Posted on 04/08/2015 4:25:04 AM PDT by thackney
Enterprise Products Partners has expanded its liquefied petroleum gas export terminal at the Houston Ship Channel, bolstering its ability to ship more supercooled propane to buyers overseas.
The Houston-based midstream company announced the project two years ago to capitalize on the vast supplies of cheap natural gas unlocked by the U.S. shale boom. Enterprise said it wanted to give producers better access to international markets, in turn, giving U.S. oil companies more of an incentive to continue pumping gas from the ground.
“We have such a strong production in the U.S. that it’s actually outpacing domestic demand,” Enterprise spokesman Rick Rainey said in an interview with FuelFix. “(The gas) has to have a market to ensure production continues in the U.S. and global markets are providing that outlet for the additional volumes.”
Despite the collapse in global oil prices, Enterprise has chugged forward with plans to chill and export more LPG onto the global market. The company this week said it has finished the first phase, which entailed enhancing existing refrigeration to boost its loading capacity by 1.5 million barrels per month, or enough to fill three additional ships.
Work continues on the second phase. Enterprise plans to add a new refrigeration train, which will increase the terminal’s loading capacity to 16 million barrels per month, enough to fill 29 vessels, the company said. That project should be finished at the end of this year.
The company did not disclose the project’s cost.
“With these expansion projects, Enterprise is demonstrating a commitment to supporting the producers who have done a miraculous job of developing our domestic reserves, particularly in the shale basins across the country,” A.J. “Jim” Teague, chief operating officer of the Enterprise’s general partner said in a statement.
The company has scheduled 1,800 cargoes through 2024 to carry chilled propane from Houston to destinations overseas. Enterprise said its LPG terminal has helped establish the United States as the largest propane exporter in the world.
Although U.S. propane prices remain relatively cheap, the crude price plunge has pushed down prices for crude substitutes in foreign countries, making it less attractive to export U.S. gas. However, Enterprise’s risk is limited because the company locked in long-term contracts, Raymond James analysts said.
Enterprise has been supplying the terminal with natural gas liquids unlocked from the Eagle Ford Shale in South Texas. The gas is first sent to Mont Belvieu, where Enterprise’s fractionators break it down into propane, butane and ethane, which is then piped in to the Houston Ship Channel.
The company is adding another pipeline which will run from Mont Belvieu to the terminal, ensuring “adquate supply to the docks,” Enterprise said in a statement. That pipeline is slated to be finished this month, Rainey said.
Does that mean we have so much propane now, higher prices aren’t likely if we see another wet season which requires higher quantities of propane to dry crops?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.