US Gulf Coast LPG prices climbed Tuesday as the Mariner East 1 pipeline halted LPG flow to the water and Chevron Phillips Chemical started its new Baytown, Texas, ethane cracker.
March non-LST ethane rose 75 points to 25.25 cents/gal, a high since February 1. Ethane prices had averaged 24.1 cents/gal in the last month.
Propane and butane also saw gains in the prompt month with propane up 4.125 cents to 79.125 cents/gal and butane up 2.625 cents/gal to 93 cents/gal.
"CP Chem cracker and ethane exports are up, I hear," a trader said. "Combine that with the winter weather the Northeast has been getting and it makes some sense."
Additionally, the Mont Belvieu market has been thin with many market participants on spring break, sources said.
CP Chem said Monday that it had introduced ethane feedstock at its new 1.5 million mt/yr Cedar Bayou cracker. Platts Analytics expects the cracker to consume about 86,000 b/d of ethane at full rates.
However, some sources have noted that many in the market have likely already calculated in the CP Chem startup.
On the East Coast, Energy Transfer's Mariner East 1 pipeline, moving LPG from the Marcellus and Utica shale plays to Energy Transfer's Marcus Hook, Pennsylvania, export terminal, remained out of service.
State regulators ordered the pipeline shut for inspection on March 7 after sinkholes were found near the pipeline and residential buildings in Chester County, Pennsylvania. It was expected to be shut for 10-14 days.
The outage was expected to affect cargoes of ethane and propane loading from Marcus Hook. In fact, market sources have said a 44,000 mt Markwest cargo set to load March 19-21 is not expected to lift.
Markwest had awarded the tender to Dow earlier this month.
The company has reportedly notified customers of a supply disruption in a letter, according to a published report. Platts has not independently confirmed the letter.
A MarkWest spokesman declined to comment on operations, citing company policy. ETP did not respond to requests for updates on Mariner East 1 or its export terminal. A Dow Europe representative did not respond to a request for comment.
Sources have suggested rail as another option for moving LPG to Marcus Hook for export.
(Corrected to move specific price rise figure from first to second paragraph)
