Friday, April 29, 2016

Data Points From RBN Energy's Update On US LPG Exports -- April 29, 2016

In a long note like this, there will be typographical and factual errors. Personal comments / opinion may be interspersed with "facts." If this information is important to you, go to the source. I do this simply for my benefit to insure that I really do read the article and not skim through it.

This is taken from "episode 2" of RBN Energy's update of US LPG exports from the Gulf coast. It really is quite an amazing story and suggests that one of the big stories of the 21st century will be the emergence of US as the global energy powerhouse.

Some of the data points follow.

First, the data points from "episode 1":
  • US domestic production of NGLs (like propane and butane is soaring
  • US liquified propane gas (LPG) exports in the past three years have rocketed to the top
  • US exports of LPG now surpasses exports by the old Big Three: UAE, Qatar ("cutter"), and Algeria
  • the rise in LPG exports may be ending
  • exports from the Gulf coast may be in for a decline
  • more propane and butane from the Marcellus and Utica will be re-routed to Marcus Hook, PA
  • demand for new propane dehydrogenation plans and flexible steam crackers will be climbing
This episode, episode 2, will focus on how the Panama expansion will affect LPG exports. The data points follow.
  • the Panama expansion will be operations within a few weeks
  • all but the world's very biggest LNG vessels will be able to transit the canal
  • huge times savings from the Gulf coast to Asia: from more than six weeks (around Cape of Good Hope) to three weeks (Panama Canal)
  • daily rates for these sea-going tankers have tanked
  • two "events" have changed LPG export dynamics: Marcus Hook and PDH
    • Mariner East 2 pipeline across Pennsylvania will re-route 275,000 bopd by 2017; to Marcus Hook, PA
    • once at Marcus Hook, LPG-BR (rail) across the US; propane at those terminals is at the expense of propane at Gulf coast terminals
    • more domestic processing through increased number of PDH plants
  • US LPG exports have been on a tear
    • January, 2013: 184,000 bopd LPG exports from Gulf coast
    • January, 2016: 1,047,000 bopd LPG exports from Gulf coast (nearly six-fold increase in three years)
  • destinations:
    • exports to China: 111,000 bopd (up from 17,000)
    • Japan 70,000 bopd (up from 55,000)
    • South Korea: 37,000 bopd (up from 11,000 bopd)
    • Singapore: 30,000 bopd (up from 4,000 bopd)
    • China is the biggest importer of US LPG, beating out Canada (87,000 bopd in 2015, more than half was ethane)
    • rounding out the top six: Mexico (91,000), Brazil (47,000), and the Netherlands (46,000), Dominican Republic (32,000)
  • the LPG export terminals along the Gulf coast
    • EPD/Houston Ship Channel: 
      • completed its 2015 expansion; can now load one VLGC every 24 hours (from 300,000 bopd to 533,000 bopd)
    • Targa Resources/Galena Park
      • 3Q14: completed its expansion, from 100,000 bopd to 233,000 bopd 
    • Sunoco Logistics/Nederland/Mariner South
      • anchor customer is Shell; 150,000 bopd, or almost 20% of Gulf coast exports
    • Occidental Petroleum/Ingleside
      • commissioned in 2015, but exports have been negligible
    • Phillips 66/Freeport
      • building the latest LPG export terminal, a 150,000 bopd facility at Freeport, TX; to be on-line 3Q16; completed; first shipment December 16, 2016
    • Buckeye Partners/Trafigure/Corpus Christi
      • accounts for about 2% of Gulf coast exports so far this year
  • Total LPG export capacity from Gulf coast: 1,200,000 bopd export capacity
Bottom line: Marcus Hook, PA, and PHD plants in the US have changed the dynamics of US LPG exports. 

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