Enterprise Products (EPD) will expand its Enterprise Hydrocarbons Terminal (EHT) on the Houston Ship Channel to meet strong global demand for NGL products. EPD will add refrigeration to increase propane and butane export capacity by 300 Mb/d and help ease a bottleneck on Gulf Coast dock space.
Successful ethane export contracting is partly responsible for this LPG expansion project. EPD is developing another terminal on the Neches River near Beaumont, TX to export ethane and propane. As East Daley Analytics noted in our 2Q24 webinar on ethane supply and demand, EPD will likely use the Neches River facility predominately for ethane exports as a result of ethane contracts the company has booked totaling 450 Mb/d.
Enterprise plans to start service on the EHT expansion by YE26, adding much-needed dock space for exports. In the NGL Hub Model, we expect LPG export capacity to be tight through the upcoming 2024-25 winter season, with Gulf Coast (PADD 3) dock utilization nearing 100%. Tight dock capacity will cause propane prices to fall and widen LPG price spreads from Mont Belvieu to East Asia.
Long-term LPG export capacity is on the way with several expansion projects in the hopper (refer to the figure from the NGL Hub Model). In the chart, EDA ignores the 360 Mb/d of LPG capacity from Neches River; we believe EPD instead will commit that dock space primarily for 180 Mb/d of ethane capacity.
The amount of demand in end markets will depend on utilization rates at Propane Dehydrogenation (PDH) facilities in east and south China. Newbuild PDH facilities will bring on capacity for more than 500 Mb/d of propane demand by YE25. East Daley will address that demand variable in our monthly Propane Supply & Demand product and during our 3Q24 NGLs webinar on August 28. – Rob Wilson Tickers: EPD.
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