Houston marine terminal operator Moda Midstream is already exporting crude oil from its Ingleside facility, but the company is making multimillion dollar upgrades to use the twin storage tanks to ship propane and butane to customers around the world.

Known in the oil and gas industry as LPGs, propane and butane are byproducts of oil and natural gas extraction and the refining process. The two gases can be compressed into a liquid form at relatively warm temperatures and low pressures, making them easy to store and transport. They are typically stored outdoors in giant spherical or pill-shaped tanks.

Along with the bounty of oil and natural gas, the shale revolution has produced record volumes of liquefied petroleum gases, which include propane and butane, as well as ethane, a feedstock for petrochemicals and plastics.

Moda Midstream is aiming to turn its Ingleside complex into an alternative to Mont Belvieu, the national hub for LPGs located about 30 miles east of Houston. Prices for propane and butane are set based what’s called the Mont Belvieu index.

Propane is currently trading at around 68 cents per gallon and butane is trading just below 83 cents per gallon but prices for both are higher overseas. The two gases are replacing wood, coal and animal dung as sources for cooking and heating in the developing world while petrochemical plants in Asia and Europe are them using as feedstocks.

“A lot of customers that we’ve talked to would like to have an alternative area besides Mount Belvieu for LPG operations,” said Moda Midstream CEO Bo McCall.

Moda said it is in discussions with multiple companies to buy LPGs stored at the Ingleside facility. The two above-ground spheres each store 40,000 barrels of LPGs but with more capacity coming to the Coastal Bend over the next two years, the company has room to expand.

San Antonio pipeline operator EPIC Midstream Holdings is building a pipeline that is expected to begin moving petroleum gases from the Permian Basin of West Texas and New Mexico to the Corpus Christi area in early 2020.

EPIC operates a processing plant, called a fractionator, in Robstown, about 35 miles from Ingleside. It will process the raw gas and separate it into products such as ethane, propane, and butane for export or use in local petrochemical plants. McCall said those gases can easily be shipped to Moda’s Ingleside facility for export.

“With all the big new petrochemical plants that have been announced and being constructed in the Coastal Bend expected to consume a lot of the ethane — the propanes, the butanes and the heavier products will have to go to the water,” McCall said. “We’re trying to position ourselves for that.”

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