After a few years in the wilderness, and I do mean living on the Isle of Wight by the way, I was quite taken aback one day when two industry jargons were used in a flourish, as if I should have known exactly what they meant, one was “PRONAP” and the other was “FEIMOPJ”. Once I had worked out what they represented, I was then fascinated to know how they traded in the market.
Do you think there’s a chance we might be saying to ourselves next year that “too many cooks spoilt the broth”? I think there’s a pretty good chance we will, especially if the main protagonists, in the U.S. Gulf’s 2020 LPG export trade, have to resort to competing with each other for a greater share of the export pie. The simple facts are that we are going to see a significant increase in fractionation capacity, an increase in export capacity along the U.S. Gulf coast, and an inflow of NGLs from the Permian Basin, aren’t we?
There’s not really a similar sector anywhere in the international oil and gas industry that performs the same role as the “midstream” does in the U.S. market. I can remember my mother would irately say, when I interrupted her for some reason, “don’t stop me in midstream”, otherwise it wasn’t a word often used in the Hill household.
One significant piece of the U.S. LPG export puzzle, taking something of a back seat behind record LPG production, NGL takeaway problems, lack of pipelines, fractionation constraints, Mariner East 2, export terminal expansions, IMO 2020 and the strong VLGC market, to name but a few, is the Panama Canal, which will have to come more into focus, it’s just a matter of time!
We looked a little closer yesterday at what’s driving the natural gas market down, revealing how production was racing away, whilst demand keeps waiting for some consistent hot weather to arrive across the U.S., to start cranking up the air-conditioning units, increasing electricity demand which is heavily fueled by natural gas, and adding some strength to a price that has fallen apart in recent weeks.
Right now, every seller in the U.S. natural gas market is yearning for hot weather, as hot as possible, not because they are looking for a last-minute holiday booking with the family, but because they want to see air conditioning units working at full pelt. In the U.S. they call it cooling demand, and if we don’t see something more positive on the demand side really soon, I’m afraid natural gas prices are going to continue their slide.
There aren’t that many countries I haven’t visited in my 35 years in the LPG industry, but Canada is one of them. Once I got as high as Seattle in Washington, about 100 miles south-east of Victoria, British Colombia, back in my Texaco days, visiting what was then our Ferndale facility. But Canada and its NGLs are certainly back on the map again!
I’m just flying over Newfoundland, Canada on my way back from what’s becoming my second home now - Houston, Texas. I don’t know if you do it when you’re flying, but I tend to think-back on my life, well that is, ever since I stopped flying with a hangover after a big night out doing the compulsory “smooching” with clients. I certainly don’t miss those days, or do I?
Everyday we have our eyes and ears focused on propane. It’s natural as propane is the most common, by far, of the Natural Gas Liquids (NGLs) processed into individual products. This is exacerbated by the fact that a lot of refinery butanes, over history, never actually leave the refinery front gate. My blog U.S.