USGC-Europe, Asia LPG Arbitrages Soar to 16-Month High
Liquefied petroleum gas (LPG) pricing spreads between the U.S. Gulf and both Northwest Europe and Asia have widened to their highest points since October 2024, as product prices climbed on the news of the halting of exports from Saudi Aramco’s Juaymah natural gas liquid (NGL) terminal in Saudi Arabia.
The arbitrage between the OPIS Mont Belvieu Enterprise (Non-TET) and Far East propane forward assessments jumped $31.75/metric ton and $17.75/mt for March and April, respectively, on Wednesday.
The March spread closed at $287/mt, its firmest level since Oct. 1, 2024, while April closed at $246/mt, the highest since Oct. 24, 2024.
The climb can be attributed the gains posted from the Far East assessments on Wednesday. On Thursday, March contract price swaps opened at $550/mt during market trading in Asia, up from $539/mt at the previous close, OPIS data showed.
Double-digit gains were also recorded on the trans-Atlantic propane spread on Wednesday. The Northwest European propane forward assessment for March climbed $25/mt day on day to close at $515/mt.
Subsequently, the propane arbitrage between the Mont Belvieu Enterprise (Non-TET) and Northwest Europe for March widened to $205/mt on Wednesday, up from $183.25/mt on Tuesday. The spread also reached its widest point since Oct. 1, 2024.
The widening of the arbitrages follows the collapse of a structure carrying propane and butane pipelines at the Juaymah NGL facility in the port of Ras Tanura, Saudi Arabia on Monday. It has been confirmed that all March cargo acceptances from Aramco have been cancelled. The outage duration at the facility was uncertain, however, shipbrokers indicated that this would not be a quick fix.
Saudi Aramco has also delayed the release of its contract price for March, shipbrokers noted. The term prices were due to be released on Friday for the month ahead. The rising arbitrage also offers a greater ceiling for Very Large Gas Carrier (VLGC) prices out of the U.S. Gulf, where demand from Saudi term buyers is expected to grow, shipbrokers suggested to OPIS.
Shipping analytics firm Vortexa indicated that the issue at Juaymah could removed as much as 74% of Saudi Arabian exports through March. A total of 485,000 mt of propane and butane has been exported from the terminal this month, with volumes evenly split, Vortexa data showed.
The latest vessel fixed out of the Mideast Gulf traded at $80/mt on a Ras Tanura-Chiba basis – $13/mt lower than yesterday’s published OPIS assessment.
Reporting by Jamie Aldridge, jaldridge@opisnet.com; Editing by Rob Sheridan, rsheridan@opisnet.com