U.S. propane is fanning out across the planet, with export volumes now triple those of any other country. The global LPG market today is dominated by cargoes shipped from U.S. ports. Buyers from Mexico to South Korea can’t make a move without considering conditions on the Houston Ship Channel or pipeline constraints in Pennsylvania. But an interconnected market is a two-way street. U.S. propane prices are now influenced more by the weather in Europe and Asia than by the weather in Wisconsin or New Hampshire. And it’s not only propane. All NGLs are experiencing growth in U.S. export volumes, with huge implications for infrastructure, capacity constraints and, of course, prices. Today, we preview the deep dive into these issues on the agenda at RBN’s upcoming xPortCon conference.
NGL exports have been a frequent topic in the RBN blogosphere, with our most recent series on the subject titled Between Mont Belvieu and the Deep Blue Sea posted earlier this year. In those blogs, we discussed the terminals handling most of the export volumes, the largest destination markets for U.S. NGL exports, and the dock capacity expansions that are being developed. We also considered the impact of all of these exports on the U.S. domestic NGL market in Complicated - Petchem Demand, Exports. But these blogs only scratched the surface of what’s going on with U.S. NGL exports.
Figure 1 puts the magnitude of U.S. LPG (propane and butane) exports to overseas markets in perspective. From less than 100 Mb/d 10 years ago (for those of you that think in metric, that’s about 3 million metric tons per annum, or MMtpa), U.S. exports have soared to more than 1.1 MMb/d (about 33 MMtpa) — an 11-fold increase. In recent years, 60% of LPG exports have been sourced from the two docks located on the Houston Ship Channel: Enterprise and Targa. Another 30% came from two other Gulf Coast facilities: Energy Transfer at Nederland and Phillips 66 at Freeport. Only about 5% moved out of the Energy Transfer dock at Marcus Hook, PA, but that is changing fast. With the completion of the Mariner East 2 pipeline in December 2018 (see It's All Wrong, But It's Alright), Marcus Hook export volumes have been hitting all-time records in early 2019.