Increasing Global LPG Demand Prompts Exporters To Explore Expansion Options
Argus, citing ship operator Avance Gas (Oslo), notes that U.S. LPG exports averaged 53 very large gas car- rier (VLGC) cargos a month in the third quarter of 2018, up from 46 cargos a month in the first quarter and from 27 in the whole of 2015. U.S. export capacity will increase by six to eight cargos a month now that the 275,000-bbld Mariner East 2 pipeline that feeds the Marcus Hook, Pa. terminal on the U.S. Atlantic coast is online. The line, owned by Energy Transfer Partners (Dallas), carries Marcellus shale propane and butane to Marcus Hook.
Energy Transfers Partners is also said to be interested in expanding LPG export capacity from the U.S. Gulf Coast. “Looking down the road, the industry was caught without enough capacity for production, so we are scrambling to help that situation,” said Marshall McCrea, COO of Energy Transfer.
Export capacity will increase by a further six to eight cargos a month this year if Enterprise Products Partners (Houston) proceeds with its plans to increase its export infrastructure on the Gulf Coast by mid-2019. Enterprise, already the largest global propane exporter, plans to boost LPG loading at its Houston Ship Channel facility by 30%.
The 175,000-bbld expansion, which will be primarily for propane and butane, will bring total LPG export capacity at the Enterprise Hydrocarbon Terminal to 720,000 bbld. The company expects to complete the expansion in the second half of this year. Enterprise will be able to load up to six VLGCs simultaneously, including loading a single VLGC in 24 hours, while maintaining the option to switch between propane and butane loadings.
Further, Enterprise and other midstream operators have announced plans to add as much as 2 MMbbld in fractionation capacity by 2020. But even with these projects, Enterprise foresees that growth of U.S. NGL production will outpace fractionation buildouts by 1 MMbbld in 2025.
Targa Resources (Houston) has ordered equipment to increase refrigeration capacity and loading rates at its Galena Park, Texas LPG export terminal. Targa will boost export capacity by 50% at the 7-MMbbl/month facility, in addition to completing dock upgrades and con- structing a new 20-in.-dia. NGL pipeline between Mont Belvieu and Galena Park. The firm will also add 220,000 bbld of fractionation capacity at Mont Belvieu by 2020. Targa has not provided a timeline for the export terminal expansion, but is seeking long-term customer commitments for the project.
Meanwhile, U.S. independent refiner and LPG exporter Phillips 66 (Houston) reports its Freeport, Texas LPG export terminal is running at about 180,000 bbld. U.S. LPG export terminals are operating at about 84% of capacity, the company adds, which should rise further this year.
(SOURCE: The Weekly Propane Newsletter, January 14, 2019)
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