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US ethane exports slump as China flows blocked
US ethane exports slump as China flows blocked
The EIA has revised down its forecast for US ethane exports following the introduction of licensing requirements, writes Amy Strahan Houston, 17 June (Argus) — US exports of ethane fell to a nearly five-year low in early June following the US Department of Commerce's restrictions on shipments to China , but market participants expect the trade dispute to be short-lived. The department's Bureau of Industry and Security (BIS) sent a letter to midstream firm Enterprise Products in late May requiring it as the operator of the 240,000 b/d (5mn t/yr) Morgan's Point ethane terminal in Texas to obtain a licence for future shipments to China citing possible military uses for ethane and butane. The US' largest ethane exporter, Energy Transfer, which operates the 180,000 b/d Nederland ethane terminal, then received a similar notice on 3 June. Enterprise's request for emergency authorisation to ship three ethane cargoes totalling 2.2mn bl (177,000t) was subsequently denied, sending ethane prices at the Mont Belvieu hub in Texas to a six-month low of 19.25¢/USG ($142/t) on 5 June. Around 198,000 b/d of US ethane loaded during the week to 26 May, after Enterprise received its letter, down from 410,000 b/d a week earlier and 547,000 b/d in the same week of 2024, Kpler data show. They are forecast to stand at 218,000 b/d over the week to 9 June. Ethane prices at Mont Belvieu had recovered to levels seen before the trade restriction by 10 June, owing in part to seasonal gains in Gulf coast natural gas prices but also because market participants expect disruptions to cargo loadings to be temporary, with the US and China holding trade talks in London this month. Very large ethane carriers (VLEC) that deliver ethane to China were on standby by mid-June. The Pacific Ineos Grenadier , which loaded ethane from Morgan's Point while Enterprise appealed against the BIS measure, has been moored at the company's nearby Houston terminal since 9 June. Satellite's Seri Erlang remains offshore Energy Transfer's Nederland facility, while its STL Qianji ang , which loaded at Nederland in the first week of June, is now heading to India. Another Satellite vessel, STL Yangtze , discharged in India in early June, possibly owing to maintenance at Satellite's cracker in Lianyungang , China, and is now returning to Nederland, according to Kpler. "We are all hoping the policy will be reversed soon," one market participant says, while another adds that it is likely to be resolved in days and not weeks. Restricted view US government agency the EIA has nevertheless attempted to forecast the impact the restriction would have on US ethane exports, revising down its forecast by 51pc to 310,000 b/d (6.4mn t/yr) for 2026. US ethane export capacity is on track to grow to as much as 900,000 b/d by the end of next year following the opening of new projects, including Enterprise's new 360,000 b/d Neches River ethane and propane terminal near Beaumont, Texas, and expansions at Morgan's Point and Energy Transfer's Marcus Hook terminals. Chinese buyers of US ethane are also hopeful of a relatively swift resolution owing to the mercurial trade policy of the Donald Trump administration. If it is not forthcoming, they may look to switch feedslates to LPG and naphtha when possible in the shorter term, and those that have invested in new VLEC fleets could repurpose them to LPG or ethylene in the longer term. Neither would be an attractive proposition given the substantial levels of investment in new ethane-fed cracking and VLEC capacity, but would ensure that domestic downstream derivative plants are kept running. Chinese companies are unlikely to begin importing ethylene instead given the margins would still be uncompetitive compared with cracking alternative feedstocks. In any event, buyers "do not want to make a big decision they will regret", one market participant says. Mont Belvieu ethane price Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Q&A: Suburban's renewable quest continues
Q&A: Suburban's renewable quest continues
London, 17 June (Argus) — US LPG distributor Suburban Propane was the first company to sell a propane-renewable DME (rDME) blend in California in 2022 . The company has also pioneered sales of biopropane in the US and has since expanded into renewable natural gas (RNG) — also called biomethane — and hydrogen. Argus spoke with Suburban's vice-president of renewable energy, Douglas Dagan, about the push into renewables and the challenges ahead: Could you provide an update on Suburban's renewable DME sales? We continue to have a strategic partnership with Oberon Fuels , which produces rDME in the US. We are the only commercial seller of a propane-rDME blend — right now we sell to all of our forklift truck and autogas customers from our Anaheim, California, location. The product is a true drop-in replacement that can be used in all propane applications. The blend ratio is currently small, but we are testing higher percentages to determine the maximum drop-in blend level. We received an exemption from the California Air Resources Board [CARB] to run a pilot testing higher blend levels in vehicles. What is the current blend ratio and what is the maximum you are looking at? Our commercial blend is 4pc rDME. This ensures no issues as a drop-in replacement. We want to get to a 10pc maximum, but we've done a lot of testing and are delivering at 4pc in the Anaheim market. We are confident there are no issues on the customer side when a 4pc blend is used in an engine. Now we're looking to assess higher blend percentages. Getting CARB pilot approval was the first step. Why has the maximum fallen from previous estimates of 20pc and then 12pc? RDME has a lot of potential, but it's more challenging than anticipated. We started testing before the World Liquid Gas Association [WLGA] did. The belief was you could blend up to 20pc and everything would work. It turns out it's more like 10pc — lower than hoped — which means environmental benefits don't scale as fast. You have to ensure no issues arise from the oxygen content in DME, such as seal degradation causing leaks. There must be a high degree of confidence. On the supply side, different blend ratios require dedicated tanks and infrastructure — you can't switch between 4pc and 20pc easily — so it's very costly to have more than one blend. What are the latest in terms of your renewable propane sales? We are rapidly scaling — we've sold over 1mn USG [1,900t] of renewable propane in California, where we primarily offer renewable propane. Several programmes support renewable propane, but California credits are the most lucrative. We will sell outside California and are exploring expansion. The biggest challenge is availability. Many producers don't yet see value in separating renewable propane from the stream — it's a by-product, from renewable diesel or sustainable aviation fuel (SAF) production. We're building relationships to say: we have demand, and we'll pay. We just need more of it. How does Donald Trump's presidency and the resulting pressures on the regulatory environment for the energy transition affect Suburban's renewable plans? I think the Trump administration is supportive of what we're doing. It has different priorities from the Biden administration, but we still see support at both state and federal levels for our traditional product. On the renewable side, we're developing drop-in renewable propane, as well as RNG and clean hydrogen. There's support for all three. A Trump priority is domestic industry, and our plans are heavily domestic. Every administration brings new challenges. Lack of certainty is the biggest — knowing future policies is hard. Luckily we have a traditional product and a renewable platform that have support from both parties and we think the outlook for the future is good regardless of which party is in control. Can you explain why the carbon intensity (CI) metric could be an important tool for policy makers? It's a critical metric, though a bit technical. Policy makers deal with many issues — energy is just one. But the more people understand CI, the better the decisions. The CI scale, developed by Argonne National Lab, is a full life-cycle emissions calculation, covering production and use. Electric vehicles [EVs] are often seen as cleanest, but not always. CI reveals this — the lower the better. For example, if the electricity grid is dirtier than gasoline, switching to EVs worsens emissions. In most US states, the grid is dirtier than traditional propane. Gasoline and diesel score about 100, traditional propane around 80, and renewable propane 20-40. Suburban is moving into hydrogen and RNG. Is this a diversification strategy or do they somehow complement the core LPG business? We have a large RNG facility in Arizona using dairy manure and co-feed from organic waste. We can produce 1,000–1,500mn Btu/d of RNG sent via pipeline to California for engine fuel. Its CI score is a little better than minus 350 — phenomenally clean. We're building a new facility in upstate New York, and upgrading one in Columbus, Ohio, that uses food and organic waste. We're also evaluating other RNG opportunities. But we're also growing our LPG business. RNG is a great product — and part of a strategic platform. Digesters make biogas, which becomes RNG. But raw biogas can also be used to make rDME and renewable propane. And RNG can make clean hydrogen — or rDME/renewable propane that can be transported and reformed into clean hydrogen on site. These are all interconnected. Will the company retain its core focus as a propane supplier? Yes. Propane is a unique energy source that will remain critical. Many customers are in areas where large-scale grid decarbonisation isn't feasible, so propane as distributed energy is vital. [And] more extreme weather events take down grids. Propane is resilient — useful for heating, cooking and generating electrons to power EVs where the grid can't meet demand. If emergency EVs run on electricity and the grid fails, you need another way to generate electrons. [So, propane has a lasting role.] Have Suburban's traditional propane sales been pressured by warmer winters? Winter 2024–25 was much colder than the record-warm winter a year earlier, which had lowered demand. This winter, heating demand climbed and sales increased. But our strategy doesn't rely on cold weather. We're growing non-weather-related demand via traditional and renewable platforms — especially for engines and back-up power. Our goal is to grow both platforms and deploy capital for the greatest returns. What are your hopes for the rest of this year for the renewables business? We plan to keep growing RNG production. Output is rising at our Stanfield [Arizona] facility and the other two mentioned. We're also exploring hydrogen opportunities and expect that segment to grow. For renewable propane and DME, we've seen tremendous recent growth — especially in renewable propane. We're pursuing more supply and new markets outside California. Reaching 1mn USG in sales was a big milestone — and we want to keep building on that this year. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
LPG prices jump as Israel-Iran conflict risks trade
LPG prices jump as Israel-Iran conflict risks trade
The market has readied for a shift in Chinese buying patterns, while cautiously watching for signals of Iran's response, writes Matt Scotland London, 17 June (Argus) — International LPG prices and VLGC freight rates surged on 13 June alongside crude benchmarks after Israel's attacks on Iran, raising fears of wider disruption to Middle Eastern energy trade. But prices stabilised on 16 June as the markets assessed the odds of attacks on energy infrastructure and shipping in the region. Northeast Asian propane import prices on the Argus Far East Index (AFEI) and the Argus Ningbo Index climbed by more than $30/t to $577/t and $636.25/t, respectively, on 13 June as the market geared for stronger Chinese buying interest for US cargoes if Mideast Gulf supplies are disrupted. The Mideast Gulf front-month propane contract price swap edged up to $588/t, cutting its discount to the AFEI swap to $16/t from $39.50/t, reflecting the shift in demand to US supply. US Gulf coast LPG prices also rose abruptly. The fob propane cargo price jumped by nearly $21/t to $442.20/t, and the Mont Belvieu LST price rose by more than $23/t to $423.30/t. Firming AFEI paper values earlier in the day widened the US-Asia propane arbitrage to about $147–150/t, helping to lift loading fees at Gulf coast terminals, which had been at close to cancellation levels on weak Asian petrochemical margins and US-China trade concerns. Northwest European propane import prices increased by $22.50/t to $485.50/t cif Amsterdam-Rotterdam-Antwerp, fuelled in part by concerns that growing Asian demand for US cargoes could reduce US availability for the region. But sentiment in the region was subdued with major petrochemical buyer Dow still offering a cargo. VLGC freight rates on the Ras Tanura–Chiba route from the Mideast Gulf to Asia climbed from $69/t to $76/t on 13 June and to $85/t by 16 June, while Houston–Chiba and Houston–Flushing rates from the US to Asia and Europe were steadier as shipowners became cautious about the growing risk in the Middle East, trimming vessel availability. A closure of the Strait of Hormuz — which accounts for 25-30pc of global crude and gas flows — would severely restrict Mideast Gulf exports. International LPG prices steadied on 16 June as the markets reflected on the latest conflict and likelihood of the Strait of Hormuz being shut off. Much will depend on Iran's current capabilities and how that might affect its strategy. Tehran has appealed to US president Donald Trump to halt Israeli strikes and resume nuclear diplomacy, but he appears reluctant to intervene. Only one confirmed strike has affected Iranian LPG facilities — a drone attack on two gas processing plants in Assaluyeh. These can produce 77,000 b/d of gas condensate, 2,900 t/d of LPG and 2,750 t/d of ethane. But only one train was hit, according to state media. A separate fire broke out at the Fajr-e-Jam gas processing plant, which can produce around 200 t/d of LPG and 80 t/d of natural gas liquids. The affect on Iranian LPG output should be limited as it has plenty of gas processing capacity and it is the summer off-season for demand, consultancy FGE's Iman Nasseri says. China is forecast to import around 4.6mn t of LPG from Iran in the first half of 2025, which would be more than a quarter of its total, Kpler data show. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Electronic interference rising in Mideast Gulf: UKMTO
Electronic interference rising in Mideast Gulf: UKMTO
Dubai, 16 June (Argus) — Electronic interference within the waters of the Mideast Gulf and the strait of Hormuz are at elevated levels, the UK Maritime Trade Operations (UKMTO) said today. The UKMTO "has received multiple reports… that there is increasing electronic interference within the waters of the Gulf," it said. Monitoring of automatic identification systems (AIS) by the UKMTO has confirmed the finding, it said. The warning comes during a new escalatory cycle between Israel and Iran that was triggered by a series of air and missile strikes by Israel on several key Iranian military and nuclear sites on 13 June. Iran responded with ballistic missile and drone strikes on military targets in Israel, including the Kirya complex in Tel Aviv, which houses the defence ministry headquarters. The two sides have been exchanging missile fire with increasing intensity ever since, with critical energy infrastructure being hit. The UKMTO said electronic interference across the wider region has been rising in this period, which is "having a significant impact on vessels' positional reporting" through automated systems. It advised vessels transiting through Mideast Gulf and nearby waters to do so "with caution" and continue to report incidences of electronic interference. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
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