Propane

Bitter cold temperatures, high demand, dwindling supplies and high prices have all combined to create a “perfect storm” propane shortage, leaving suppliers scrambling and prompting nearly two dozen states and the federal government to take steps to ease the crisis.

The U.S. shale gas and natural gas liquids (NGL) revolution has launched 136 domestic chemical industry projects worth a combined $91.2 billion, with 54% of that investment coming from foreign entities, according to the American Chemistry Council’s (ACC) late December tally. The unprecedented growth is far from over, industry experts say.

A study by France’s Parliamentary Office for the Evaluation of Scientific and Technological Choices (OPECST) concludes that propane stimulation is a “promising alternative” to hydraulic fracturing (fracking) — which is banned in the country — according to eCORP Stimulation Technologies.

Shale-driven natural gas liquids (NGL) supplies are pushing midstream companies to pursue additional capacity to export propane and/or butane from the Gulf Coast. Two new projects would offer combined loading capacity of 36,000 bbl per hour for export.

Houston-based Rock River Resources plans to build a crude oil processing plant and rail terminaling facility in Green River, UT. Called the Emery project, it will require a capital investment of over $230 million. Groundbreaking is planned for the first phase of the project later this year with operations expected in 2014. “Rock River Resources has received strong support from state and local community leaders and we have worked closely with them during the early phases of the project,” said COO Jeff Beicker. The first segment of the project will include a terminaling and rail loading facility. The terminaling facility is projected to be operational in 2014. The second segment will be a 10,000 b/d topping plant that will process local crudes and condensates into naphtha, fuel oil, diesel and jet fuel. The topping plant should be operational by mid-2015. The final segment of the project will be a processing plant for regional wax crudes that will produce refined paraffin waxes and lube oils. The wax plant should be operational by mid 2016.

The benefits of shale gas are undeniable, but those “other Tcfs” — natural gas liquids (NGL) — are transforming the global marketplace and provide tremendous opportunities for the U.S. marketplace, an executive with MarkWest Energy Partners LP said in Philadelphia this week.

Sunoco Logistics Partners LP is holding a binding open season for its Mariner South Pipeline, which is intended to transport export-grade propane and butane, from Lone Star NGL LLC’s storage and fractionation complex in Mont Belvieu, TX, to Sunoco Logistics’ terminal in Nederland, TX. The pipeline is to be available for other natural gas liquids and petroleum products depending on shipper interest, Sunoco said. Initial capacity is expected to be 200,000 b/d and could be scaled to support higher volumes as needed. The pipeline is expected to be operational by the first quarter of 2015. For information, visit www.sunocologistics.com/marinersouth.

The U.S. Coast Guard (USCG) on Tuesday responded to a collision between a tug pushing a barge and a Chevron Pipe Line Co. liquid propane gas (LPG) pipeline near Bayou Perot, 30 miles south of New Orleans.

Texas will provide $1 million to close a deal with Ascend Performance Materials Texas Inc. to build a propane dehydrogenation (PDH) facility near Houston, Gov. Rick Perry said.