By the third quarter of next year, the Enterprise Hydrocarbons Terminal (EHT) on the Houston Ship Channel will have the capacity to export nearly 1.1 MMb/d of LPG — 435 Mb/d more than it can today. Also, Targa Resources and Energy Transfer are each planning 200-Mb/d expansions at their LPG export docks along the Texas Coast, and Phillips 66 and MPLX may very well be announcing projects of their own soon. All this suggests that there will be ample dock space available to propane and butane shippers if, as we expect, LPG volumes continue to ramp up in the 2020s. And, with Enterprise Products Partners’ promise to offer super-competitive rates at EHT, shippers are likely to enjoy low send-out costs. Today, we discuss recent developments on the propane/butane marine-terminal front and what they mean for LPG shippers and exports.
Thanks to the Shale Revolution and the burgeoning production of NGLs, the U.S. flipped from being a net LPG importer to a net exporter back in 2012. Since then, waterborne LPG exports have soared, to more than 1.4 MMb/d in both May and June and an average of 1.25 MMb/d in the first six-and-a-half months of 2019, according to RBN weekly NGL Voyager report. As we said in our Between Mont Belvieu and the Deep Blue Sea blog series earlier this year, the vast majority of those export volumes (just under 1.2 MMb/d of the 1.4-MMb/d total in June, for example) are sent out of a foursome of large marine terminals along the Gulf Coast. The biggest of the Big Four is Enterprise’s EHT; the others are Targa Resources’ Galena Park Marine Terminal, also along the Houston Ship Channel; Phillips 66’s Freeport LPG Export Terminal down the coast in Freeport, TX; and Energy Transfer’s export facility over in Nederland, TX (see the Figure 1 map). [Buckeye Partners and EnLink Midstream have much smaller terminals in Corpus Christi, TX, and Geismar, LA, respectively; Trafigura is the Buckeye terminal’s exclusive customer, and EnLink’s terminal is called Riverside.] We noted in that series that the Big Four then had a combined capacity of just under 1.2 MMb/d — Enterprise with 545 Mb/d, Targa with about 230 Mb/d, and Phillips 66 and Energy Transfer with 200 Mb/d each — which would indicate that these facilities have been running at or near their full capacity.