Mid-Month to Mid-Month: November Gains, Losses

Amongst the gloom over stubbornly depressed energy commodity prices, the accompanying loss of tens of thousands of well-paying jobs, and the Obama administration’s rejection of the Keystone XL pipeline, there was some good
energy news in the NGL sector at press time. It regarded propane’s less-considered kinsman, ethane. Plagued by high rejection rates as production levels soared along with the U.S. shale revolution, producers have long sought expanded markets for the liquid. Houston-based Enterprise Products said Nov. 9 that its new 200,000-bbld ethane export terminal on the Houston Ship Channel was 90% contracted. When commissioned next year, the facility will be able to load fully refrigerated cargos at rates up to 10,000 bbl an hour. In addition, Ineos Europe AG said it had secured a long-term agreement for U.S. shale ethane to feed its Fife Ethylene Plant in Scotland. The plant, which has an annual capacity of 830,000 tonnes, will receive the feedstock at Ineos’ new import terminal in Grangemouth.

Mont Belvieu posted prices for propane entered mid-October at 56.719 cents/gal., up just fractionally from a month earlier. A week later the average dropped about 3.5 cents to 53.156 cents, and then gained back a penny as November arrived. A week into the new month prices rallied to roughly the mid-month period opening at 56.906 cents. However, this week they have declined to 55.281 cents.

Posted prices at Conway, Kan. followed a similar course, and in mid-October stood at 45.302 cents/gal., 2.325 cents under mid-September. The next week the average lost nearly 3 cents and dropped to 42.333 cents, but closed October about 1.25 cents higher at 43.615 cents. With November’s arrival prices hardened 2.5 cents, rising to 46.118 cents. But this week they have dropped 3 cents to 42.993 cents.

Mont Belvieu spot propane began the mid-month period at 42.875-43.125 cents/gal., nearly 3 cents below the prior month. Spots, at 41.75-42.25 cents, gave up 1.125 cents as October progressed, and ended the month up 1.5 cents at 43.25-43.50 cents. November saw Belvieu propane advance 1.375 cents to 44.625-45.00 cents, but this week trading is lower by about 3 cents at 41.75-42.00 cents.

Conway, Kan. spot propane in mid-October was closing on a 3-cent discount to Mont Belvieu at 40.00-40.50 cents/gal., 3.625 cents under mid-September. Spots lost a half cent the next week, dropping to 39.50-40.00 cents, then climbed to 40.625-41.50 cents as October closed. The first week of November prices were higher by 1.5 cents to 42.125-42.375 cents. This week trading has backed off to 38.25-38.875 cents.