This is a significant development in the U.S. LPG export sector. ONEOK and MPLX’s decision to invest in a $1.4 billion liquefied petroleum gas (LPG) export terminal in Texas City aligns with growing global demand for propane and butane, especially in Asian and European markets.
A few key takeaways from this project:
- Strategic Timing: The investment follows the apparent reversal of the Biden administration’s LPG export freeze, suggesting a renewed push for U.S. energy exports.
- Joint Ventures: TWO JVs have been formed:
- Texas City Logistics LLC (Export Terminal) – Jointly owned by ONEOK and MPLX (50/50), leveraging Marathon’s infrastructure for cost and timeline benefits.
- MBTC Pipeline LLC (Pipeline) – Owned 80% by ONEOK and 20% by MPLX, linking Mont Belvieu storage to the new terminal.
- Capacity & Product Focus: The terminal will handle 400,000 bpd of low-ethane propane (LEP) and normal butane (NC4), each company securing 200,000 bpd capacity for customers.
- Investment Breakdown:
- Export Terminal: $1.4 billion total ($700M each from ONEOK and MPLX).
- Pipeline: $350 million total ($280M from ONEOK, $70M from MPLX).
- Operational Timeline: Expected completion in early 2028, reinforcing long-term growth expectations in LPG exports.
With this project, ONEOK strengthens its midstream footprint, particularly in the Gulf Coast, where Mont Belvieu serves as the epicenter of U.S. NGL storage and fractionation. The partnership with MPLX (Marathon Petroleum’s midstream arm) further enhances logistical advantages, particularly for LPG exports to high-demand international markets.
