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DIGITAL EDITION
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THIS WEEK'S TOPIC:
PROPANE SUPPLY AND DEMAND
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Propane supply situation draws industry’s attention
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Many in the propane industry have noted supply concerns in recent weeks, with increased export demand, increased production capabilities and decreased supply levels. The following are some of the latest developments LP Gas magazine has noticed regarding propane supply.
Recent discussions reveal growing concerns about propane availability
As we approach the midpoint of 2017 (which is hard to believe), the basic principles of propane supply and demand have captured much of the industry’s attention.
This column, by Editor-in-Chief Brian Richesson, offers a rundown on this year's propane inventory levels, as well as a supplier's perspective on the U.S. supply picture.
ICF's Mike Sloan, left, and Eric Kuhle presented a propane market outlook in April at the NPGA Southeastern Convention & International Propane Expo.
Propane industry leaders respond to supply concerns, plan next steps
Increased propane production levels and export demand, along with decreased domestic demand, have pushed the topic of propane supply to the forefront of many retailers’ minds.
According to a letter emailed to propane industry members in late April, the National Propane Gas Association and the Propane Education & Research Council (PERC) are taking steps at the federal, state and industry levels to address propane supply issues and help ensure reliable access to propane. Read more on this development.
Photo courtesy of PERC.
In the Know: Propane Inventory
As we head into the dog days of summer, propane inventory builds are quickly becoming the dog. Traders are watching the inventory builds closely. Every week that we do not build 2.5 million barrels or more, it adds to every future week needing a larger build than the previous week.
With this in mind, Propane Resources' Jeff Thompson provides a snapshot of the propane inventory picture going into the summer-build season.
(continued below)
Other news and notes
Several items have come across our desk recently that highlight propane demand areas. Propane is converted to propylene, which is used to manufacture plastic products, at propane dehydrogenation (PDH) facilities.
Honeywell UOP commissioned the operation of the largest single-train PDH unit in China at Yantai Wanhua Polyurethanes Group Co. Also, Pembina announced that it's moving forward with a PDH facility in Alberta, Canada.
Two PDH plants are in operation in the United States – at PetroLogistics in Houston and Dow Chemical in Freeport, Texas. An Enterprise Products Partners plant is under construction, and the potential exists for a host of other facilities in the U.S. and Canada, ICF reports. Until these other projects come to fruition, ICF looks for petrochemical demand to slow through 2025.
Propane exports is one demand area that has seen a great deal of activity in recent years. Royal Vopak and AltaGas Ltd. entered into a joint venture agreement to invest in the development of the Ridley Island Propane Export Terminal. The terminal is expected to be the first propane export facility off the west coast of Canada, located near Prince Rupert, British Columbia.
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WHAT IS COST MANAGEMENT SOLUTIONS?
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The Propane Price Insider is an email service that provides:
- Three daily price Flash Wires
- Periodic option quotes
- Wednesday inventory data updates around 11 a.m. ET
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Evening report with executive summary, weather maps and complete review of energy prices that are based on propane's Btu equivalent
For a free 10-day trial subscription by email, sign up online here or call 888-441-3338.
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Cost Management Solutions LLC (CMS) is a firm dedicated to the analysis of the energy markets for the propane marketplace. Since we are not a supplier of propane, you can be assured our focus is to provide an unbiased analysis.
Contact us today to see if you can benefit from having the Energy Price Watchdog working for you.
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Many retailers simply don't have time to analyze the large amounts of data to make an informed purchasing decision.
We offer:
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Detailed market recommendations on hedge and pre-buy entry points
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Prompt market execution of hedging strategies
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Supply cost analysis and recommendation as to effective hedging strategies
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Large volume consideration when we place your hedges
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GOT STORY IDEAS? Email Brian Richesson, Editor in Chief
LOOKING FOR ADVERTISING OPPORTUNITIES? Email Brian Kanaba, Publisher
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