Hattiesburg propane trading jumps on Dixie line work

Propane spot trading activity surged at Hattiesburg, Mississippi, this week as market participants prepared for maintenance on a segment of Enterprise Products Partners' 1,300-mile natural gas liquids (NGL) Dixie pipeline.

Distributors sold 215,000 bl of Hattiesburg spot propane this week, nearly triple the 74,500 bl sold in the previous week and nearly quadruple the same period last year, when only 58,500 bl transacted coming off of heating season.

"There is a need to get barrels out of the line into storage," according to a retailer in the region.

Enterprise will perform hydrostatic testing in compliance with federal regulations on the segment of the pipeline between Opelika, Alabama, and Milner, Georgia, starting on 28 May. The outage is expected to last approximately 45 days but may be extended depending on the findings of the inspection.

The Apex terminal in North Carolina will likely serve as a distribution location for the northern portion of the line during the work, the retailer said.

Hattiesburg pricing, which typically trades at a discount to the benchmark hub at Mont Belvieu, Texas, fell further this week as market participants offloaded surplus line volumes.

Hattiesburg propane averaged 80¢/USG in March, a 1.79¢/USG discount to Mont Belvieu, Texas, LST propane, and has extended losses into April. Hattiesburg propane fell from 79.5¢/USG to 75¢/USG during the first week of April, widening its discount to Mont Belvieu propane to 10.875¢/USG, the largest discount between the two locations seen since February 2021.

Demand for propane at the Hattiesburg terminal is expected to remain low owing to seasonally low demand and restricted transportation during the testing period for the Dixie pipeline.

By Abby Downing-Beaver