Unpredictable, Part 2 - The International Factors Influencing U.S. Propane Exports

It’s impossible to know for certain what will happen next in the international markets for propane, butane and ethane — there are too many variables and vagaries. What is very doable, though, is to gain a better understanding of the broader market forces at play. For example, the U.S. now has a few years under its belt as a major propane exporter, so it’s feasible to assess trends in where that propane is going — or no longer going — and to examine how propane exports to various parts of the world are impacted by everything from a high-stakes trade war to governmental efforts to encourage the use of cleaner cooking fuel. Today, we continue our deep-dive into propane, butane and ethane exports with a look at where propane exports from the U.S. East, West and Gulf coasts are heading, and why.

Thanks to the Shale Revolution and the resulting rise in crude oil, natural gas and NGL production, U.S. exports of propane took off in the 2010s, rising from less than 100 Mb/d 10 years ago to just shy of 1 MMb/d in the first few months of 2019, according to the Energy Information Administration (EIA) and RBN’s NGL Voyager report (see Figure 1). Further gains in propane exports are likely into the 2020s as U.S. NGL output continues to rise and domestic demand for propane remains close to flat on an annual basis. But as we said in Part 1 of this blog series, the rise in U.S. NGL export volumes hasn’t been smooth or steady on a monthly basis. There have been many ups and downs along the way, many of them tied to the long list of factors that can affect how much propane (and butane and ethane) is loaded onto ships each week (including pipeline problems or fog-shrouded Gulf Coast export terminals) and where NGL-laden ships set sail for (including how purity-product prices in the U.S. compare with those in key destination markets such as Asia and Europe).

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