26 June 2012 23:11 [Source: ICIS news]
HOUSTON (ICIS)--Enterprise Products issued a memorandum to its natural gas liquids (NGL) customers, saying that its Gulf coast storage will only take product up to customers’ contracted storage maximum because of climbing inventories, a consultant said on Tuesday.
The statement was issued to customers about two weeks ago from Enterprise Products, said Dan Lippe, president of Petral Consulting.
Lippe said if a company has already met its contract maximum, it would have to remove product from storage immediately.
Enterprise Products has 34 underground caverns with aggregate storage capacity of about 100m-120m bbl in Mont Belvieu, Texas, according to the company.
Mont Belvieu's NGL storage capacity is the largest in the world.
Enterprise did not immediately respond to confirm the memorandum.
The high inventories come as NGL prices remain low.
On Monday, Mont Belvieu ethane prices were at 27.75 cents/gal, the lowest price since September 2002.
If monthly increases to NGL storage at Conway continue at historical averages, Lippe said NGL inventory will exceed storage capacity by July or August.
Shippers are bypassing the midcontinent NGL storage hub in Conway, Kansas, to store supplies on the Gulf coast, consultants said.
In addition, Canada ships two-thirds of its propane to the Conway this time of year, and the volumes from Canada are currently bypassing the midwest and moving directly to the US Gulf for storage, said Anne Keller, president of Midstream Energy Group.
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