Enterprise Products’ (EPD) Neches River Terminal Phase 2 expansion is emerging as a key swing factor for the 2026 propane balance. East Daley expects propane service to begin in May; we have modeled three ramp scenarios to test how startup timing could shape inventories heading into next winter.
We include the scenarios in the monthly Natural Gas Liquids report. Our base case assumes a ramp trajectory similar to Phase 1, with exports reaching 40 Mb/d in May, 70 Mb/d in June and 120 Mb/d in July. Under the base case, US propane storage climbs to 107 MMbbl in November. A faster ramp, where exports run 20 Mb/d above the Phase 1 pace, brings inventory down modestly but still leaves propane storage at a record 104 MMbbl. A slower ramp, 20 Mb/d below the base case, pushes inventory even higher, reaching 110 MMbbl ahead of the 2026-27 winter (see figure below).
The takeaway is straightforward: Even under an aggressive startup, the propane market remains oversupplied. A delayed or slower-than-expected ramp would only add to the overhang, reinforcing a bearish setup for propane prices as the market moves into the 2026-27 heating season.
Beyond timing, Enterprise also faces a commercial challenge. As the global LPG trade continues to diversify away from China, buyers increasingly favor mixed cargoes with a higher butane component. That dynamic could make it harder for a pure propane terminal to fully optimize utilization. Even so, EPD has flexibility across its export assets. The company may be able to maximize propane loadings at Neches River while freeing capacity at Enterprise Hydrocarbons Terminal for more blended cargo optimization.
In that sense, the startup of Phase 2 matters not just for outright export volumes, but for how effectively Enterprise can position its broader dock system against changing global LPG demand patterns. – Julian Renton Tickers: EPD.
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