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Targa confirms 3 LPG cargo cancellations for year-to-date, some delivery deferrals
HOUSTON, August 3, 2016 (PCW) –- Targa Resources on Wednesday said it had three LPG cargo cancellations for the year to date (one in June, two in July) and had some customers opt to defer cargo deliveries to later dates.
Targa opted to address the issue amid intense market chatter about cancelled cargoes, largely from customers who are dealing with delays with propane dehydrogenation units in China. Last week Enterprise Product Partners confirmed the cancellations of three LPG cargoes from its Ship Channel marine terminal. In August, EPD has received notifications from customers cancelling five cargoes.
Targa on Wednesday emphasized that 75% of the LPG cargoes exported from its Galena Park terminal head for destinations in South America, Latin America and the Caribbean. “Targa is less impacted by dynamics in Asian markets,” CEO Joe Bob Perkins said.
Targa continues to expect an average of 5 million bbs/month of LPG export cargoes, although Perkins noted volumes would be lower in the third quarter, relative to 1Q and 2Q.
The company, however, is tabling a potential ethane export project that it has done some initial project engineering work on. Executives said it was difficult to get long-term contracts in place to support ethane exports given the current slate of ethane demand projects that are expected to come online.
Enterprise is currently loading its first ethane vessel from its new 200,000 b/d ethane export terminal on the Houston Ship Channel and earlier this year, Sunoco Logistics’ Marcus Hook terminal began exporting ethane.
On Wednesday, Targa also reported a net loss of $52.6 million in the second quarter, compared to the $15.2 million seen in 2Q 2015 due to lower commodity prices and lower fractionation and export fees. -- Samantha Hartke