Executive Summary:
Infrastructure: Targa’s Galena Park outage is set to tighten global LPG supply amid already constrained markets.
Exports: NGL exports rose 19.5% W-o-W for the week ending March 20, driven by a sharp increase in LPG volumes.
Rigs: The total US rig count decreased for the week of March 14 from 524 to 517.
Flows: US natural gas volumes in pipeline samples dropped 1.2% W-o-W, averaging 80.2 Bcf/d for the week ending March 22.
Infrastructure:
Targa Resources (TRGP) on March 18 declared a force majeure at its Galena Park terminal due to a mechanical failure on a low ethane propane (LEP) unit. The outage comes at a precarious moment for global LPG markets.
The failed LEP unit will require a full replacement of three compressor skids and is expected to slow propane loadings. Galen Park is responsible for nearly 20% of US LPG exports, and with more than 80% of volumes tied to propane and over half typically moving to Asia, even a partial disruption tightens an already constrained global supply picture amid reduced Middle East exports.
East Daley believes the financial impact to TRGP is likely negligible. The figure shows Targa’s EBITDA exposure to LPG exports from Energy Data Studio. We expect only a modest effect on operating margins in the near term, assuming some level of continued loadings. The more material impact lies in market rebalancing across the broader Mont Belvieu market.
A temporary bottleneck at Galena Park risks stranding barrels at the hub, pressuring local NGL prices while international benchmarks remain elevated. This dynamic widens the export arbitrage and creates an opportunity for competing “wellhead-to-water” operators, particularly Enterprise Products (EPD) and Energy Transfer (ET), to capture displaced volumes, assuming available dock and pipeline capacity.
This event reinforces a key truth: Utilization, not nameplate capacity, drives returns. Near-term dislocations may ultimately benefit traders and marketers, as wider spreads incentivize rerouting and maximize value capture across the system.
Exports:
NGL exports rose 19.5% W-o-W for the week ending March 20, driven by a sharp increase in LPG volumes that offset a decline in ethane.
LPG exports climbed 30.8% W-o-W, with broad-based gains across most terminals. While PSX Freeport fell 20.9%, EPD’s EHT led the upside, surging 78.5% (376 Mb/d).
Ethane exports declined 8% W-o-W. Gains at EPD’s Neches River (+69.6%) and ET’s Nederland/Orbit (+100%) terminals were outweighed by steep drops at EPD Morgan’s Point (-52.9%) and ET Marcus Hook (-81.7%).
Rigs:
The total US rig count decreased during the week of March 14 from 524 to 517. Liquids-driven basins increased W-o-W from 398 to 396
- Eagle Ford (-1): BP
- Permian:
- Midland (-1): Double Eagle
Flows:
US natural gas volumes in pipeline samples dropped 1.2% W-o-W, averaging 80.2 Bcf/d for the week ending March 22.
Flows in gas basins decreased 1.0% to 50.6 Bcf/d. The ArkLaTex (Haynesville) sample decreased 2.4% to 11.2 Bcf/d, and the Marcellus+Utica slid 0.7% W-o-W at 38.4 Bcf/d.
Samples in liquids basins declined 1.6% W-o-W to 22.6 Bcf/d. The Permian sample decreased 1.6%, while the Anadarko sample declined 2.4%.
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