a cleaner alternative to biomass and kerosene, which is helping to drive demand further. As these programs gain traction and household adoption widens, South America is expected to remain a significant growth market, albeit one dependent on external suppliers.
• Middle East and Africa
  The Middle East and Africa together represent a unique dynamic in the global butane market, combining major producers with rapidly growing consumers. On the production side, Gulf countries such as Saudi Arabia, Qatar, and the UAE are leading suppliers, leveraging their vast oil and gas reserves to export butane worldwide. These nations are also investing in downstream petrochemical projects, where butane serves as an important feedstock, adding further value to their hydrocarbon economies. On the consumption side, Africa is witnessing a surge in LPG demand, particularly in sub-Saharan regions, where butane is increasingly adopted as a household cooking and heating fuel. Population growth, urbanization, and efforts to improve access to modern energy solutions are driving this trend. However, inadequate distribution infrastructure and affordability remain challenges in parts of Africa, though ongoing investments are expected to improve market penetration in the years ahead.
• Asia-Pacific
  Asia-Pacific is the largest and fastest-growing region in the global butane market, accounting for more than half of global demand. Rapid industrialization, urbanization, and population growth in countries such as China, India, Indonesia, and Vietnam are fueling massive demand for butane across residential, commercial, and industrial applications. The region’s petrochemical sector, particularly in China and South Korea, relies heavily on butane as a feedstock for producing key derivatives used in plastics, rubber, and chemicals. At the same time, government-led programs promoting clean cooking fuels are driving wider LPG adoption among households, particularly in India, where initiatives like PMUY have transformed access to modern fuels. Asia-Pacific’s sheer scale of demand, combined with its rapidly expanding middle class and energy-intensive industries, ensures that it will continue to dominate the global market both in volume and growth rate.
• Europe
  Europe represents a mature but stable market for butane, characterized by its strong industrial base, strict environmental regulations, and a high level of infrastructure development. The region uses butane extensively in petrochemicals, where it supports the production of synthetic rubber, plastics, and other derivatives critical to manufacturing and automotive industries. Additionally, butane is consumed in LPG blends for residential and commercial energy needs, though demand in this segment is relatively stable compared to emerging markets. A key driver in Europe is the shift toward cleaner energy sources, where butane, particularly in LPG form, is viewed as a lower-emission alternative to coal and heavy oils. Moreover, several European nations import significant volumes of butane to supplement domestic supply, relying on trade flows from regions like North America and the Middle East. While growth rates are modest compared to Asia-Pacific, Europe’s emphasis on sustainable energy and industrial innovation ensures continued relevance in the global butane landscape.

Butane Market Competitive Landscape

Key Industry Players

The butane market is highly competitive, led by global oil and gas majors such as ExxonMobil, Shell, BP, TotalEnergies, CNPC, and Sinopec, who leverage vertical integration and strong refining capabilities to dominate production and trade. Saudi Aramco and Sonatrach hold significant influence as state-owned giants, setting benchmark prices and controlling key export flows, while India’s state refiners (IOCL, BPCL, HPCL) are reshaping global trade by diversifying imports, particularly from the U.S. On the infrastructure side, companies like Phillips 66 and Keyera are investing heavily in pipelines, fractionation, and storage to strengthen supply chains. Regional players such as Valero, ConocoPhillips, Linde, and Ecopetrol further enhance competitiveness with localized distribution networks, while emerging firms like BW LPG and Otodata are innovating in LPG logistics and monitoring. Collectively, these players are focusing on supply chain resilience, petrochemical integration, cleaner fuel adoption, and market expansion to maintain leadership in a rapidly evolving global butane landscape.

List of Key Company Profiled

• BP plc
• Chevron Phillips Chemical Company LLC
• China Petrochemical Corporation
• ConocoPhillips Company
• Dow
• Others

Butane Market Key Developments

• Product Launch: In July 2025, BASF Intertrade AG and AltaGas Ltd. have signed a long-term commercial agreement for supply of butane via AltaGas and Royal Vopak’s Ridley Island Energy Export Facility commencing in 2027. REEF is a large-scale, open access liquefied petroleum gas and bulk liquids terminal with comprehensive rail and marine infrastructure currently under construction on Ridley Island, British Columbia, Canada.
• Company Partnership: In November 2024, Butane Energy Limited and the Nigerian Content Development and Monitoring Board (NCDMB) partnered to promote a cleaner and more cost-efficient cooking source in Nigeria. The Filling Plant was the second after the commissioning of another 100MT LPG Storage and Bottling Plant in Kabukawa Katsina as a part of a joint venture. The venture is to establish five such facilities in Northern Nigeria with a combined storage capacity of 1,000MT. Kano LPG Storage and Bottling Plant in Kano State will be commissioning in the first quarter of 2025. The construction work on another in Bauchi is at an advanced stage. Abuja will be next in line.
• Agreement: In August 2024, Cepsa agreed to sell a liquefied gas subsidiary (Gasib) in Spain and Portugal to Abastible, a subsidiary of Chilean Empresas Copec. The agreement included maintaining the sale of butane, propane, and autogas under the Cepsa brand. As well as synergies for the production and distribution of products at service stations. This is the first major European investment by Abastible, a Liquefied Gas leader in Chile, Colombia, Ecuador, and Peru, and a subsidiary of Empresas Copec.
• Company Expansion: In July 2024, Enterprise Products Partners L.P. will be expanding its project along the Houston Ship Channel in response to customer demand for natural gas liquids export capacity. At the Enterprise Hydrocarbons Terminal, the company would be adding refrigeration capacity that increases propane and butane export capabilities by approximately 300,000 barrels per day. The expansion would increase loading rates for propane and butane while making additional capacity available for propylene exports. The expanded service is expected to begin by the end of 2026.
• Partnership: In November 2022, SHV Energy and US-based GTI Energy partnered to further develop a process for commercial-scale production of renewable propane and butane. The process was a novel technology for producing renewable propane and butane (bioLPG) from bioethanol. The process can deliver propane and butane as the primary products. This was a significant improvement on current commercial processes. The process can bring substantial volumes of this clean-burning renewable fuel to the market. The collaboration of GTI Energy and SHV Energy, with Drochaid Research Services, a contract research organization, SHV Energy, developed a pathway to a renewable propane production process. The method identified a viable way to convert bioethanol into renewable propane. The process also yields a valuable co-product of aromatic molecules, a key component in sustainable aviation fuels.

The Butane Market is segmented and analyzed as below:

• By End-user Industry
  • Residential
  • Industrial
  • Engine Fuel
  • Refinery
  • Others
• By Source
  • Natural Gas
  • Refining
• By Geography
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Rest of South America
  • Europe
    • United Kingdom
    • Germany
    • France
    • Italy
    • Spain
    • Rest of Europe
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Rest of the Middle East and Africa
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • Taiwan
    • Thailand
    • Indonesia
    • Rest of Asia-Pacific

Table Of Contents

Companies Profiled

BP plc

Chevron Phillips Chemical Company LLC

China Petrochemical Corporation

ConocoPhillips Company

Dow

Exxon Mobil Corporation

Linde plc

Merck KGaA

Shell plc

TotalEnergies

Ashish Chemical

Butane Energy Limited

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