US LPG exports rise to record high, driven by propane/propylene: EIA

New York (Platts)–30Jun2015/527 pm EDT/2127 GMT

US petroleum liquids exports climbed 20.58 million barrels to 148.3 million barrels in April, driven largely by record high exports of liquid petroleum gasses and an increase in distillate exports, Energy Information Administration data showed Tuesday.

US LPG exports climbed 4.07 million barrels to 23.16 million barrels, continuing an upward trend that has been in place for roughly five years. In April 2010, the US exported just 3.65 million barrels of LPGs.

The LPG exports have been driven primarily by propane/propylene, the result of a rapid increase in output stemming from the rise in natural gas production. Combined field and refinery production of propane/propylene was 51.55 million barrels in April, up from 45.84 million barrels in April 2014, with an increase in field production leading the way higher.

The glut of supply has pushed propane prices lower in the US, opening up arbitrage opportunities. The spot price of non-LST Mt. Belvieu propane averaged 54.58 cents/gal in April, roughly 24 cents/gal below the average price of Northwest Europe propane, and 46 cents/gal below the average price of Japan refrigerated propane, Platts data shows.

Those discounts have since widened to average 32 cents/gal and 58 cents/gal so far in June, respectively.

The EIA publishes country of origin data for total LPG exports, although propane/propylene exports at 19.09 million barrels made up the bulk of the total. China was the number one destination of LPGs in April at 3.32 million barrels, with Brazil coming in second at 2.94 million barrels, and Mexico third at 2.89 million barrels.

DISTILLATES DRIVE RISE IN REFINED PRODUCTS

US refined products exports climbed 9.23 million barrels to 86.18 million barrels in April, driven largely by a 5.39 million barrel rise in distillate exports to 37.05 million barrels, the EIA data showed.

The bulk of US distillate exports continue to head to Latin America and Europe. Exports to Europe averaged roughly 475,000 b/d in April, climbing from 228,000 b/d in March, the EIA data showed, driven by increases to the Netherlands and France.

The spot arbitrage to Northwest Europe appeared to be open in April, with US Gulf Coast ULSD delivered to NWE averaging $3.97/mt below NWE cargoes, according to Platts data. The is even wider now, with the discount averaging $9.59/mt so far in June. US CRUDE EXPORTS AT RECORD HIGH US exports of crude climbed in April. Exports, at 17.59 million barrels, were up from 12.94 million barrels in March, and at a record high, EIA data showed.

However, some of those exports were likely re-exported Canadian crude. The EIA bases its crude export figures on US Census Bureau data, which does not include the origin of the crude being exported.

The US exported 523,000 barrels to Spain in April. Spanish refiner Repsol imported 525,000 barrels of Western Canadian Select last October.

The US exported 972,000 barrels to South Korea, which was likely Alaska North Slope crude as the underlying Census data used by the EIA showed the crude leaving Anchorage, Alaska.

Platts reported in April that a Suezmax-sized vessel was loaded with Alaska North Slope crude, and set to arrive in South Korea May 5. ANS crude is exempt from a US law that largely restricts exports of domestic oil.

The US exported 214,000 barrels of crude to China in April, from San Francisco, the Census data showed. That crude could have been Canadian. Statistics Canada data shows 566,100 barrels of Canadian crude heading to China in April.

The US also exported 1.12 million barrels of crude to the Netherlands in April, leaving Houston-Galveston, Texas. Statistics Canada data also shows Canadian crude heading to the Netherlands in April as well, although a much smaller volume — 76,109 barrels.

Another 1.67 million barrels of Canadian crude was exported to the United Kingdom in April, Statistics Canada data showed.

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