- Houston — The first VLGC powered by liquefied petroleum gas was headed toward the Panama Canal on Dec. 17.
- It was loaded at Enterprise Products Partners’ hydrocarbon terminal on the Houston Ship Channel.
Already the world’s largest propane exporter, Enterprise’s achievement provides another demand source for US shale supplies by allowing large vessels to refuel with LPG at the loading dock instead of making an additional stop at a bunkering facility, says an article published on S&P Global.
Greener option
Amid the global energy transition to cleaner-burning renewable energy, Enterprise also sees increased exports of LPG and use of LPG in fueling vessels as a way to cut carbon emissions when compared with using carbon-intensive sources such as coal and wood. It said in October that LPG export demand, particularly to Asia, has remained resilient despite the market shocks from the coronavirus pandemic.
The Very Large Gas Carrier BW Gemini departed Dec. 13 from Enterprise’s terminal, according to cFlow. It was loaded with 590,000 barrels of LPG, including cargo and fuel.
Production and rates
LPG prices and freight rates rose in November as the Northern hemisphere prepared for residential and commercial demand this winter and demand was boosted by patio heaters for outdoors social distancing employed due to the pandemic.
The US exported over 1.8 million b/d of LPG for a week at the end of November, exceeding the all-time record of 1.75 million b/d set earlier in the summer, according to Platts Analytics. US Energy Information Administration data showed propane exports climbed 9,000 b/d to 1.36 million b/d for the week ended Dec. 11, remaining above 1 million b/d for a 13th consecutive week and averaging 1.27 million b/d during that period. This high volume likely represents strong demand for propane for on-purpose production of propylene and butane demand for winter gasoline blending.
Overall global NGL supply for 2020 is expected to come in just 2% lower than 2019 as production curtailments in the US and OPEC+ cuts ease. However, global supply will not return to 2019 levels until 2023, primarily due to the decline in US shale production expected in 2021, according to Platts Analytics.
Price signals
In December non-LST propane, reflecting barrels at the Enterprise NGL storage and fractionation facility in Mont Belvieu, Texas, was at 63.25 cents/gal Dec. 16, a year-to-date high and up 1.75 cents day on day.
Very Large Gas Carrier freight rates out of the US Gulf Coast to Japan up $5/mt to $165/mt Dec. 16, with the Houston-Japan freight last assessed higher at $170/mt on Nov. 6, 2015. Freight from Houston to Europe climbed $2/mt to $92/mt day on day, the highest since $95/mt on July 24, 2015.
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Source: S&P Global
