US Gulf Coast FOB Long-Term Propane Prices Seen at +5-12cts/gal Depending on Length
FOB prices for U.S. Gulf Coast propane cargoes are currently running at about +9-12cts/gal for calendar year 2027 and about +5-8cts/gal for longer-term contracts, market sources told OPIS recently.
OPIS assesses U.S. Gulf Coast FOB spot prices for propane and butane, but the vast majority of U.S. LPG cargoes are exported under long-term contracts that have flat FOB fees.
U.S. LPG terminal owners typically do not disclose the fees they charge spot or longer-term contracts, and they declined to comment for this story. FOB prices are expressed as premiums to the Mont Belvieu commodity charges, so the total cost of the export would be the price of the commodity plus the FOB cost for loading rights.
With a wave of new U.S. Gulf Coast LPG export capacity that started coming online last year, most sources said three-to-five-year deals could be signed at about +5-7cts/gal, the same level as previous recent years. One source said that FOB prices for contracts through 2028 would likely be +6-6.5cts/gal and a “sweet deal” through 2029-31 could likely be had at +5-5.25cts/gal.
But another source said that although the new U.S. capacity might alleviate prices in the shorter term, longer-term prices will likely rise as the U.S. market will still be tight with high demand.
“A year ago some [+]5s[cts/gal] got done for 2026 and beyond,” the source said. “Six months ago I’d have said term volumes could-would-were being done in the upper 5s -lower 6s for the 2028 and onwards time frame. By now, though, I’d be surprised if mid-2026 term is done at anything below 8. The general perception is that terminal space is going to be limited and tight and prices will reflect that. However, no one wants 10 or 15cts/gal contract fees, as that will only invite additional parties to consider establishing competing facilities. So [we had] 5s, then 6s, [and] now 8s.”
The source said longer-term U.S. Gulf Coast LPG export contracts are typically at least three years but wasn’t sure “anyone’s signed at that level [of +8cts/gal] yet, but that’s what is being offered.”
One source said contracts for calendar year 2027 would likely cost +9-10cts/gal, while another said “low double digits [are] being firmly worked [with] vanilla terms” for 2027.
A source said that shorter FOB contracts for the second half of 2026 would likely be priced in the mid-teens or slightly higher.
Longer-term contracts are typically priced higher than expected spot-market prices in exchange for security of supply and protection from spikes in the spot prices. In previous years, U.S. Gulf Coast FOB spot prices were often in the range of +4-6cts/gal, with some buyers telling OPIS at the time they saved money by staying in the spot market.
But that started changing dramatically in the in late 2023 as limited U.S. export capacity amid high global demand helped push up U.S. Gulf Coast FOB spot prices to an average of +15.3cts/gal in March 2024-March 2025. With the help of Energy Transfer’s 250,000 b/d Flexport project coming online in mid-2025, average U.S. Gulf Coast FOB spot prices fell to +5.15cts/gal in April-November 2025 before starting to rise in the winter of 2025.
As of May 8, U.S. Gulf Coast FOB spot prices soared to an average of +33.3cts/gal since the start of the war against Iran on Feb. 28, reaching record highs of +55cts/gal on March 19-23. But in the second week of May, spot prices have plummeted to cancellation economics levels because record-high freight rates have taken most of the arbitrage margin.
Enterprise Products Partners, one of the two largest U.S. LPG exporters along with Energy Transfer, has sold 90% of its NGL export capacity under long-term contracts through the end of the decade, with only 10% available for the spot market, Tyler A. Cott, senior vice president of hydrocarbon marketing, said on a first-quarter earnings call in late April.
The company plans to add 300,000 b/d of LPG export capacity at its Houston Ship Channel terminal by late 2026 and 360,000 b/d of LPG-ethane flex capacity at its Neches River terminal in Beaumont, Texas, in the first half of 2026.
U.S. NGL export capacity totals 3.4 million b/d, while U.S. propane exports have averaged 1.938 million b/d this year through May 1, compared to the year-ago average of 1.848 million b/d, according to the latest data from the Energy Information Administration.
Reporting by Ron Nissimov, rnissimov@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com