U.S. LPG export volumes have climbed to astronomical levels this year. Almost 60% of U.S. propane production, or about 1.3 MMb/d on average so far in 2019, along with a sizable volume of butane, is being shipped to overseas markets, mostly to Asia. As anyone who’s talked shop with an LPG trader knows, international trading of propane and butane (collectively LPGs — Liquified Petroleum Gas) is a wild, roller-coaster kind of business. But how exactly does it all work? How do the players involved acquire the volumes, cut the deals with export dock owners, arrange for shipping and sell the cargoes to buyers? And, most importantly, how do these shippers make money? Today, we begin a series on international LPG trading that looks behind the curtain and drills down into the nuances that make the difference between success and failure in this traditionally opaque world.
LPG is a favorite and frequent topic of ours in the RBN blogosphere. As we said in Part 1 of Between Mont Belvieu and the Deep Blue Sea, our series on LPG export terminals, the U.S. flipped from being a net LPG importer to a net exporter in 2012. Since then, export volumes shipped to overseas destinations have been rising like a rocket. The left graph in Figure 1 shows that the vast majority of LPG exports in 2019 year-to-date are coming out of terminals along the Texas Gulf Coast, including about 700 Mb/d from Enterprise and Targa Resources’ docks along the Houston Ship Channel (HSC; green bar segments) and another 400 Mb/d from Phillips 66, Energy Transfer and Trafigura’s terminals in Freeport, Nederland and Corpus Christi, respectively (red bar segments). The late-2018 start-up of Energy Transfer’s Mariner East 2 pipeline to the company’s Marcus Hook terminal near Philadelphia, in turn, has boosted LPG exports from the East Coast (aqua bar segments), and don’t forget Ferndale in Washington state (purple bar segments). As for where all that U.S.-sourced LPG is going (right graph in Figure 1), in 2019, nearly half has been heading to Asia (dark blue bar segments), and most of the rest has been bound for either Latin America (light blue bar segments) or Europe (orange bar segments).
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About the song
“(Let’s Get) Physical” was written by Steve Kipner and Terry Shaddick — actually with Rod Stewart in mind. Stewart passed on it, as did Tina Turner after her manager Roger Davies presented it to her. Davies also managed Olivia Newton-John, who recorded the song and made it the focus of her next album. "Physical" was the first cut on side two of Newton-John's ninth studio album of the same name. It was released as the first single from the album in September 1981, and went to #1 on the Billboard Hot 100 chart. The video of the song received heavy rotation on MTV, and won a Grammy Award for Video of the Year in 1983. Personnel on the song were: Olivia Newton-John (lead and backing vocals), John Farrar (guitar and backing vocals), Steve Lukather (guitar solo), David Hungate (bass), Bill Cuomo (synthesizer), Robert Blass (keyboards), Carlos Vega (drums), Lenny Castro (percussion) and Gary Herbig (horns). "Physical" would become Newton-John's biggest hit in her career.
The Physical album was produced by John Farrar and recorded at Record One, Ocean Way Recording, and David J. Holman Studio in Los Angeles between October 1980 and June 1981. It was released in October 1981, where it went to #6 on the Billboard Top 200 Albums chart. It has been certified 2x Platinum by the Recording Industry Association of America. "Make a Move on Me" was released as the follow-up single to "Physical," and went to #5 on the Billboard Hot 100.
Olivia Newton-John is an English-born Australian singer, songwriter and actress. She has released 28 studio albums, six live albums, 17 compilation albums, four soundtrack albums and 71 singles. She has appeared in 14 motion pictures and 24 television shows. Newton-John has won one Academy of Country Music Award, 10 American Music Awards, nine Billboard Awards, one Country Music Association Award, one Daytime Emmy Award and four Grammy Awards. Due to health issues, Newton-John is not currently recording or touring.
