- LPG Trade Growth Slows, But US Exports Surge.
- US Terminals Under Pressure as LPG Exports Hit Record Highs.
- Terminal Fees Reach New Highs Due to Capacity Strains.
Global LPG trade is only expected to increase by 1.4% in 2025, whereas US LPG exports will increase by 6%, based on Drewry’s most recent LPG Forecaster. US LPG exports saw a 14% rise in 2024, pushing terminals to the maximum, which led to increased terminal charges and reduced US-Asia arbitrage. Nonetheless, continuous terminal expansions are poised to boost US export capacity starting from the second half of 2025 (2H25), reports Drewry.
Export Terminals Stretched Thin With Increasing Demand
US NGL production plant expansions combined with flat domestic demand resulted in increasing inventory levels. At the same time, China’s PDH plants underpinned strong US export demand during 2024, leading to a 13.7% increase in exports to 65.7 million tonnes. This growth had US export terminals running at or above capacity over the last two years.
Terminal Fees Reach All-Time Highs in 2024
With minimal spare capacity, weather disruptions and maintenance delays compounded operations, pushing terminal fees sharply higher. Terminal fees for US Gulf Coast terminals’ VLGC loadings reached a record $165 per tonne in September 2024, even eclipsing the US-Japan spot freight rates.
Narrowing US-Asia Arbitrage
Terminal fees being high, coupled with low Mt. Belvieu propane prices and unstable VLGC spot rates, maintained the US-Asia arbitrage snug. Weather-related risks contributed to further volatility—Mt. Belvieu prices spiked 15% MoM during January 2024 to $467 per tonne because of a cold snap impacting vessel loadings. Likewise, during May to September, hurricanes and storms resulted in shipment delays and spot cargo premiums.
Terminal Expansions Underway to Ease Capacity Pressure
Energy Transfer is constructing 250 kbpd of additional NGL export capacity at the Nederland terminal in mid-2025, chiefly for LPG and ethane exports. It is also redesigning the Marcus Hook terminal to increase NGL capacity, expected to be complete in 2H25.
Enterprise Products is building a new LPG and ethane terminal on the Neches River:
- Phase 1 (end-2025): 120 kbpd ethane refrigeration train + 900,000-barrel refrigerated ethane tank.
- Phase 2 (1H26): Versatile 180 kbps ethane or 360 kbps LPG export capacity.
Other Houston Ship Channel expansion to enhance propane and butane export capacity by end-2026. ONEOK, Inc. and MPLX LP are co-developing a 400 kbps LPG export terminal in Texas, as well as a new 24-inch pipeline from Mont Belvieu, to be completed in early 2028.
Impact of Expansions on Export Capacity and Market Dynamics
Shift in Emphasis to Ethane and Loading Flexibility
The new projects focus on ethane export capacity and loading flexibility among propane, butane, and ethane, unlike earlier expansions. Upon completion, the expansions will raise US Gulf Coast LPG export capacity to 100 mtpa by 2029 from 60 mtpa currently.
Short-Term Export Challenges Remain
Even with these extensions, maximum capacity will be gradual, and terminal expansions will fall behind growth in exports in the short term. In 2025, the terminals will continue to be run at maximum levels of utilization, resulting in:
- Continuously elevated terminal fees
- Limited availability of spot cargoes in 1H25
- Export bottlenecks until the Nederland terminal starts
Supply Outlook for 2025
US LPG supply and exports will be constrained in 1H25. But as the new terminals become operational, capacity for exports will rise, releasing the constraint in US LPG supply.
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Source: Drewry
