Belvieu

The recent propane shortage is being called a “crisis” and for good reason. But like so many “crises” there is more to the story than is generally known and in this case it’s worth a careful examination of the events involved.  Clearly it was a perfect storm in the balance of supply and demand, resulting in huge price spikes.  And the consequences included panic, headline news, government intervention and of course, lots of finger pointing.  Today we look at how the market responded and why the propane industry will once again be stronger for it.

We’ve talked a lot here about NGL storage in Mont Belvieu and Conway.  Those are the big underground storage caverns washed out of salt formations thousands of feet below the surface.  But those are not the only places where NGLs are stored in underground salt caverns.  Two important facilities, especially for West Coast NGL markets are located in the seemingly unlikely locations of Bumstead, AZ and Adamana, AZ.  Today and in a later follow up we’ll look at why these facilities are in Arizona, how they got there, and the unique niche they fill in the NGL marketplace.