Phillips 66 said its Freeport LPG Export Terminal in Freeport, TX, is now fully operational. The company loaded its first contracted cargo on the Commander, a very large gas carrier that departed the terminal Friday.
"The startup of the Freeport LPG Export Terminal is the culmination of a four-year effort to develop a new U.S. Gulf Coast natural gas liquids (NGL) market hub that also includes Phillips 66 Partners' 100,000 b/d Sweeny fractionator and 7.5 million bbl Clemens storage facility," said CEO Greg Garland. "The new liquefied petroleum gas (LPG) export terminal gives customers the ability to place multi-grade LPG products directly into global markets through Port Freeport, which provides immediate blue water access with minimal congestion."
The terminal can simultaneously load two ships with refrigerated propane and butane at a combined rate of 36,000 bbl per hour. Supply is sourced from the Phillips 66 Partners' Sweeny fractionator and Clemens storage facility, which is connected by pipeline to the Mont Belvieu Hub.
The export facility was developed to satisfy the growing international demand for affordable U.S. NGLs, Phillips said. Expecting U.S. production to continue to grow, Phillips said it is evaluating additional NGL fractionation and infrastructure alternatives along the U.S. Gulf Coast.
Separately last July, Enterprise Products Partners LP executives said during a second quarter conference call that the company had seen the cancellation of three LPG loadings at its Gulf Coast terminal. No details on the would-be destinations of the cancelled cargos were given at the time.
At one time, the United States was a net propane importer, but some time ago it became a net exporter.
"The initial growth in U.S. propane production, between 2008 and 2010, led to a reduction in dependence on propane imports, with net imports falling from an average of 109,000 b/d in 2008 to a near-balance of 16,000 b/d in net exports in 2010," the U.S. Energy Information Administration (EIA) said in a note published in November 2015. "By 2011, only Canada remained as a major supplier of propane into the United States, with imports from other countries relegated to deliveries to Hawaii and occasional shipments into the Northeast."
According to EIA, propane prices in the global market are typically set by the Saudi Aramco monthly contract price, which is generally based on the price of naphtha, a petrochemical feedstock that competes with propane.