Additional propane to be shipped via pipeline to ease shortage
NEW YORK, Feb 10 (Reuters) - Enterprise Product Partners LP said on Monday it would ship more propane to the U.S. Northeast and Midwest after a federal regulator ordered shipments of the heating fuel to be prioritized as a brutal cold grips the region.
Enterprise told shippers it would inject an extra 150,000 barrels of propane into its pipeline on Monday and 350,000 barrels on Thursday. Later, in a filing with the Federal Energy Regulatory Commission (FERC), it said it was willing to continue prioritizing shipments until Feb 21.
FERC used its emergency powers for the first time last Friday to order more shipments of the heating fuel along Enterprise's TE Products pipeline for one week in light of a shortage in parts of the country.
The 20-inch TE Products pipeline, running from the Gulf Coast to the Northeast and Midwest, resumed normal operations late on Saturday after an outage had shut operations between Texas and Arkansas, Enterprise told shippers on Sunday.
The pipeline ships diluent, gasoline as well as other natural gas liquids aside from propane. Enterprise said delivery of other refined products will be delayed by 36-48 hours due while it prioritizes propane shipments.
FERC's order came after the National Propane Gas Association, together with several suppliers, petitioned the regulator to order Enterprise to ship more propane.
"Enterprise TE believes that if the (FERC) order is extended by an additional seven days i.e., through Feb. 21, 2014 ... it will be able to satisfy fully the concerns raised in the petition," Enterprise wrote in a filing.
"Enterprise TE therefore states its willingness to accept such an extension."
A combination of high demand due to a cold winter and a late harvest and historically low inventories has led to the shortages around the upper Midwest causing governors of several states to declare states of emergency.
Propane prices at Conway, Kansas, a storage hub, spiked to a record $5 a gallon at the end of January but have since come down to pre-crisis levels at below $2 a gallon.
Enterprise, an energy midstream company, is the largest shipper of propane in the country. Kinder Morgan and ONEOK are two other shippers and have both adjusted operations along their lines to increase supplies.
Propane inventories in the Midwest rose slightly at the end of January but at 9.6 million barrels, they were still at an all-time low for this time of the year, according to weekly Energy Information Administration data.
On the East Coast they slipped almost half a million barrels to 2.2 million barrels, their lowest level for this time of the year since 1994.
Nationwide, demand for propane fell at the end of January to 1.3 million barrels a day (bpd) from around 1.7 million bpd in the first weeks of January, EIA data showed, although it does not breakdown that data into regional demand.