The EPD discussion at NAPTP of its'ethane export project revealed a BIG competitive problem for the Mariner East ethane action to be exported from Marcus Hook just south of Philadelphia. EPD announced among other items that it now has an ethane contract with Ineos for ethane exported from Texas to the Ineos Plant in Grangemouth,Scotland. EPD also announced that its' ethane export terminal now under construction will have a capacity of 240,000 barrels a day and will go commercial in 2016. This is about the same time that the Grangemouth conversion from naptha to ethane will be completed. What's remarkable here is 1) the initial size of the EPD ethane export terminal and 2) that EPD will be exporting to Europe. EPD generally exports natural gas liquids to South America and with the expanded Panama Canal was expected to ramp up to Asia big time. But with Europe in play using very large carriers from the Houston Ship Channel means big pressure on Mariner East and SXL. Targa, another BIG Hitter in propane exports, indicated that it is studying the large scale export of ethane from its' Texas terminals,too. Having both EPD and Targa involved in ethane exports means IMO that Mariner East 2 better be built ,filled, and working quickly or it will be irrelevant.
RBN Energy a month ago had a great series on the problems of shipping ethane. I have come to the conclusion building the ships will be as big an issue for transporting ethane as building the terminals.
Ineos has two 15-yr contactss to Rafen Norway via Mackus Hook, and has or is in process of building new ships for Hook service. ME-1 is contracted out. ME-2 is next big question. No word out on ME-2 or line pipe size for it. There is more cost to ship to PADD-3 Vs. within PADD-1. But your post makes me bite my lip owning SXL. EPD did a great job with ATEX. SXL will have a harder time with ME-2 going over the Pa mts.In addition, larger capacity ships may ofset the longer pipeline distance to PADD-3. We will see what SXL response is.
Please don't sell SXL short. They are in the crude oil business, Everything looks like Nederland with ETE family will be their export facility and since selling of Sunoco Stations they have to be sold one day to ETP or ETE. If you look at their asset map you will see them strongest in TX leading to Gulf.
Hach Tell me if I wrong but it is my understanding that EPD has not picked the site yet.It is closer to send it from marcellus to NJ than to Gulf. and By the way OILT has a 10% option on EPD ethane plant What I see is almost like what we have in the global world i.e. ETE ETP SXL vs EPD vs NGLS vs D ACMP WMB Where does KMP and MWE and DPM hook up to? Marv
How DPM will directly participate in NGL exports in GC and elsewhere (see indirect yie up possible next post)
NGL Fractionation Facilities
….Our NGL fractionation facilities in Mont Belvieu, Texas consist of a 12.5% interest in the Enterprise fractionator operated by Enterprise Products Partners L.P., and a 20% interest in the Mont Belvieu 1 fractionator operated by ONEOK Partner
-Sand Hills NGL to GC from EF/Permian
-Southern Hills NGL to GC from Mid-Cont. to Conway
-10% in Texas Express from DJ Basin and Front range still to be dropped down to Mt.Bel
-Willbreeze and Seabreeze NGL to Corpus from EF
-Black Lake NGL to MB from, N. La, La Tuscal Shale. E. Tx system to carthage
-Beaumont and Pt .Arthur Plants-ngls to Exxon in La
-Marysville, M NGL storage for Sarina
-Butane export expansion at Chesapeake VA Terminal
-Propane terminals on EC
Aside from saying that its' ethane export facility will be integrated with its' Mont Belvieu complex EPD has not yet announced exactly where the terminal will be located...I did see the OILT option and assumed that OILT would be the landlord for the new terminal. As to Competition between the teams you cited, let's dispose of DPM first. The only mention I've seen of DPM's intent to export is one saying that DPM will be exporting Butane from its' Hampton Roads facility. Compared to propane and ethane the export of butane is chicken feed. I'm guessing that DPM will be getting butane from MWE and shipping it to Hampton Roads via RR. We know that MWE and KMP are kinda playing tag with Targa. And Targa has indicated it will probably add fractionation units numbers 5 and 6 at Mont Belvieu..at 100,000 barrels/day each. This fits the Y pipeline volumes being talked about by KMP/MWE. Targa also being talked about as being interested in the 80% share of NM/TX ngl pipeline owned by Chevron. Other 20% just sold to MMLP'S by APL. D/ACMP is small potatoes in export action. In summary, EPD/OILT is Número UNO, Targa/KMP/MWE number two, and ETE/ETP/SXL a distant third. Also, when you are loading a really bing ethane carrier at a 240,000 barrel/day rate the economics beat hell out of using small ships and loading rates like SXL will use at Marcus Hook. I also note that there are 16 crackers on the Gulf Coast that will be using ethane versus only one up North in Sarnia..ethane market on Gulf Coast is a monster, and higher volumes equal lower costs for export customers. Propane is the same way..in a couple of months EPD and Targa will be exporting around 200 million barrels/year of propane and no one is third. And in another year EPD's big PDH plant based on propane comes on line.. In this area it's EPD and Targa all the way.