Total US oceangoing exports of ethane reached 389 Mb/d in mid-September, reaching a 2024 high.
Outflows from the U.S. East Coast of 85 Mb/d pushed total U.S. ethane exports to their highest level so far this year (see chart below), surpassing the previous high of 379 Mb/d in April.
Last week Hurricane Harvey roiled the entire energy complex, with NGL markets suffering substantial disruption — curtailed natural gas liquids production from gas processing in the Eagle Ford and other basins, reduced operating rates at Mont Belvieu and other fractionation sites, shuttered LPG and ethane export docks, widespread refinery closures and a virtual shutdown of Gulf Coast petrochemical plants. While little major damage to facilities has been reported and several plants are now restarting, operating conditions continue to be extremely difficult for both the supply and demand sides of the market. Today we continue our look at how high winds and days of torrential rain affected the U.S. energy industry, this time focusing on NGLs.
The 2022 hurricane season is off to a quiet start, but the tropics seem to have awakened in recent days and are likely to ramp up in September — the peak month for tropical storm activity. Forecasters are still predicting an above-average season, calling for as many as 10 hurricanes and up to five major ones. That would mean greater volatility for energy markets in any year, but the stakes are arguably higher this year than any time in recent memory — especially for natural gas. That’s because prices are already at the highest level in over a decade and flirting with the $10/MMBtu mark. The gas market is tight domestically and globally, particularly in Europe. Lower 48 storage remains near the five-year low. European gas storage, after lagging far behind, has caught up to the five-year average this month, but the continent is still dependent on a consistent stream of U.S. LNG cargoes, particularly as it works to wean itself off Russian gas supplies. What happens when you add to that the prospect of hurricane-related disruptions to Lower 48 production or LNG exports, or both? Much of that will come down to the timing, path and strength of any impending storms. That’s a lot of unknowns, and where there is that much uncertainty, volatility is sure to follow. With the National Hurricane Center (NHC) predicting high chances of potential cyclone development as early as later this week, today’s RBN blog considers the possible implications for the U.S. gas market balance.
