16 February 2011 22:45 [Source: ICIS news]
HOUSTON (ICIS)--The surge in US waterborne chemical shipments on inland waterways stems directly from the nation’s low natural gas prices, the top executive of the country’s largest barge operator said on Wednesday.
Because natural gas is used as a feedstock for most petrochemicals, low natural gas prices have given the industry and chemical shipping on the US Gulf coast a boost globally said Joe Pyne, chairman and chief executive of Kirby.
“That’s a game-changer,” Pyne said at an investment conference in Florida. “The US petrochemical industry is competitive all over the globe now and it’s all because of feedstock costs.”
US natural gas prices fell to $3.92/MMBtu on Wednesday and remain well below prices for the commodity in Europe, where gas costs more than twice as much, around $8.40/MMBtu in the UK and Europe.
“And it looks like that’s sustainable,” Pyne added. “You’re actually going to see volume increases in US chemicals going forward because of that.”
Much of Kirby’s business depends on shipping petrochemicals by barge along the US Intracoastal Waterway in Texas, Louisiana and along the Mississippi river.
Chemical and petroleum shipments on US waterways in January rose almost 29% in January compared with the same month last year, according to an indicator released this week by the US Army Corps of Engineers.
In addition, petroleum and chemical shipments on US inland waterways have increased year over year for 13 of the past 14 months, according to a monthly indicator by the Corps's Waterborne Commerce Statistics Center in New Orleans, Louisiana.
The indicator tracks chemical and barge shipments on the Mississippi and Ohio river systems. The Corps's data does not track specific chemicals or petroleum products each month, but only as a generic group.
($1 = €0.74)
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