Not surprisingly, propane gets most of the airtime in the U.S. LPG market with export volumes about 4X higher than normal butane. But as you can see from the left-hand chart below normal butane has also been on a pretty good run over the last decade. Normal butane exports have increased steadily over the last ten years going from just 30 Mb/d in 2013 to 413 Mb/d in 2021 (red lines). Exports slowed in 1Q22 but picked back up quickly averaging 428 Mb/d over the last twelve months. And butane volumes have been strong so far this year with exports hitting a record quarterly high of 465 Mb/d in 1Q23. Meanwhile U.S. domestic demand for normal butane has been relatively flat over the last ten years increasing from about 200 Mb/d in 2013 to around 250 Mb/d currently (right-hand chart below). With strong U.S. NGL production growth expected over the next 5 years, we estimate that U.S. butane exports will need to increase by 150 Mb/d – 200 Mb/d to balance the market.
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My Time Has Come - Normal Butane Exports Nearly Triple Year-over-Year
Propane has received a lot of airtime in recent months given the Polar Vortex and heavy crop drying demand anomalies coinciding with growing propane export volumes. Now it’s time to show normal butane a little love as normal butane exports almost tripled from this time last year. In January 2013, 22 Mb/d of butane was exported; that number was 63 Mb/d in January 2014, as reported by the EIA. All indications are that butane export volumes will be experiencing an astronomical growth rate over the next five years, reaching 300 Mb/d by 2019. What are the factors driving this rate of growth, and what are the implications for refiners and petrochemical companies? In today’s blog, we assess the rapid growth in normal butane exports.
Can't Get Enough - Gulf Coast LPG Export Dock Capacity Maxing Out; What Happens to U.S. Markets?
Gulf Coast LPG export capacity is tight again, and it’s going to get worse before it gets better — terminal capacity to load more barrels of propane and butane simply has not kept up with production gains. A number of new LPG dock expansions and greenfield projects are in the works, but they are 18 months or so away. In the meantime, production keeps rising, inventories are high, and it’s very unlikely we will see enough cold weather to balance the propane market. Bottom line: 2024 is shaping up to be a tough year for propane and butane prices. In today’s RBN blog, we examine what has been happening with exports, the looming dock capacity constraints, and the projects that will eventually relieve the imbalance.
Send Me an NGL - Where U.S. Exports of Butanes and Natural Gasoline End Up
When it comes to U.S. NGL exports, propane and ethane grab most of the attention. Each accounts for a big share of the typical NGL barrel, and ethane exports are a frequent topic of conversation because of the potential for growth — especially if the U.S. and China find a way to end their trade war. But three other so-called NGL “purity products” — normal butane, isobutane and natural gasoline — are being exported in increasing volumes too, providing important supplemental revenue to NGL producers and marketers. What’s their story? Today, we look at the export volumes and destinations of three often overlooked purity products.
