The Houston Ship Channel (HSC) is working around the clock to keep liquefied petroleum gas (LPG) cargoes moving, thanks to a recent change in local maritime rules. Several midstream names are benefiting as LPG exports continue to hit new records.
In November 2023, the Houston Pilots Association, the organization representing marine pilots who ferry boats into and out of the HSC, amended its navigation safety guidelines. The group struck its “no night transit” restriction previously imposed on LPG tankers, allowing all-night pilotage services through the Houston channel. 
Targa Resources (TRGP) and Enterprise Products Partners (EPD) will benefit the most from the change in channel operations, according to East Daley’s NGL Network Model. During 4Q23, TRGP shipped 435 Mb/d of LPGs from its export dock, operating at ~98% utilization (nameplate capacity is ~445 Mb/d). EPD had more room at its Enterprise Hydrocarbons Terminal (EHT), shipping almost 700 Mb/d in 4Q23 vs capacity of 835 Mb/d (84% utilization).
There is some ambiguity around the true operational capacity of LPG docks. Targa notes its monthly export capacity is dependent on propane and butane demand and vessel size, for example. What we know is that capacity is very tight.
The figure shows LPG exports and dock capacity data available in the NGL Network Model. Historical LPG exports out of PADD 3 (the blue-shaded area in the figure) near dock capacity (the black line, all owned by midstream companies) in 2H23. The result is high spot loading fees earned by dock owners, and downside risk to propane prices if growing US NGL supplies cannot reach international demand.
The newfound ability to move LPG vessels 24 hours a day out of Houston is helping mitigate the insufficient dock capacity. Targa said the change to piloting hours will increase the effective capacity of its own dock by 5-10%. Enterprise also acknowledged the ability to move more vessels after the daylight restriction was removed. A 7.5% increase in dock capacity (see the red dashed line in figure) would add ~100 Mb/d of capacity for TGRP and EPD on a combined basis.
This effective capacity increase will alleviate temporary dock tightness next winter before EPD and Energy Transfer (ET) increase dock capacity in 1H25 by 120 Mb/d and 250 Mb/d, respectively. – Rob Wilson, CFA Tickers: EPD, ET, TRGP.
New CAPEX Dashboard Creates Superior Visibility into Midstream Budgets
East Daley is excited to launch our latest product, the CAPEX Dashboard, offering superior visibility into midstream investments. The CAPEX Dashboard provides detailed breakdown of capital projects by commodity, geography and asset type, allowing users to effectively track sector trends, analyze individual companies or compare with peers. Learn more about the CAPEX Dashboard here.
New EDA Product: West Coast Supply & Demand
The West Coast Supply & Demand report is your go-to resource for mastering the energy market from the California coast to the western Colorado Rockies. This dynamic product offers extensive regional coverage, precise production forecasts for key basins, and in-depth pricing analysis, specifically examining the Colorado pricing spread from CIG Mainline to NW Pipeline Rockies.
Stay ahead of the competition with strategic insights, ensuring you make informed decisions and capitalize on emerging opportunities. Elevate your business with unparalleled market intelligence – invest in the West Coast Supply & Demand report today.
New EDA Product: Houston Ship Channel Supply & Demand
The Houston Ship Channel Supply & Demand report allows users to dive deep in understanding, and monitoring Houston Ship Channel natural gas dynamics. The product contains monthly updates of relevant price spreads, pipeline flows, production and demand estimates affecting the South Texas market, with forecasts extending 5 years into the future. Learn more about the Houston Ship Channel Supply & Demand report.
Energy Data Studio
East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.
Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.
Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact insight@eastdaley.com.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.
