Argus Live: 2020 likely a record for US LPG exports

The year 2020 was a record year for US LPG exports as global demand for the fuel, particularly for residential uses in Asia, remained strong, Enterprise Products co-chief executive Jim Teague told the Argus Live crude conference this week.

Enterprise, which operates the largest 835,000 b/d US LPG export terminal on the Houston Ship Channel, shipped an estimated 27mn bl in December, Teague said.

"Our LPG docks have been chock-a-block full throughout this pandemic," he said. "December was a record month for [natural gas liquids] exports, I think we did 27mn bl in the month of December, and if I am not mistaken 2020 will be a record year for exports."

While US upstream oil and gas producers faced consolidation following the March 2020 crash in crude prices, Teague said he does not foresee the same trend for US midstream operators. Enterprise, which has a wide pipeline footprint throughout the Permian basin and into the US midcontinent, is focused instead on repurposing underutilized assets to other products and focused on downstream production. Teague said the Houston-based company is particularly focused on expanding its petrochemicals segment, which produces propylene and exports ethylene out of its Morgan's Point, Texas, dock near Houston.

"A lot of people do not appreciate that Enterprise is the largest merchant producer of propylene in world," Teague said. "Now we have got an ethylene system, we are going to expand that, and that ties into our value chain, and we can leverage that all the way back to the gas plants in the Permian."

In April 2020 Enterprise announced it would hold off on a planned 260,000 b/d expansion of LPG and propylene export capacity out of its Houston terminal, but Teague noted this week further expansions are always on the table.

"Yes we can expand our capacity pretty cheaply, and we have to look at it as we have been chock-a-block full," Teague said.

Teague also touched on recent efforts under President Joe Biden's administration to curb US oil and gas production on federal land. US production is "the biggest geopolitical weapon we have ever had," he said, and called efforts to curtail US production on federal lands "foolish." Sustainability initiatives to curtail plastics production would also have unintended consequences, he noted.

"We've got 90bn lbs of ethylene capacity in this country, those jobs in those plants are $40 an hour jobs," Teague said. "There is a domino effect to this."

By Amy Strahan