Sunday Morning, Notes From All Over, Part 2 -- November 3, 2019

Saudi Aramco IPO: smoke and mirrors. To be listed on local (Saudi) exchange. Prospectus won't be out until a week after IPO launched. No mention of valuation or % of company. Sort of explains why it's not on any of the major bourses. (Later: a valuation of $1.6 trillion, apparently.)

Looking for yield? From Bloomberg--

At a $1.6 trillion valuation, the yield would be 4.7%, against 4% for Chevron Corp., 5% for Exxon Mobil Corp. and 6% each for Royal Dutch Shell Plc and BP Plc. (Note that Chevron’s yield, adjusted for buybacks, is closer to 6%.) 

Enbridge Line 5: update from Reuters.

Propane, two stories:

• back in July, 2019, farmers were warned
• two days ago, propane delivery crisis plagues the midwest
• do you remember this story, from December, 2013? the US propane shortage
• from an earlier post, just a couple of days ago -- 
• RBN Energy: don't bank on a boring propane market this winter.
  

  U.S. propane production has been on the rise for most of 2019, but propane consumption by steam crackers has been reined in by poor economics, and propane exports have been constrained by export-capacity shortfalls. That’s led to a big buildup in propane inventories, which stand at near-record levels as the market prepares for a winter heating season that is forecasted to be milder than normal. So we’re in for only a modest draw on propane stocks between now and spring, right? Not necessarily. There’s change in the air regarding propane supply, cracker demand and export capacity and, as we learned in the balmy winter of 2016-17, the U.S. propane market isn’t nearly as dependent on the weather as it used to be. Today, we assess recent market developments and explains why a big decline in propane stocks is a real possibility.

  Propane is an NGL purity product that has two primary uses: as a fuel (mostly for heating, but also for cooking and crop drying, and occasionally for cars, trucks and buses) or as a feedstock for petrochemical plants (steam crackers to make ethylene, or propane dehydrogenation -- PDH -- plants to make propylene). Propane also has two primary sources of supply: refineries and natural gas processing plants, the latter of which separate out mixed NGLs from natural gas streams. These mixed NGLs from processing plants (also known as y-grade) then are sent to fractionators, where y-grade is divvied up into what are called “purity” products (ethane, propane, normal butane, isobutane and natural gasoline). The Shale Revolution has enabled the U.S. to produce more than enough propane to meet its own heating and petchem needs, and to become a major exporter of propane.