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LPG & Ethane Shipments Thru Panama Canal Pick Up in January

Last November, MDN warned you about delays with LPG (propane) and LNG ships transiting the Panama Canal (see Drought Along Panama Canal Causing Delays in Propane, LNG Exports). According to the Panama Canal Authority (APC), water levels at Gatún Lake were the lowest since at least 1995 due to an extended dry season and lower-than-normal precipitation on the Panama Canal. Gatún Lake is the artificial lake that vessels pass through to transit between the Atlantic and Pacific locks, and it holds the water supply needed to operate the lock systems of the canal. The situation got to the point that the APC began auctioning slots to use the canal (see LNG Vessels Transiting Panama Canal Must Use Auction for Time Slots). Good news! While the drought continues, it’s less worse than it was, and U.S. energy shipments through the Canal have increased once again.
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Record High NGL Exports from Marcus Hook, ET Expanding Facility

Marcus Hook Marine Terminal Near Philadelphia. Source: Energy Transfer

Pipeline giant Energy Transfer (ET), owner of the Mariner East Pipeline system, the Marcus Hook NGL terminal, and the Rover pipeline in the Marcellus/Utica region, issued its fourth quarter and full-year 2023 update yesterday. Net income for 4Q23 was $1.57 billion, up 9% from 4Q22’s $1.44 billion. However, net income for 2023 was $5.29 billion, down 10% from 2022’s $5.87 billion. ET is a big company with assets in many oil and gas regions of the U.S. Of interest for us were the comments about the Marcus Hook NGL terminal and its exports.
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LNG Vessels Transiting Panama Canal Must Use Auction for Time Slots

Three weeks ago, MDN warned you about delays with LPG (propane) and LNG ships transiting the Panama Canal (see Drought Along Panama Canal Causing Delays in Propane, LNG Exports). According to the Panama Canal Authority (APC), water levels at Gatún Lake are the lowest since at least 1995 due to an extended dry season and lower-than-normal precipitation on the Panama Canal. Gatún Lake is the artificial lake that vessels pass through to transit between the Atlantic and Pacific locks, and it holds the water supply needed to operate the lock systems of the canal. The situation has grown even more dire in just the last three weeks…
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Drought Along Panama Canal Causing Delays in Propane, LNG Exports

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In early October, we brought you the news that propane (C3H8) was the most-exported U.S. petroleum product in the first half of 2023, averaging 1.5 million barrels per day (b/d), continuing a trend that began in 2020 (see Propane #1 Most Exported U.S. Petroleum Product First Half 2023). U.S. propane exports have been driving increased U.S. petroleum product exports for the past four years. Part of the propane export success story is right here in the Marcellus/Utica (see Marcus Hook Propane Exports Heat Up). However, there is a problem with propane (and even LNG) exports. The Panama Canal, a key link between the U.S. and Japan where much of our propane is shipped, is facing the worst drought in the Canal’s 120-year history.
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Propane #1 Most Exported U.S. Petroleum Product First Half 2023

Although we have a companion story from today’s lineup that criticizes the U.S. Energy Information Administration (EIA) for its powers to predict the future (see EIA Consistently Underestimates NatGas Needed for Power Generation), the EIA is unparalleled in its tracking and reporting of historical energy data. The expert number crunchers of the EIA recently turned their eyes on U.S. petroleum exports and found that these types of exports (including NGLs) set a new record high in the first half of 2023.
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PA DEP Considers Plan to Expand ET’s Marcus Hook Ethane Chilling

On February 14, 2022, Energy Transfer Marketing & Terminals, L.P. (ETMT) applied to expand the company’s ethane chilling capacity at the Marcus Hook Terminal (MHT) from approximately 75,000 barrels per day (bpd) to approximately 85,000 bpd. Because the facility is located in a so-called Environmental Justice (EJ) area, the DEP is conducting an even more painful anal exam (than usual) before issuing a permit for the expansion. Part of that examination will be a public hearing on Sept. 19, 2023, in Boothwyn, PA, from 6:00 – 8:00 p.m.
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UGI Signals Looking to Sell or Spin-Off AmeriGas Propane Subsidiary

UGI, a diversified energy company with midstream (pipeline) operations in the Marcellus and one of PA’s largest utility companies, is looking to sell or spin off its propane subsidiary into a new company. UGI’s propane subsidiary is AmeriGas, the nation’s largest retail propane marketer, serving nearly 1.3 million customers in all 50 states from approximately 1,400 locations. This is pretty big news in our book.
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Illinois Prof Discovers Way to Convert Carbon Dioxide into Propane

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Something crossed our desk that we consider pretty cool. A professor at the Illinois Institute of Technology recently published a paper in the journal Nature Energy that reveals a promising breakthrough in “green” energy. The prof and SHV Energy created an electrolyzer device capable of converting carbon dioxide into propane in a way that is both scalable and cost-effective. The good prof’s invention won’t win him any friends among the irrational left that hates all fossil fuels, including propane. It makes no difference that his system can capture and use any CO2 emitted by burning propane to create more propane. If it’s a fossil fuel, it’s evil (for the left). For the rest of us, it’s an interesting and useful invention.
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How M-U NGLs Get Exported – ET’s Mariner Pipelines & Marcus Hook

NGLs, or natural gas liquids, are an essential revenue stream for Marcellus/Utica drillers in the “wet gas” regions of the play. Those regions are found in southwestern Pennsylvania, the northern panhandle of West Virginia, and eastern Ohio. There are several pipelines that flow M-U NGLs to other regions or to export facilities. Among them is Enterprise Products Partners’ 1,230-mile Appalachia to Texas Express (ATEX) pipeline to the Gulf Coast, and Kinder Morgan’s 270-mile Utica-to-Ontario-Pipeline-Access (UTOPIA) pipeline from Harrison County, Ohio, to Windsor in Canada’s Ontario province. However, most M-U NGLs travel through Energy Transfer’s Mariner East and West pipelines, with Mariner East flowing to the Marcus Hook export terminal near Philadelphia.
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US Propane Consumption for Winter 2022-23 Lowest Since 2010

As we explained a few weeks ago, balancing supply and demand in the propane market is challenging (see Crude & NatGas Drilling Slowing, Which Affects Propane Supplies). The problem/issue with propane (or ethane, or butane, really any NGL) is that propane and other NGLs are derivatives of oil and gas drilling. Nobody sinks a hole in the ground explicitly trying to extract propane. It comes out of the ground along with oil and natural gas. To accurately guess the coming supply of propane, one has to monitor whether oil and gas drilling is going up or down. And then there’s the demand side…
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Crude & NatGas Drilling Slowing, Which Affects Propane Supplies

Commodities like oil and natural gas are just about the purest form of free market capitalism on the planet. They are textbook supply-and-demand commodities. When supply goes up or down, given the same demand, the price for the commodity will go up or down inversely. It doesn’t take long for the markets to “balance.” The same on the demand side. If demand goes up or down and supply stays the same, the price will go up or down. But what about propane? The propane market is different and much harder to predict.
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PA & TX Congressmen Tour Philly’s Marcus Hook NGL Facility

Marcus Hook complex (click for larger version)

U.S. Congressman Dan Meuser (PA-09) joined Congressman Troy Nehls (TX-22) for a roundtable discussion and tour of Energy Transfer’s Marcus Hook facility near Philadelphia last week. Marcus Hook is where the mighty Mariner East pipeline system terminates. Mariner East flows natural gas liquids (NGLs), including ethane, propane, and butane, to the Marcus Hook refinery, where a fractionator separates them into their respective hydrocarbon streams. The various NGLs are then (mostly) loaded onto ships and exported. The entire system–the pipeline and the refinery–is a marvel. Meuser and Nehls were there to learn more about it.
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WVU Researcher Looks for Way to Convert Shale Ethane to Olefins

Madelyn Ball, WVU researcher

Natural gas is a booming industry in West Virginia and the United States, accounting for more than 38% of the nation’s total energy consumption. One West Virginia University researcher is hoping to capitalize on valuable untapped chemicals that come from shale gas, commonly found throughout the Marcellus/Utica region. Madelyn Ball, an assistant professor of chemical and biomedical engineering at WVU’s Statler College of Engineering and Mineral Resources, received $110,000 in funding from the American Chemical Society to conduct research that will convert ethane and propane from shale gas into olefins, a class of chemicals made up of hydrogen and carbon such as ethylene and propylene, that can be used in the production of plastics and other complex chemicals.
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$150M Manufacturing Plant Coming to WV, Cites M-U NGLs as Reason

Some exciting news out of West Virginia to share. During last evening’s State of the State address, WV Gov. Jim Justice announced TCL Specialties, a subsidiary of TCL (Thirumalai Chemicals Limited), which is based in India, will break ground this month for two manufacturing facilities in Marshall County, West Virginia. The company will invest $150 million to build the first (of three) phases, manufacturing chemicals and food ingredients. And guess what most of the feedstock (raw inputs) will be for these new plants? NGLs (natural gas liquids) from the Marcellus/Utica.
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Revolution Cryogenic Plant Partially Restarts Following Explosion

Residents living in the vicinity of Energy Transfer’s Revolution Pipeline cryogenic plant in Bulger (Washington County), PA, got a nasty “present” on Christmas morning. Around 7:30 am, residents report hearing an explosion, followed by a fire, at the plant used to separate NGLs (natural gas liquids, including ethane, propane, and butane) from the raw gas stream that flows through the Revolution gathering pipeline (see ET Revolution Cryogenic Processing Plant Explodes in PA on Xmas). The good news is that the plant has resumed “partial operations.”
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How New Shell Cracker Affects Ethane/NGL Markets in Northeast

Here in the real world (not the pretend world of leftist radicals who seek to shut down all fossil energy), the Shell ethane cracker finally went online, officially, last week (see Shell Officially Launches Pa. Cracker Plant Using M-U Ethane). The plant will use some 95,000 barrels of ethane per day when it is at 100% capacity–likely next year. So how is the new Shell cracker affecting the NGL markets in the northeast and beyond?
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