OPIS Insights

U.S.-China trade disputes and new capacity at Energy Transfer’s NGL export terminal in Nederland, Texas, affected the U.S. Gulf Coast FOB propane resale market in unexpected ways in 2025. And the new year could hold more surprises for the market as Enterprise Products Partners is scheduled to bring a major expansion online at its export terminal in the Houston Ship Channel.

The trade dispute between the U.S. and China reduced arbitrage margins between the Gulf Coast and Far East Asia, tightening FOB values to single-digit premiums over Mont Belvieu starting in late March. That was a turnaround from 2024, when FOB values averaged 16.1cts/gal over Mont Belvieu—at one point reaching a record 35ct/gal premium—and early 2025, when cargoes were valued at about a 10ct/gal premium to Belvieu. OPIS assesses the Gulf Coast FOB spot market as a premium paid for the loading slot, in addition to the underlying commodity charge.

Enterprise officials highlighted the repercussions of the declining premiums in a second-quarter earnings call in July. At the time, Enterprise said its LPG revenue fell 46% year-to-year on a 60% drop in spot cargo loading fees and lower long-term loading fees. Enterprise co-Chief Executive Jim Teague said at the time that the U.S. NGL export “market is fundamentally shifting” to accommodate lower spot and term loading fees due to new capacity that has come online or is being built.

China, which is typically the largest buyer of U.S. propane exports to feed propane dehydrogenation plants, has curbed U.S. purchases and has reportedly been increasing buying from the Middle East. From May to September, China’s U.S. propane purchases averaged 172,500 b/d, according to the latest data from the Energy Information Administration. That was well below the 329,500 b/d average reported for the same period of 2024.

But overall U.S. propane exports have remained strong, averaging 1.735 million b/d from April through September, roughly in-line with the 1.728 million b/d average over the same period of 2024, according to EIA. Some of the volumes no longer taken by China were shipped to other Asian buyers, including India, Singapore and Vietnam. Through early November 2025, Energy Transfer accounted for 35% of U.S. exports, Enterprise 34%, Targa Resources 15%, Phillips 66 14% and others 4%, Energy Transfer’s head of international NGL marketing, Kent Holmstrom, said at the OPIS Global LPG conference in early November, citing data from analytics firm Kpler.

Energy Transfer’s Flexport expansion that began operating in 2025 at the company’s NGL export terminal in Nederland, Texas, also put pressure on FOB spot prices by alleviating some of the previous U.S. export constraints, sources said. The $1.5 billion expansion added 250,000 b/d of flexible export capacity, with propane exports starting in July. Market sources recently said the new export capacity at Nederland has shaken up both domestic and FOB propane markets at Mont Belvieu.

Export customers are reportedly procuring some propane in the open market to export out of Nederland, and that has pushed TET propane higher. Spot Mont Belvieu TET and non-TET (or Enterprise) prices have historically mirrored each other. But between May 1 and Dec. 5, TET shifted to an average premium to non-TET of 2.25cts/gal. That premium widened to as much as 5.52cts/gal in November. The disparity resulted recently in an atypical, two-tiered FOB pricing system, in which spot cargoes are priced at different premiums depending on whether they are loaded at Energy Transfer or Enterprise facilities, sources said.

To account for higher spot TET propane prices, the FOB premiums for Energy Transfer supplies have generally been priced at a 2-2.5cts/gal discount to Enterprise, sources said. Holmstrom said the Nederland expansion is likely responsible for the TET premium, but added that TET and non-TET prices should eventually flatten out again. An Energy Transfer spokesperson told OPIS in December that comments made during the company’s third-quarter earnings call in November shed further light on the issue.

Chief Financial Officer Dylan Bramhall said then that term contracts for the Flexport expansion start on Jan. 1 and until then the company is using the new capacity to sell some spot volumes. “And so, while we’ve got a little bit of spot volumes running here through the third and fourth quarters, we’re going to get the full impact of Flexport coming online” after Jan. 1, he said.

Holmstrom in November said Energy Transfer’s total NGL pipeline and fractionation capacity is expected to increase to about 1.3 million b/d by the end of 2026, with the 165,000 b/d Mont Belvieu Frac 9 unit, a 170,000 b/d NGL expansion to delivery more Y-Grade to Mont Belvieu, and a 40,000 b/d natural gasoline pipeline expansion that will delivery supply from Mont Belvieu to Nederland all under construction.

FOB prices could face further pressure in the new year as Enterprise’s own export expansions come online, sources said, particularly given that it remains uncertain whether China will resume its previous levels of U.S. purchases. The company is adding refrigeration at its Enterprise Hydrocarbons Terminal in the Houston Ship Channel, increasing combined propane and butane export capacity by about 300,000 b/d by late 2026. In addition, the Enterprise is adding a flexible refrigeration unit at its Neches River Terminal in Beaumont, Texas. This unit would have export capacity of up to 180,000 b/d of ethane or 360,000 b/d of propane, or a combination of the two and is scheduled to enter service in the second half of 2026.

One source expects long-term FOB premiums in 2026 will be at about 7.5cts/gal, adding that 2026 will be marked by “aging production, higher exports, volatile freight, wonky arb, and above average terminal fees.”

Reporting by Ron Nissimov, rnissimov@opisnet.com and Priscilla Antunes, pantunes@opisnet.com; Editing by Jeffrey Barber, jbarber@opisnet.com

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