(Adds pipeline allocation, propane prices, background)
NEW YORK Feb 11 The U.S. Federal Energy
Regulatory Commission extended an order to Enterprise Product
Partners to prioritize shipments of propane along its pipeline
running to the Northeast and parts of Midwest after weeks of
freezing weather caused shortages.
Enterprise had previously said it was willing to agree to
such an extension for its TE Products pipeline after FERC used
emergency powers for the first time in issuing the original
order last week.
The National Propane Gas Association and some suppliers
first asked FERC to take action after high demand during a
colder than expected winter and low inventories led to rationing
and price spikes in the Midwest and the Northeast.
Enterprise said last week the prioritization of propane
along the line would lead to the late arrival of other products
such as gasoline and diluent by 36-48 hours.
On Tuesday, it told shippers that the pipeline would be on
allocation for some of its shipment cycles in March, which means
the pipeline has been oversubscribed by users and volumes will
be rationed between them.
Propane prices at the Conway, Kansas, storage hub shot up
last month as markets reacted to the shortage and reached record
highs of around $5 a gallon. They traded at around $1.75 in the
days before the crisis began in early January.
On Tuesday, spot propane for February delivery at Conway,
traded at $1.58 a gallon, after earlier in the day trading as
high as $1.70. February barrels were traded late on Monday at
$1.85 a gallon, but had traded as high as $1.90.
At the key Gulf Coast hub at Mont Belvieu, Texas, spot
propane traded on Tuesday in a range from $1.52 to $1.67 a
gallon, after trading late on Tuesday as high as $1.69.
(Reporting by Sabina Zawadzki; additional reporting by Robert
Gibbons; Editing by David Gregorio)