Edmonton, Alberta, butane sold at premiums to Mont Belvieu, Texas, this week for the first time in two years as western Canada supplies tightened on strong summer exports from Ferndale, Washington.
September Edmonton in-well butane sold on Thursday at 58pc of the calendar-month average of Nymex WTI, which equated to 134.32¢/USG, a more than $3/USG premium to EPC butane at Mont Belvieu, which was assessed at 131.25¢/USG. Edmonton propane last sold at a premium to Mont Belvieu in September 2024.
US Gulf butane typically trades at a premium to butane "stranded" in western Canada, where growing production from natural gas processing requires more exports to keep the domestic market in balance.
AltaGas' export terminal at Ferndale is currently the only large waterborne butane export facility on the Pacific coast. Butane shipments out of Ferndale rose to a three-year high of 109,000t in August, according to Kpler vessel-tracking data, on increasing demand from butane-strapped Asia buyers seeking alternative supplies to Mideast production. Exports this summer helped draw down western Canada butane inventories to 4.86mn bl at the start of September, 13pc lower than a year earlier, according to the Canada Energy Regulator.
The tightness of the Canadian butane market is underscored by the fact that the region's largest butane consumer, Keyera's Alberta Envirofuels facility, has been down for maintenance.
Western Canada inventories may only get tighter in the year ahead, as the start-up of additional butane shipments from the new Ridley Energy Export Facility (REEF) in British Columbia is expected in 2027.
