Midstream & Natural Gas "Deep Dive: US LPG Exports" Gupta

Research evidence excerpt

Midstream & Natural Gas "Deep Dive: US LPG Exports" Gupta

akes importing from the

US more attractive. In the current market, Asia is further boosting US LPG imports

to replace Middle East supply.

Expanding Infrastructure Investments: Significant investments in pipeline and

terminal capacity, particularly in the Houston Ship Channel, enabled handling of

higher export volumes. Competitive pricing, as US LPG often trades below

international benchmarks, has made American exports more attractive to global

buyers.

LPG Infrastructure Requirements

LPG exports require an integrated network of infrastructure to move NGLs from

production basins to global markets. LPG primarily originates from nat gas processing

plants, which remove NGLs from raw gas streams. The NGLs are typically moved as part

of a mixed NGL stream (known as "y-grade"), which is then sent to fractionation

facilities to separate the y-grade into purity products such as LPG, ethane, normal

butane, etc. Once fractionated, LPG is transported to coastal export terminals, typically

through large-diameter pipelines. Before being shipped to the terminals, LPG must be

refrigerated to convert the gas to liquid for storage, and then stored in underground salt

caverns or specialized above-ground tanks. These types of storage infrastructure allow

LPG to be portable by maintaining it in a pressurized liquid state. LPG is then loaded onto

very large gas carriers (VLGCs).

The general value chain enabling LPG to be exported is as follows - Gathering,

processing, transportation, storage, refrigeration, and then marine loading. An

integrated value chain is thus a key competitive advantage, with EPD and ET having the

most integrated footprints within our coverage. Mt. Belvieu, Texas, is a major hub for