(Source: Shutterstock)
The completion of the Panama Canal’s third set of locks in 2016 unlocked a spike in propane exports from the U.S. Gulf Coast to Asian markets, the U.S. Energy Information Administration reported on April 29.
Within seven months of the opening, monthly propane exports shot up 49% to set a record of more than 34 million barrels. That mark was eclipsed in December 2018.
Very Large Gas Carriers (VLGC) are the most economical way to transport by water, the EIA said. The vessels typically can carry from 75,000 to 85,000 cubic meters of cargo. There are 266 in service, with 22 expected to be delivered this year and another 14 in 2020, which about doubles the global fleet from 2015.
Data from VesselsValue show that in 2020, VLGC will constitute only 20% of the global LPG tanker fleet, but will account for two-thirds of the fleet’s cargo capacity.
The EIA established a definition, hydrocarbon gas liquids (HGL), to refer to both NGL and olefins.
“The growth in HGLs transiting the Panama Canal coincided with an increase in exports of HGLs from the U.S. Gulf Coast to destinations mostly in Asia,” EIA said. “In 2018, four of the five largest destinations for U.S. Gulf Coast exports of HGLs were in Asia, with Japan being the largest at 280,000 [barrels per day (bbl/d)].”
The project completed in 2016 was the first major expansion of the canal since it began service in 1914. It did not have the same dramatic impact on U.S. crude oil shipments because the most commonly used tankers to move crude—Very Large Crude Carriers (VLCC) and Ultra-Large Crude Carriers (ULCC)—cannot fit through the canal.
VLCCs can carry as much as 2.2 million barrels but the canal, even after its expansion, can only handle vessels with capacity of 400,000 to 600,000 barrels of oil.
Exports of propane have been strong in 2019, despite numerous delays due to fog in the Houston Ship Channel. However, they are not strong enough to counter the buildup in inventory.
Inventory is more than 30% above what it was last year at this time the propane price at Mont Belvieu, Texas, is down 23%.
Recommended Reading
Jefferies: With Permian Locked Up, E&Ps Hunt for New L48 Runway
2024-11-26 - With the core of the Permian Basin largely locked up, “intrepid operators” are hunting for runway in more nascent Lower 48 basins and in less developed Permian benches.
Shale Outlook Uinta: Horizontal Boom to Continue in 2025
2025-01-11 - After two large-scale transactions by SM Energy and Ovintiv, the Uinta Basin is ready for development—and stacked pay exploration.
'A Renewed Look': Central Basin Platform's Old Rock Gains New Interest
2024-10-29 - As majors prune their portfolios to sell non-core assets, M&A activity is heating up on the Permian’s Central Basin Platform and Northwest Shelf—and Ring Energy hopes to be a buyer.
Shale Outlook Eagle Ford: Sustaining the Long Plateau in South Texas
2025-01-08 - The Eagle Ford lacks the growth profile of the Permian Basin, but thoughtful M&A and refrac projects are extending operator inventories.
Diamondback Touts Land, Cheap Gas to Lure Data Centers to Permian
2024-11-05 - With 65,000 land acres, cheap natural gas and an abundant produced water supply, Diamondback wants to lure power-hungry data centers to West Texas.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.