EPD Announces Construction Of Another LPG Export Terminal On The Gulf Coast; Widened Panama Canal Will Cut Transportation Costs For LPG

Enterprise Products announced the construction of a new liquefied petroleum gas (LPG) export terminal on the Gulf Coast :

Co announced the construction of a new liquefied petroleum gas (LPG) export terminal on the Gulf Coast. The facility will have the capability of handling up to VLGC (very large gas carriers) class ships. The initial loading rate for export grade propane or butane service is expected to be approximately 11,000 barrels per hour, which would equate to approximately 6 million to 6.5 million barrels per month.

Following the completion of the site evaluation at potential locations in Louisiana and Texas, this new LPG marine terminal is expected to be in service in the fourth quarter of 2015. Upon completion of the new terminal, and the recently announced expansion of the partnership's existing terminal on the Houston Ship Channel, Enterprise will have aggregate capacity to load ~15 million to 16 million barrels per month of low-ethane propane and/or butane at its LPG marine terminals.

Along those same lines, Bloomberg is reporting:

The widened Panama Canal will cut costs to ship U.S. cooking and heating gases to Asia by shortening voyages, effectively lowering tanker demand just as yards build more of the ships, according to Joachim Grieg & Co.

The canal expansion scheduled to finish in 2015 will shorten U.S.-to-Asia voyages for very large gas carriers to 25 days from 42 days going around Africa, said Steve Engelen, Oslo-based head of research at the shipbroking company whose clients include Europe’s largest producers. At the same time, yards will construct the most new vessels since 2008, according to data from Clarkson Plc, the world’s largest shipbroker.

U.S. terminal operators are expanding to take advantage of record exports of liquefied petroleum gases, a byproduct of surging domestic oil and natural-gas output. The wider canal will require fewer ships for shorter voyages, eliminating the premium for tankers loading in the U.S. even as it stokes trade, Engelen said.

“LPG globally will become cheaper, which incites more trade and is always positive for shipping volumes,” Engelen said. “The amount of ships being delivered is too much even with the big step up in demand, and the market will get worse and then basically collapse.”

Motley Fool is reporting that four companies are betting on increased LNG exports:
Kitimat LNG; Apache; Chevron; and, Exxon.

Status of US LNG-export terminals.

Exxon is the largest natural gas producer in the United States, and plans on being able to turn a profit off of its natural gas assets in a few years. If natural gas prices rise to $5-6 when the US starts exporting LNG in 2015 then ExxonMobil will see a strong headwind pushing profits up as it will fetch almost double the price it currently is selling natural gas for. 

Exxon owns a 30% stake in the Golden Pass terminal facility in Sabine Pass, Texas. Qatar Petroleum International owns the other 70%. So far the terminal has the right to export 15.6 million metric tons of LNG to nations with free-trade agreements and ones without one, making it one of the four LNG export terminals to be able to do so.

19 others are still seeking approval, so Exxon is ahead in the LNG export game. This will enable Exxon to fetch profitable prices for its natural gas.