www.fueloilnews.com | FUEL OIL NEWS | DECEMBER 2015 17
the competing petrochemical feedstock
to propane. In 2005, when the United
States was still a net importer of pro-
pane, the U.S. price of propane at Mont
Belvieu, Texas, averaged a 3-cent per gal-
lon (gal) premium to ACP (Figure 1). As
growing U.S. propane exports reached
terminal capacity limits, Mont Belvieu
prices became discounted compared with
the international market, averaging an
89-cent/gal discount in 2012. The wide
price differential prompted new export
capacity terminal construction, providing
an outlet for stranded U.S. propane into
the international market. With the expan-
sion of export capacity in the United States,
the spread between international and U.S.
propane prices has gradually narrowed.
The discount for Mont Belvieu propane
prices compared with ACP declined from
an average of 77 cents/gal in 2013 and 59
cents/gal in 2014 to 40 cents/gal for January
through September 2015.
U.S. exports of propane were initially
sent to nearby markets in Mexico, the
Caribbean, and South America. U.S.
exports to these destinations more than
doubled between 2010 and 2013, from
88,000 b/d to 198,000 b/d (Figure 2).
By the latter half of 2013, substantial
quantities of U.S. propane exports were
being sent to the European market, help-
ing to offset declines in regional propane
production.
If current pricing trends continue,
growing petrochemical demand, espe-
cially in Asia, will be the primary market
for further increases in U.S. propane
exports.
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