Energy and commodity price benchmarking and market insights

Transcription

1 Energy and commodity price benchmarking and market insights London, Houston, Washington, New York, Portland, Calgary, Santiago, Bogota, Rio de Janeiro, Singapore, Beijing, Tokyo, Sydney, Dubai, Moscow, Astana, Kiev, Porto and Johannesburg

2 Outlook for US Propane Exports Argus Houston webinar Amy Strahan, editor, NGL Americas April 24, 2013

3 Propane supply outlook

4 US NGL supplies likely growing Crude and shale gas development likely to continue to drive NGL production. Forecasts vary, but NGL supplies expected to remain robust NGL production mn b/d Source: EIA 2012 Annual Energy Outlook

5 Lower 48 shale plays Copyright 2012 Argus Media Ltd. All rights reserved.

6 US exporting more propane than ever Enterprise Terminal o Expansions online in March o 7.5mn bl/m expanded capacity Targa Terminal o Expansions underway o 5mn bl/m expanded capacity Sunoco Mariner East o ~900,000 bl exported in 2012 o 70,000 b/d expanded capacity U.S. Exports of Propane and Propylene ('000 bl/mo) 7,500 6,500 5,500 4,500 3,500 2,500 1, Jan 05 Jan 07 Dec 08 Dec 10 Dec 12 Source: EIA

7 LPG exports in 2012 Mexico 10.8mn bl Central America 1.3mn bl Caribbean - 6mn bl South America 17.3mn bl Europe 6.8 mn bl Far East 3.7mn bl Source: Enterprise Product Partners estimates

8 Domestic oversupply lowers prices Mont Belvieu propane fell to 36pc of WTI during December US inventories remain 20pc over 5-yr average Values strengthened in March, as exports resumed Non-LST Propane % WTI 30 5 Feb Aug 11 9 Mar Sep Apr 13

9 US arbitrage with Europe, Far East narrowing $700 Mont Belvieu v ARA Mont Belvieu v FEI $600 $500 $400 $300 $200 $100 Jan 12 Apr 12 Aug 12 Dec 12 Apr 13

10 Panama Canal expansion impact unknown Canal expansion scheduled for mid 2015 Will cut estimated freight costs by as much as a third, according to some estimates VLGCs will be able to travel from Caribbean to Japan in approximately 11 fewer days, according to the canal authority Photo courtesy of Panama Canal Authority

11 Japanese, Chinese buyers weighing options US prices are currently low, but will the economics make sense beyond 2015? 1,350 1, Jan 12 Apr 12 Aug 12 Dec 12 Apr 13 Propane Argus Far East Index, USD/t, cfr Propane Saudi Aramco CP month 1, USD/t, fob Propane Mt Belvieu Non-LST USD/t, pipeline fob

12 Existing US propane export facilities Copyright 2012 Argus Media Ltd. All rights reserved.

13 LPG export opportunities Current infrastructure may be insufficient New export capacity locked under term contracts Spot cargoes costly for buyers New midstream entrants seeking projects Several new projects announced Market participants speculate on others

14 Announced terminal projects

15 Vitol/Itochu Beaumont, TX Coastal Caverns storage 40 ft draft 3mn bl per month Final investment decision by June 2013 Slated for completion in 2014

16 Sunoco/Lone Star Nederland, TX Lone Star storage 40 draft Five docks connected to refineries, rail facilities Slated for completion in 2015

17 Intercontinental Terminals Co Houston Ship Channel Near Deer Park terminal draft Includes barge, rail access Slated for completion in 2015

18 Buckeye Terminal Perth Amboy, NJ 37 draft 4mn bl total storage Near Linden refinery Four docks, pipeline, rail access

19 Unannounced/prospective terminal plans

20 Occidental Terminal Ingleside, TX 45 draft Supply agreement with DCP s Sand Hills pipeline Near VCM complex Fractionator planned Regulatory permits on file

21 BG Americas Terminal Lake Charles, LA 40 draft Near LNG terminal Unannounced, unconfirmed

22 Vopak Terminal Houston Ship Channel 40 draft Near Deer Park, TX marine terminal handling petrochemical products Unannounced, unconfirmed

23 West coast rumors

24 BP Cherry Point prospects? Ferndale, WA Vancouver Island Waterway Cherry Point produces ~3,000 b/d of propane BP uses the terminal for flow assurance at the refinery Purely speculative

25 AltaGas/Idemitsu Terminal? Kitimat, BC Three deep-sea marine terminals Near Pacific Northern gas pipeline Feasibility study underway Proposed completion by 2016

26 What projects make sense?

27 Requirements for successful projects VLGC access Large vessels require 40 draft LPG storage facilities Access to LPG supplies, fractionators

28 Obstacles to new terminal projects Propane prices Existing players Enterprise considering expansion to 10mn bl/mo Targa s Patriot expansion Buyers willingness to lock in long-term contracts Propane Mt Belvieu Non-LST $USD/t, pipeline fob

29 Any questions?

30 London Houston Washington New York Portland Calgary Santiago Bogota Rio de Janeiro Singapore Beijing Tokyo Sydney Dubai Moscow Astana Kiev Porto Johannesburg