Propane Production Increases Sharply

As shown on the left-hand chart below, monthly propane gas plant production for March 2023 finally recovered from the weather-related curtailments in December.  March propane production, as reported by the EIA on May 31, increased to 1,931 Mb/d, up 60 Mb/d from February and 100 Mb/d, or 5.5%, above what was recorded in March 2022.  However, production remains 29 Mb/d, or 1.5%, below the all-time high of 1,960 Mb/d set in September 2022.    Not surprisingly, most of the increase in propane supply has been in PADD 3 (Gulf Coast), which represents about 60% of total U.S. production.  As shown on the right-hand chart below, Gulf Coast gas plant volumes increased to 1,126 Mb/d in March, up 55 Mb/d from February.  March production for the region was 86 Mb/d, or 8.3%, higher than March 2022, but remains 23 Mb/d, or 2%, below the record high for PADD 3.  Although the lack of propane production growth since September is concerning, we still expect strong growth in the second half of the year supported by new midstream infrastructure in the Permian Basin and Mont Belvieu.