29 Mar 2014
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Houston Ship Channel Shutdown Halts NGL Exports
posted by Unknown @ 12:52 0 Comments
The collision between a crude-oil barge and another ship occurred at
While dangers to the wildlife and the environment are of
course foremost in officials minds, still there is the pressing question of
what to do with all those seagoing vessels carrying all that NGL headed for
ports beyond.
Only making matters worse
If Houston was
just one of many ports exporting much-needed natural gas liquids, that would be
one thing. But the truth is that most all
NGL exports go through the
Houston Ship Channel, one of the busiest ports in the world and getting more so
every day.
“That’s all
going to go offline,” says Peter Fasullo, of Houston-based energy consultant
EnVantage Inc.. “Ships can’t get into the terminals to get loaded, and those that are
loaded can’t get out.”
Most US NGL capacity must pass through the Houston Ship
Channel, and when that comes to a halt, there’s a real big problem. On average, the United
States exports as much as 475 mbpd NGL. That’s up from 164 mbpd in 2010, almost a 200
percent increase. Houston
has a capacity of 380 mbpd, this according to Targa Resource Partners.
Butane and propane
Enterprise
Products of Houston operates
both a 5 and 14 mbph facility right on the channel itself. Operations at the facility are said to be
limited at best in the wake of the spill. Targa has the resources to export anywhere from 115 to 130 mbopd from
its terminal in Galena Park
NGL exports like propane and butane are up by 67 percent
from 2009, this attributed in part by the shale gas boom in the Permian Basin and Eagle Ford Shale regions of West and South
Texas respectively.
According to the EIA, the United
States exported 626 mbpd NGL in December
alone. Compare that to 1.2 mmbpd of
desalted fuel and 576 mbpd of motor gasoline.
Besides the ship channels obvious proximity to the active
oil and gas fields in west and south Texas ,
it is close by to Mont Belvieu, Texas ,
home of the largest NGL storage facility in the world.
Is the channel maxed out already?
For those who believe the Houston Ship Channel has already
been stretched too thin, this latest accident only bolsters their
position. But many companies do not
share that view as evident by the $35 billion in new projects and expansions
planned already in the area.
“The industry
has to think about how much infrastructure the channel can really handle,” says
Fasullo. “Because we’re putting a whole lot of traffic on one waterway.”
Phillips66 and Occidental Petroleum both agree, planning to
build new NGL export terminals at other Texas ports. For some the argument is simple, there is
just a limit to the capacity of any one port.
Occidental says it plans on building a pipeline straight from Mont
Belvieu to the port of Corpus
Christi Texas .
“It’s
like your personal portfolio,” says Jim Webster, Phillips 66’s general manager
of midstream business. “You want to diversify your risk, whether that’s in
bonds and stocks or whether that’s in where fractionation capacity is and what
waterways are used.”
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