Propane
Propane demand comprises about 40% of the natural gas liquids market or 1200 bbls/day. This market is also the largest and most liquidly traded market of the natural gas liquids. Its primary demand components are for home heating and as a feedstock for the chemical market. Much of this product physically moves through the US Gulf Coast due to its proximity to major chemical/refinery complexes, liquids pipeline and storage hub (Mt. Belvieu, TX), major energy shipping ports and that the Southwest U.S. and Gulf of Mexico are a major North American natural gas producing region. Mt. Belviue, TX has long been the Worldwide Hub for propane and much of the natural gas liquids trading for many of the reasons listed above and specifically the vast saltdome storage capacity and the pipeline, which connects Mt. Belviue to the Northeast and numerous places in between, commonly known as the "TET" pipeline.
Most of the liquidity in the propane market is physical and financial contracts tied to the TET pipeline pricing. This has developed as the TET pipeline is the largest single Propane pipeline in the world and directly impacts propane pricing for the Southwest, Southeast, Ohio Valley, and Northeastern United States.
The second most liquid US propane location is Conway, Kansas. This location in southern Kansas is a Midwest production gathering site, and chemical/refinery complex. Conway is also tied to Mt. Belivieu by a mostly southerly flowing pipeline.
The New York Mercantile exchange offers a financial contract tied to TET, but the vast majority of the financially or physically traded volumes are executed in the "over the counter" (OTC) market.