Exports of liquefied petroleum gases (LPGs) from the U.S. to international markets - are expected to nearly double from 466 Mb/d in 2014 to 825 Mb/d in 2018 as production from gas plant processing exceeds domestic demand. There are two LPG export terminals on the Houston Ship Channel that have been responsible for most exports, another six around the country that have exported some LPG over the past year, and still another four new-builds that have been announced. That’s a lot of volume and a lot of dock capacity. One question is whether there are enough LPG ships to handle all of these exports. Today we introduce our review of this question, looking at the specialized vessels used to ship LPGs.
This blog series is designed to help RBN members understand the nuances of the international LPG market in light of increasing U.S. waterborne exports of propane, normal butane and isobutane – known collectively as liquefied petroleum gases or LPGs. From the U.S. perspective, that involves getting to grips with unfamiliar terminology used to measure quantities, prices and shipping volumes overseas. We began our odyssey in Episode 1 with a primer on international weights and measures. Those measures include quantities in metric tons (MT) rather than Bbls and ship volumes in cubic meters (Cbm). We also provided conversion factors between U.S. volumes, international weights and LPG shipping volumes. In this episode we look at the specialized shipping vessels used to carry LPGs.
LPG shipping has a long and storied history. The first U.S. bulk LPG vessel was the 6,050 cubic meter vessel Natalie O. Warren, a dry-cargo ship refitted with pressure tanks. The ship went into service for Warren Petroleum in the late 1940's – shipping propane from Houston around the coast to Newark, New Jersey. Warren petroleum eventually became part of Gulf Oil that became part of Chevron and then part of Dynegy and finally part of Targa Resources that is today the second largest U.S. exporter of LPGs. Since the Natalie O. Warren, LPG vessels have become far more sophisticated.
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These days LPG vessels are almost always foreign flag, with the majority of large vessels used to move LPG from the Middle East to the Far East. However, there are hundreds of vessels of various sizes and configurations used all over the world to meet the requirements of many different markets. In the following paragraphs we will explore the four main types of LPG vessels.
One other point about LPG vessel configurations is that waterborne LPGs are transported in specialist vessels that use either cooling or pressure techniques to maintain cargos in liquid state that would otherwise be gases at room temperature. Liquefying the cargo allows a far greater volume to be carried. We have previously covered the market for liquefied natural gas (LNG) where large refrigerated vessels carry as much as 265,000 Cbm of natural gas at temperatures below -263 Fahrenheit (see Export Boom). LPG vessels are smaller than LNG carriers primarily because the volumes traded internationally are considerably less. Table #1 provides a summary of the four main gas carrier vessel types and their typical configurations and cargoes. In Column 1 of Table #1 are the vessel sizes, known by their initials as VLGC (very large gas carrier), LGC (large gas carrier), MGC (medium gas carrier) and smaller carriers (the larger of which are sometimes called “handy size”). We will cover each of these vessel sizes in turn in this episode.