American Oil and Gas Reporter - April 2018 - 85

AMERICA: THE ENERGY SUPERPOWER
FIGURE 4
U.S. LPG Export Forecast versus Terminal Capacity
50
45
40
35
30
MMt

International market prices, on the
other hand, were being set by local fundamentals. The spread between U.S. and
international prices widened considerably
and those who could get their hands on
U.S. propane were making huge margins
compared with those buying on the local
market or from the Middle East. At its
highest point in 2013, the spread between
delivered U.S. material into Asia and
local Asia spot prices was more than
$0.76 a gallon (Figure 3).
As U.S. terminal capacity increased,
and the U.S. market bottleneck was eliminated, the spread between U.S. and
Asian prices narrowed to the point where
those who had signed contracts with
U.S. exporters were losing money compared with those buying LPG at local
prices. The contracts out of the United
States mostly were based on local U.S.
Mont Belvieu prices plus a fee for the
terminal and shipping, and the ratio of
propane to crude increased to more than
60 percent in 2017. Today, the spread
between delivered U.S. material into
Asia and local Asia spot prices is negative
at -$0.16 a gallon.
Even with the challenging economics,
however, U.S. material continues to leave
the country. Buyers under contract have,
by and large, been honoring those commitments. There are several cargo cancellations each month and some contracts
have been renegotiated. But at the end
of the day, international markets have
come to depend on U.S. volumes to
meet their needs in the petrochemical
and, to a lesser extent, residential and
commercial segments.
Current export capacity is sufficient
to meet market requirements through
2020; however, after that, space will become tight and expansions will be required

25
20
15
10
5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
U.S. Exports

to keep the U.S. LPG market balanced
and material flowing to hungry international markets (Figure 4). If U.S. production outpaces current forecasts, however, additional investments may be required earlier.
Challenges Beyond 2020
In 2018 and 2019, U.S. NGL market
dynamics are expected to be relatively
stable. U.S. LPG exports are expected to
continue growing, hampered only by
challenges from the economics of the
spread between U.S. and international
prices. With increasing production, the
material will be available to ship. Ethane
prices are expected to inch higher as demand expands from the new ethylene
projects coming on line.
Beyond 2020, however, the market
will begin to shift. In the absence of another wave of ethylene units or expanded
ethane export terminal capacity, the ethane
market will go long again and prices

U.S. Terminal Capacity

once again will dive as the rejected
volume ascends. The main question facing
petrochemical firms will be whether the
chemical market can absorb additional
ethylene from new projects and whether
the economics of these plants justifies
their construction.
From an export perspective, new terminal projects will be required. If they
are not built, the U.S. market once again
will loosen and prices will weaken,
which may be enough to incentivize
new construction based on international
interest. Asian and European players,
however, will be much less likely to
strike deals with large terminal fees as
they did last time.
Domestically, once the Permian projects
and additional fractionation units at Mont
Belvieu are constructed, there should be
ample infrastructure to handle increasing
production. Bottlenecks are possible in
places where production ramps up unexpectedly.
r

Kristen Holmquist is the Manager of Forecasting at Poten & Partners where she focuses
on global LPG and LNG short-term forecasting. Prior to joining Poten, she was the director of NGLs at Ponderosa Advisors (now DrillingInfo) and Bentek Energy (now Platts).
Holmquist has 14 years of industry experience performing supply/demand and pricing
fundamentals analysis on U.S. ethylene, U.S. NGL and international LPG markets.

KRISTEN
HOLMQUIST
APRIL 2018 85



American Oil and Gas Reporter - April 2018

Table of Contents for the Digital Edition of American Oil and Gas Reporter - April 2018

Contents
American Oil and Gas Reporter - April 2018 - 1
American Oil and Gas Reporter - April 2018 - 1
American Oil and Gas Reporter - April 2018 - 2
American Oil and Gas Reporter - April 2018 - Contents
American Oil and Gas Reporter - April 2018 - 4
American Oil and Gas Reporter - April 2018 - 5
American Oil and Gas Reporter - April 2018 - 6
American Oil and Gas Reporter - April 2018 - 7
American Oil and Gas Reporter - April 2018 - 8
American Oil and Gas Reporter - April 2018 - 9
American Oil and Gas Reporter - April 2018 - 10
American Oil and Gas Reporter - April 2018 - 11
American Oil and Gas Reporter - April 2018 - 12
American Oil and Gas Reporter - April 2018 - 13
American Oil and Gas Reporter - April 2018 - 14
American Oil and Gas Reporter - April 2018 - 15
American Oil and Gas Reporter - April 2018 - 16
American Oil and Gas Reporter - April 2018 - 17
American Oil and Gas Reporter - April 2018 - 18
American Oil and Gas Reporter - April 2018 - 19
American Oil and Gas Reporter - April 2018 - 20
American Oil and Gas Reporter - April 2018 - 21
American Oil and Gas Reporter - April 2018 - 22
American Oil and Gas Reporter - April 2018 - 23
American Oil and Gas Reporter - April 2018 - 24
American Oil and Gas Reporter - April 2018 - 25
American Oil and Gas Reporter - April 2018 - 26
American Oil and Gas Reporter - April 2018 - 27
American Oil and Gas Reporter - April 2018 - 28
American Oil and Gas Reporter - April 2018 - 29
American Oil and Gas Reporter - April 2018 - 30
American Oil and Gas Reporter - April 2018 - 31
American Oil and Gas Reporter - April 2018 - 32
American Oil and Gas Reporter - April 2018 - 33
American Oil and Gas Reporter - April 2018 - 34
American Oil and Gas Reporter - April 2018 - 35
American Oil and Gas Reporter - April 2018 - 36
American Oil and Gas Reporter - April 2018 - 37
American Oil and Gas Reporter - April 2018 - 38
American Oil and Gas Reporter - April 2018 - 39
American Oil and Gas Reporter - April 2018 - 40
American Oil and Gas Reporter - April 2018 - 41
American Oil and Gas Reporter - April 2018 - 42
American Oil and Gas Reporter - April 2018 - 43
American Oil and Gas Reporter - April 2018 - 44
American Oil and Gas Reporter - April 2018 - 45
American Oil and Gas Reporter - April 2018 - 46
American Oil and Gas Reporter - April 2018 - 47
American Oil and Gas Reporter - April 2018 - 48
American Oil and Gas Reporter - April 2018 - 49
American Oil and Gas Reporter - April 2018 - 50
American Oil and Gas Reporter - April 2018 - 50A
American Oil and Gas Reporter - April 2018 - 50B
American Oil and Gas Reporter - April 2018 - 50C
American Oil and Gas Reporter - April 2018 - 50D
American Oil and Gas Reporter - April 2018 - 51
American Oil and Gas Reporter - April 2018 - 52
American Oil and Gas Reporter - April 2018 - 53
American Oil and Gas Reporter - April 2018 - 54
American Oil and Gas Reporter - April 2018 - 55
American Oil and Gas Reporter - April 2018 - 56
American Oil and Gas Reporter - April 2018 - 57
American Oil and Gas Reporter - April 2018 - 58
American Oil and Gas Reporter - April 2018 - 59
American Oil and Gas Reporter - April 2018 - 60
American Oil and Gas Reporter - April 2018 - 61
American Oil and Gas Reporter - April 2018 - 62
American Oil and Gas Reporter - April 2018 - 63
American Oil and Gas Reporter - April 2018 - 64
American Oil and Gas Reporter - April 2018 - 65
American Oil and Gas Reporter - April 2018 - 66
American Oil and Gas Reporter - April 2018 - 67
American Oil and Gas Reporter - April 2018 - 68
American Oil and Gas Reporter - April 2018 - 69
American Oil and Gas Reporter - April 2018 - 70
American Oil and Gas Reporter - April 2018 - 71
American Oil and Gas Reporter - April 2018 - 72
American Oil and Gas Reporter - April 2018 - 73
American Oil and Gas Reporter - April 2018 - 74
American Oil and Gas Reporter - April 2018 - 75
American Oil and Gas Reporter - April 2018 - 76
American Oil and Gas Reporter - April 2018 - 77
American Oil and Gas Reporter - April 2018 - 78
American Oil and Gas Reporter - April 2018 - 79
American Oil and Gas Reporter - April 2018 - 80
American Oil and Gas Reporter - April 2018 - 81
American Oil and Gas Reporter - April 2018 - 82
American Oil and Gas Reporter - April 2018 - 83
American Oil and Gas Reporter - April 2018 - 84
American Oil and Gas Reporter - April 2018 - 85
American Oil and Gas Reporter - April 2018 - 86
American Oil and Gas Reporter - April 2018 - 87
American Oil and Gas Reporter - April 2018 - 88
American Oil and Gas Reporter - April 2018 - 89
American Oil and Gas Reporter - April 2018 - 90
American Oil and Gas Reporter - April 2018 - 91
American Oil and Gas Reporter - April 2018 - 92
American Oil and Gas Reporter - April 2018 - 93
American Oil and Gas Reporter - April 2018 - 94
American Oil and Gas Reporter - April 2018 - 95
American Oil and Gas Reporter - April 2018 - 96
American Oil and Gas Reporter - April 2018 - 97
American Oil and Gas Reporter - April 2018 - 98
American Oil and Gas Reporter - April 2018 - 99
American Oil and Gas Reporter - April 2018 - 100
American Oil and Gas Reporter - April 2018 - 101
American Oil and Gas Reporter - April 2018 - 102
American Oil and Gas Reporter - April 2018 - 103
American Oil and Gas Reporter - April 2018 - 104
American Oil and Gas Reporter - April 2018 - 105
American Oil and Gas Reporter - April 2018 - 106
American Oil and Gas Reporter - April 2018 - 107
American Oil and Gas Reporter - April 2018 - 108
American Oil and Gas Reporter - April 2018 - 109
American Oil and Gas Reporter - April 2018 - 110
American Oil and Gas Reporter - April 2018 - 111
American Oil and Gas Reporter - April 2018 - 112
American Oil and Gas Reporter - April 2018 - 113
American Oil and Gas Reporter - April 2018 - 114
American Oil and Gas Reporter - April 2018 - 115
American Oil and Gas Reporter - April 2018 - 116
American Oil and Gas Reporter - April 2018 - 117
American Oil and Gas Reporter - April 2018 - 118
American Oil and Gas Reporter - April 2018 - 119
American Oil and Gas Reporter - April 2018 - 120
American Oil and Gas Reporter - April 2018 - 121
American Oil and Gas Reporter - April 2018 - 122
American Oil and Gas Reporter - April 2018 - 123
American Oil and Gas Reporter - April 2018 - 124
American Oil and Gas Reporter - April 2018 - 125
American Oil and Gas Reporter - April 2018 - 126
American Oil and Gas Reporter - April 2018 - 127
American Oil and Gas Reporter - April 2018 - 128
American Oil and Gas Reporter - April 2018 - 129
American Oil and Gas Reporter - April 2018 - 130
American Oil and Gas Reporter - April 2018 - 131
American Oil and Gas Reporter - April 2018 - 132
American Oil and Gas Reporter - April 2018 - 133
American Oil and Gas Reporter - April 2018 - 134
American Oil and Gas Reporter - April 2018 - 135
American Oil and Gas Reporter - April 2018 - 136
American Oil and Gas Reporter - April 2018 - 137
American Oil and Gas Reporter - April 2018 - 138
American Oil and Gas Reporter - April 2018 - 139
American Oil and Gas Reporter - April 2018 - 140
American Oil and Gas Reporter - April 2018 - 141
American Oil and Gas Reporter - April 2018 - 142
American Oil and Gas Reporter - April 2018 - 143
American Oil and Gas Reporter - April 2018 - 144
American Oil and Gas Reporter - April 2018 - 145
American Oil and Gas Reporter - April 2018 - 146
American Oil and Gas Reporter - April 2018 - 147
American Oil and Gas Reporter - April 2018 - 148
American Oil and Gas Reporter - April 2018 - 149
American Oil and Gas Reporter - April 2018 - 150
American Oil and Gas Reporter - April 2018 - 151
American Oil and Gas Reporter - April 2018 - 152
American Oil and Gas Reporter - April 2018 - 153
American Oil and Gas Reporter - April 2018 - 154
American Oil and Gas Reporter - April 2018 - 155
American Oil and Gas Reporter - April 2018 - 156
American Oil and Gas Reporter - April 2018 - 157
American Oil and Gas Reporter - April 2018 - 158
American Oil and Gas Reporter - April 2018 - 159
American Oil and Gas Reporter - April 2018 - 160
American Oil and Gas Reporter - April 2018 - 161
American Oil and Gas Reporter - April 2018 - 162
American Oil and Gas Reporter - April 2018 - 163
American Oil and Gas Reporter - April 2018 - 164
American Oil and Gas Reporter - April 2018 - 165
American Oil and Gas Reporter - April 2018 - 166
American Oil and Gas Reporter - April 2018 - 167
American Oil and Gas Reporter - April 2018 - 168
American Oil and Gas Reporter - April 2018 - 169
American Oil and Gas Reporter - April 2018 - 170
American Oil and Gas Reporter - April 2018 - 171
American Oil and Gas Reporter - April 2018 - 172
American Oil and Gas Reporter - April 2018 - 173
American Oil and Gas Reporter - April 2018 - 174
American Oil and Gas Reporter - April 2018 - 175
American Oil and Gas Reporter - April 2018 - 176
American Oil and Gas Reporter - April 2018 - 177
American Oil and Gas Reporter - April 2018 - 178
American Oil and Gas Reporter - April 2018 - 179
American Oil and Gas Reporter - April 2018 - 180
http://www.nxtbook.com/nxtbooks/aogr/201911
http://www.nxtbook.com/nxtbooks/aogr/201910
http://www.nxtbook.com/nxtbooks/aogr/201909
http://www.nxtbook.com/nxtbooks/aogr/201908
http://www.nxtbook.com/nxtbooks/aogr/201907
http://www.nxtbook.com/nxtbooks/aogr/201906
http://www.nxtbook.com/nxtbooks/aogr/201905
http://www.nxtbook.com/nxtbooks/aogr/201904
http://www.nxtbook.com/nxtbooks/aogr/201903
http://www.nxtbook.com/nxtbooks/aogr/201902
http://www.nxtbook.com/nxtbooks/aogr/201901
http://www.nxtbook.com/nxtbooks/aogr/201812
http://www.nxtbook.com/nxtbooks/aogr/201811
http://www.nxtbook.com/nxtbooks/aogr/201810
http://www.nxtbook.com/nxtbooks/aogr/pbios_201810
http://www.nxtbook.com/nxtbooks/aogr/201809
http://www.nxtbook.com/nxtbooks/aogr/201808
http://www.nxtbook.com/nxtbooks/aogr/201807
http://www.nxtbook.com/nxtbooks/aogr/201806
http://www.nxtbook.com/nxtbooks/aogr/201805
http://www.nxtbook.com/nxtbooks/aogr/201804
http://www.nxtbook.com/nxtbooks/aogr/201803
http://www.nxtbook.com/nxtbooks/aogr/201802
http://www.nxtbook.com/nxtbooks/aogr/201801
http://www.nxtbook.com/nxtbooks/aogr/201712
http://www.nxtbook.com/nxtbooks/aogr/201711
http://www.nxtbook.com/nxtbooks/aogr/201710
http://www.nxtbook.com/nxtbooks/aogr/201709
http://www.nxtbook.com/nxtbooks/aogr/201708
http://www.nxtbook.com/nxtbooks/aogr/201707
http://www.nxtbook.com/nxtbooks/aogr/201706
http://www.nxtbook.com/nxtbooks/aogr/201705
http://www.nxtbook.com/nxtbooks/aogr/201704
http://www.nxtbook.com/nxtbooks/aogr/201703
http://www.nxtbook.com/nxtbooks/aogr/201702
http://www.nxtbook.com/nxtbooks/aogr/201701
http://www.nxtbook.com/nxtbooks/aogr/201612
http://www.nxtbook.com/nxtbooks/aogr/201611
http://www.nxtbook.com/nxtbooks/aogr/201610
http://www.nxtbook.com/nxtbooks/aogr/pbios2016_programguide
http://www.nxtbook.com/nxtbooks/aogr/201609
http://www.nxtbook.com/nxtbooks/aogr/201608
http://www.nxtbook.com/nxtbooks/aogr/201607
http://www.nxtbook.com/nxtbooks/aogr/201606
http://www.nxtbook.com/nxtbooks/aogr/201605
http://www.nxtbook.com/nxtbooks/aogr/201604
http://www.nxtbook.com/nxtbooks/aogr/201603
http://www.nxtbook.com/nxtbooks/aogr/201602
http://www.nxtbook.com/nxtbooks/aogr/201601
http://www.nxtbook.com/nxtbooks/aogr/201512
http://www.nxtbook.com/nxtbooks/aogr/201511
http://www.nxtbook.com/nxtbooks/aogr/201510
http://www.nxtbook.com/nxtbooks/aogr/201509
http://www.nxtbook.com/nxtbooks/aogr/201508
http://www.nxtbook.com/nxtbooks/aogr/201507
http://www.nxtbook.com/nxtbooks/aogr/201506
http://www.nxtbook.com/nxtbooks/aogr/201505
http://www.nxtbook.com/nxtbooks/aogr/201504
http://www.nxtbook.com/nxtbooks/aogr/201503
http://www.nxtbook.com/nxtbooks/aogr/201502
http://www.nxtbook.com/nxtbooks/aogr/201501
http://www.nxtbook.com/nxtbooks/aogr/201412
http://www.nxtbook.com/nxtbooks/aogr/201411
http://www.nxtbook.com/nxtbooks/aogr/201410
http://www.nxtbook.com/nxtbooks/aogr/201409
http://www.nxtbook.com/nxtbooks/aogr/pbios2014_programguide
http://www.nxtbook.com/nxtbooks/aogr/201408
http://www.nxtbook.com/nxtbooks/aogr/201407
http://www.nxtbook.com/nxtbooks/aogr/201406
http://www.nxtbook.com/nxtbooks/aogr/201405
http://www.nxtbook.com/nxtbooks/aogr/201404
http://www.nxtbook.com/nxtbooks/aogr/201403
http://www.nxtbook.com/nxtbooks/aogr/201402
http://www.nxtbook.com/nxtbooks/aogr/201401
http://www.nxtbook.com/nxtbooks/aogr/201312
http://www.nxtbook.com/nxtbooks/aogr/201311
http://www.nxtbook.com/nxtbooks/aogr/201310
http://www.nxtbook.com/nxtbooks/aogr/201309
http://www.nxtbook.com/nxtbooks/aogr/201308
http://www.nxtbook.com/nxtbooks/aogr/201307
http://www.nxtbook.com/nxtbooks/aogr/201306
http://www.nxtbook.com/nxtbooks/aogr/201305
http://www.nxtbook.com/nxtbooks/aogr/201304
http://www.nxtbook.com/nxtbooks/aogr/201303
http://www.nxtbook.com/nxtbooks/aogr/201302
http://www.nxtbook.com/nxtbooks/aogr/201301
http://www.nxtbook.com/nxtbooks/aogr/201212
http://www.nxtbook.com/nxtbooks/aogr/201211
http://www.nxtbook.com/nxtbooks/aogr/201210
http://www.nxtbook.com/nxtbooks/aogr/201209
http://www.nxtbook.com/nxtbooks/aogr/2012_pbios
http://www.nxtbook.com/nxtbooks/aogr/201208
http://www.nxtbook.com/nxtbooks/aogr/201207
http://www.nxtbook.com/nxtbooks/aogr/201206
http://www.nxtbook.com/nxtbooks/aogr/201205
http://www.nxtbook.com/nxtbooks/aogr/201204
http://www.nxtbook.com/nxtbooks/aogr/201203
http://www.nxtbook.com/nxtbooks/aogr/201202
http://www.nxtbook.com/nxtbooks/aogr/201201
http://www.nxtbook.com/nxtbooks/demo/aogr_clone
http://www.nxtbook.com/nxtbooks/aogr/201112
http://www.nxtbookMEDIA.com