Over the past couple of years, the NGL market has cussed and discussed every nuance of PADD I ethane. The fear that ethane bottlenecks would curtail Marcellus drilling worried a lot of producers, and their investors. But it finally looks like the problem is being fixed, and the winners are settling out. MarkWest and Sunoco will take 50 Mb/d north to Sarnia, Ontario on Mariner West. And another 90 Mb/d will go south on Enterprise’s ATEX Express, the TEPPCO line reversal project. Chesapeake and Range have both signed up to move barrels on ATEX which runs from MarkWest`s Houston, PA plant down to the Enterprise storage complex in Mont. Belvieu. It’s nice to have one problem behind us. Unless of course it turns out that Utica ethane piles on to the top of Marcellus. But that’s another story.
What about PADD I propane? You don’t hear much about that NGL. But there must be a lot more of it coming into the market. And there must be some kind of impact on propane flows with the TEPPCO reversal. Right?
You’re bloody well right. Increasing production in the wet (high-BTU) portion of the Marcellus in PA and WV will throw an additional 80 Mb/d of propane into the PADD I market by the end of 2016. That’s a lot of propane. But not to worry. With so many PADD I refineries shutting down (only 3 remain), propane production from refineries will decline. And the market can balance itself by simply dialing back on propane imports from Canada and overseas, and reducing inflows from the Gulf Coast via TEPPCO. With the reversal and switch of a portion of TEPPCO to ethane service, that should not be a problem. Right?