December 7, 2015 [OPIS] - Sea-3's propane terminal in Newington, N.H., looks poised to become the key storage play in the U.S. Northeast after years of idleness as it received the green light last month to proceed with expansion plans that will help bring supply stability to the region and open up export opportunities.
After almost two years of community stalling and appeals, Trammo-owned Sea-3 reached a settlement on Nov. 6 with the cities of Portsmouth and Dover and the New Hampshire state attorney’s office and gained an exemption from a full-year review from the state’s Site Evaluation Committee that will allow the company to commence works immediately.
The project involves reconfiguring the terminal to accommodate increased propane volumes via rail cars and allow bulk storage options, and to allow for seaborne exports to the international markets alongside distribution to domestic customers via trucks.
Under the terms of the settlement, Sea-3 is limited to receive no more than 16 propane rail cars per day — up from six presently — and no more than 33,000 gallons per car to bring the maximum inflow rate close to 12,600 b/d. Permission to increase the daily amount of propane transported in would require further approval from the committee.
According to Sea-3 Vice President Paul Bogan, the project could be completed in early 2017.
“It’s about securing the cheapest supply and stabilizing the NE region,” a source told OPIS, providing a cushion to potential price spikes in the event of cold weather or breakdowns in the rail car service.
Newington is not connected to a major propane supply pipeline, and vessel restrictions prevent the import of seaborne cargoes from other domestic terminals.
“It’s a crucial part to stabilizing the region,” the source said.
The expansion includes the installation of three 90,000-gallon above-ground tanks and associated chilling and pumping equipment in order to refrigerate and bulk store the pressurized propane is being railed in. Work also involves the construction of a new railroad siding to accommodate up to 10 rail cars in addition to upgrades to the existing siding.
Newington will become the third terminal on the U.S. East Coast with LPG export capability alongside Marcus Hook, Pa., and Chesapeake, Va., where handy-size LPG cargoes are regularly flowing across the Atlantic to Europe, the Mediterranean and Africa.
OPIS understands that Newington would export at times of surplus in the summer or when international prices were attractive, rather than dedicate a year-round flow.
Potential propane exports from Newington could be some of the largest cargo sizes on the U.S. East Coast, while load rates were said to be around 750 tons per hour (9,300 bbls/hr). The terminal is capable of receiving large gas carriers of up to 59,000 cbm capacity, while market sources added that some 78,000 cbm Panamax gas carriers could potentially be received at the port for express passage to Asia.
Newington, on the Piscataqua River, has historically operated as a seaborne import facility and distribution terminal largely to meet heating demand in the New England region. The terminal has a refrigerated storage capacity of 560,000 bbl (89,000 cbm), but has been largely unutilized for the past three to four years as higher international prices for propane rendered imports prohibitive.
In the past year, Sea-3 imported just one 33,000-ton propane cargo from Norway’s Karsto into Newington in early September at a European-based price, where up until 2012, propane cargoes were imported monthly from Algeria.
The company also operates a propane terminal at Tampa, Fla.
