ENERGY Midstream Oil & NGLs Waterborne LPG Overview · 2016. 11. 11. · Presentation IHS...

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© 2016 IHS

Presentation

IHS

Waterborne LPG Overview

ENERGY Midstream Oil & NGLs

November 2016 – IHS Latin America LPG Seminar

Buenos Aires, Argentina

Scott Gray, Senior Director - Waterborne, +1 832-679-7268, [email protected]

ENERGY

© 2016 IHS

Contents

2

Waterborne LPG Overview / November 2016

slatoT gnitfiL retawrevO labolG

slatoT gnitfiL retawrevO lanoigeR

slatoT gnitfiL retawrevO SU

lanimreT yb slatoT gnitfiL retawrevO SU

tcudorP yb slatoT gnitfiL retawrevO SU

yb slatoT gnitfiL retawrevO SU

Destination Region

nosirapmoC gnicirP

seeF lanimreT

teelF & stropxE enahtE

thgierF

etadpU sutatS lanimreT SU

etadpU lanaC amanaP

aisA & SU – HDP

snoisulcnoC

© 2016 IHS 3


© 2016 IHS 4


© 2016 IHS 5

Global Liftings: Source & Destination


© 2016 IHS 6


489

578

673

354

707

257

307

334

177

353

0

200

400

600

800

1,000

1,200

2013 2014 2015 1H 2016 2016 *

IsoButane Butane Propane Ethane

Global Annual Waterborne LPG Lifting Totals

Source: IHS Waterborne © 2016 IHS

Mil

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n B

arr

els

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0

200

400

600

800

1,000

1,200

2013 2014 2015 2016 YTD 2016*

Other

Southeast Asia

Australia

Middle East

North Sea

West Africa

North America

Mediterranean

Latin America

Regional Annual Waterborne LPG Lifting Totals


Mil

lio

n B

arr

els

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0

200

400

600

800

1000

1200

2013 2014 2015 2016 YTD 2016*

Other

Far East

Australia

Middle East

North Sea

West Africa

North America

Mediterranean

Latin America

Regional Annual Waterborne LPG Destination


Mil

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n B

arr

els

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Terminal Overview

Pricing

Terminal Fees

Cancellations


US LPG Liftings: Source & Destination

© 2016 IHS 10


0

50

100

150

200

250

300

350

2013 2014 2015 2016 YTD 2016*

United States Annual Waterborne LPG Lifting Totals


Mil

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n B

arr

els

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0

50

100

150

200

250

300

350

2013 2014 2015 2016 YTD 2016*

C2

C3

NC4

IC4

United States Annual Waterborne Exports By Product


Mil

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n B

arr

els

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0

50

100

150

200

250

300

350

2013 2014 2015 2016 YTD 2016*

Other

Ferndale, WA (S)

Corpus Christi, TX (S)

Marcus Hook, PA (B)

Nederland, TX (S)

Houston, TX (S)

Galena Park, TX (S)

United States Annual Waterborne LPG Exports by Terminal


Mil

lio

n B

arr

les

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0

50

100

150

200

250

300

350

2013 2014 2015 2016 YTD 2016*

Other

Far East

Med/WAF/NWEurope

Latin America

United States Annual WAterborneLPG Exports By Destination Region


Mil

lio

n B

arr

els

© 2016 IHS 14


0

200

400

600

800

1000

12001/2

/2014

2/2

/2014

3/2

/2014

4/2

/2014

5/2

/2014

6/2

/2014

7/2

/2014

8/2

/2014

9/2

/2014

10/2

/2014

11/2

/2014

12/2

/2014

1/2

/2015

2/2

/2015

3/2

/2015

4/2

/2015

5/2

/2015

6/2

/2015

7/2

/2015

8/2

/2015

9/2

/2015

10/2

/2015

11/2

/2015

12/2

/2015

1/2

/2016

2/2

/2016

3/2

/2016

4/2

/2016

5/2

/2016

6/2

/2016

7/2

/2016

8/2

/2016

9/2

/2016

USGC Propane and terminal fee Far East Propane NWE Propane

Propane Pricing

Source: OPIS, Argus © 2016 IHS

$/t

on

© 2016 IHS 15


0

200

400

600

800

1000

12001/2

/2014

2/2

/2014

3/2

/2014

4/2

/2014

5/2

/2014

6/2

/2014

7/2

/2014

8/2

/2014

9/2

/2014

10/2

/2014

11/2

/2014

12/2

/2014

1/2

/2015

2/2

/2015

3/2

/2015

4/2

/2015

5/2

/2015

6/2

/2015

7/2

/2015

8/2

/2015

9/2

/2015

10/2

/2015

11/2

/2015

12/2

/2015

1/2

/2016

2/2

/2016

3/2

/2016

4/2

/2016

5/2

/2016

6/2

/2016

7/2

/2016

8/2

/2016

9/2

/2016

USGC Butane and terminal fee NWE Butane Far East Butane

Butane Pricing

Source: OPIS, Argus © 2016 IHS

$/t

on

© 2016 IHS 16


0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

C3 Export Fee C4 Export Fee

USGC terminal fees


cen

ts/g

allo

n

© 2016 IHS

Different Types of Terminal Fees

• Term Contract Fees – This is Related To Those Contracts Which Span

the Course of A Designated Period of Time (1-Year, 3-Years, 5-Years,

etc).

• Spot Terminal Fees – This is Related To One-Off, Individually

Negotiated Spot Transactions

• Spot Re-Sale Term Fees – This is Related to Transactions Between

Term Contract Holders and 3rd Parties

17


© 2016 IHS

USGC Cargo Cancellations

• USGC Cancellations Occur When the Lifter Determines That a

Scheduled Cargo Is Either Unwanted or Unneeded

• Previously, Cancellation Notification of 30 Days Was Required In Order

To Avoid Additional Cancellation Fees / Penalties

• Earlier in 2016 The USGC Marine Terminals Began To Allow

Cancellations Up Until the Last Day of the Prior Month

• Cancellation Fees Vary from Contract to Contract, but are Generally

Centered around 9cts/gal (in most cases)

18


© 2016 IHS 19

Freight Rates & VLGC Fleet


© 2016 IHS 20


0.00

5.00

10.00

15.00

20.00

25.00

30.00

1/20/2005 1/20/2006 1/20/2007 1/20/2008 1/20/2009 1/20/2010 1/20/2011 1/20/2012 1/20/2013 1/20/2014 1/20/2015 1/20/2016

Ras Tanura to Japan 84000 cbm

Ras Tanura to Japan 84000 cbm


ce

nts

/ga

llo

n

© 2016 IHS 21


100

125

150

175

200

225

250

275

300

325

0

2

4

6

8

10

12M

ar-

15

May-1

5

Jul-15

Sep-1

5

Nov-

15

Jan-1

6

Mar-

16

May-1

6

Jul-16

Sep-1

6

Nov-

16

Jan-1

7

Mar-

17

May-1

7

Jul-17

Sep-1

7

Nov-

17

Jan-1

8

Mar-

18

May-1

8

Jul-18

Sep-1

8

Nov-

18

Jan-1

9

Mar-

19

May-1

9

Jul-19

Sep-1

9

Nov-

19

Jan-2

0

Mar-

20

May-2

0

Jul-20

Sep-2

0

Nov-

20

Jan-2

1

Tto

tal F

leet

Nu

mb

er

of S

hip

s

VLGC Orderbook

Newbuildings Total VLGC's

© 2016 IHS 22


© 2016 IHS 23


© 2016 IHS

US Ethane Exports

• Overwater ethane exports from the US commenced in March 2016

from the Marcus Hook, PA terminal

• Monthly volumes have averaged ~44,000mt

• The destination has thus far been 100% to Europe (Rafnes,

Stenungsund and Grangemouth).

• Gulf Coast ethane exports began in Sep 2016 from Morgans Point

• Large-scaleyreV)s’CELVehtecnodetapicitnaerastropxeenahte

Large Ethane Carriers) are completed and launched from the shipyard

• The Ethane Fleet will (eventually) consist of:

• 15 Ethane Carriers @ 27,500-36,000cbm

• 11 86-87,000cbm(noitcurtsnocrednu)s’CELV

24


© 2016 IHS 25


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Mar Apr May Jun Jul Aug Sep Oct

Gulf Coast East Coast Cumulative total

US Ethane Exports


Mo

nth

ly M

etr

ic to

ns

Cu

mu

lative M

etr

ic T

on

s

© 2016 IHS 26

PDH: US & China


© 2016 IHS 27


0

1

2

3

4

5

6

7

8

9

2015 2016 2017 2018 2019 2020 2021

China US

New PDH Capacity in US and China

Source: IHS © 2016 IHS

Mil

lio

n M

etr

ic T

on

s

© 2016 IHS

PDH projects have come as planned

Under construction Planning Operating

• Ten PDH Projects on-stream

with four million ton capacity

• Two more will be on stream this

year

• All feedstock propane is

imported

• Poor economics challenged

operation

• Most planned projects will not

be built


28

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjxiPS46fvKAhXEGqYKHcR6Ai4QjRwIBw&url=https://en.wikipedia.org/wiki/Outline_of_China&bvm=bv.114195076,d.dGo&psig=AFQjCNF2f0seRJcwgtvJN205PdF3-3xGRg&ust=1455696191317411

© 2016 IHS 29

Panama Canal


© 2016 IHS 30


© 2016 IHS 31


© 2016 IHS 32


© 2016 IHS 33


© 2016 IHS 34


From July to September Eastbound Cargoes from the US Have Utilized The Panama Canal ~30% of the Time

0

5

10

15

20

25

30

35

40

Total Eastbound Exports via Panama

June-July 2016 U.S. to Far East Exports via Panama Canal


Mil

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arr

els

© 2016 IHS

Key takeaways

• Overall Global Overwater LPG Volumes Are Increasing, And Will

Continue To Grow as Production Around the World Naturally Improves

• Much of the Increase Has Been Sourced from the US – Which Will

Continue to be the Case

• The Need for Additional US LPG Marine Capacity is Estimated ~ 2020

• Terminal Fees Should Continue at Below 10cts/gal ($52/mt)

• Market Values In the US relative to Europe and the East Will Continue

to be the Deciding Factor

• PDH Health and Growth Will Clearly Play a Prominent Role

• Freight Rates are – Considering the Orderbook – Likely to Remain

Relatively Depressed

• Panama Canal Will Be Utilized Opportunistically For US Cargoes

Going East

35


IHSTM

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ENERGY Midstream Oil & NGLs Waterborne LPG Overview · 2016. 11. 11. · Presentation IHS...

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