Frac Spread: With Great LPG Supply Comes Great Exportability

Oil and Gas Investor:

The U.S. and Canada will produce about 3 million barrels per day (MMbbl/d) of LPG this year, a 200,000 bbl/d increase over 2017, with ESAI Energy LLC expecting considerable growth in 2019.

All told, output should rise by about 400,000 bbl/d from 2017 to 2019, said Andrew Reed, principal of ESAI Energy, during an Aug. 15 webinar. Of that 3 million bbl/d of production, exports of 1.1 million bbl/d are split between the Atlantic Basin and Asian markets.

Export Infrastructure to Strand U.S. LPG This Winter

Hellenic Shipping News:

The growth of U.S. LPG exports will outpace terminal capacity this winter, constraining LPG exports, according to ESAI Energy’s webinar U.S. Growing Pains to Upend LPG Trade & Demand. The export constraint will temporarily cause scarcity in Asia and the international market, driving up LPG prices relative to naphtha and causing feedstock switching in the petchem sector. Meanwhile, stranded LPG in the U.S. will push down LPG prices relative to ethane in the Gulf Coast, making propane a more attractive feedstock in that market.