Like Cushing in Oklahoma rising to global prominence as the benchmark for spot crude oil prices, Mont Belvieu on the Texas Gulf Coast has cemented its standing as the primary pricing point for natural gas liquids (NGLs) used in the petrochemical and energy sectors worldwide.
Strategically located 30 miles east of Houston, Mont Belvieu is the cornerstone for NGL processing and trade. The area's unique naturally occurring salt dome formations provide essential underground storage with a capacity of over 400 million barrels, creating a massive, low-cost storage facility for NGLs such as propane (used for home heating and backyard grilling), ethane (a primary feedstock for ethylene that is converted to polyethylene used in plastic bottles), butane and iso-butane (used as feedstocks and blendstocks in transportation fuels).
Pipelines strategically connect fractionation units – responsible for separating NGL mixtures extracted from natural gas wells into individual components such as ethane, propane and butane – to major NGL consumers across the U.S. as well as to international markets via the import/export terminal on the Houston Ship Channel. Owners and operators of fractionators and storage facilities include Energy Transfer, Enterprise Products, Oneok and Targa Resources. These firms collectively operate a total of 36 fractionation units with a capacity of over 4 million barrels per day.
Since the shale revolution began in 2008, the Mont Belvieu infrastructure has undergone significant expansion. This was driven by a surge in NGL production from the Permian, Eagle Ford and Bakken regions, which led to increased demand from petrochemical industries and a rise in exports to destinations in Europe and Asia. According to the latest data from Vortexa, the biggest international buyers of NGLs were China, Japan, Indonesia and South Korea, alongside the Netherlands, Sweden, the United Kingdom, Spain and Norway. NGLs continue to be a bright spot for growth, contrasting with crude oil, which appears to remain stagnant in 2026.
Total U.S propane exports look set to exceed 1.9 or 2-million barrels per day, an increase of about 10% year-on-year compared to 2024 levels. The latest data from the ship tracking firm Vortexa shows that propane exports have been rising year-on-year for the past several years. Across all the NGLs, the latest forecast from the U.S. EIA shows that total production is expected to reach 7.32 million barrels per day in 2025 and 7.46 million barrels per day for 2026, an increase of around 2% year-on-year.
The increasing adoption of Mont Belvieu pricing as a global benchmark is underscored by the commitment of Indian national oil companies (NOCs) to utilize OPIS Mont Belvieu prices for U.S. origin liquefied petroleum gas (LPG) shipments of propane and butane scheduled for delivery in 2026. This aligns with India’s aim of sourcing 10% of its LPG from the United States.
Strong Financial Links to Mont Belvieu
The growth in U.S. NGL exports to Europe and Asia have helped deepen financial ties back to Mont Belvieu, similar to how U.S. exports of crude oil strengthened the relationship to NYMEX WTI and natural gas to Henry Hub.
The growth in traded volumes across the NGLs market has been robust in Europe and Asia. In the propane market, volumes have continued to rise with average monthly volumes in European propane rising by around 60% year-on-year in 2025 compared to 2024 levels. The latest Exchange data shows that total European propane volumes were around 6,000 contracts per month in 2025. Volumes have also increased in Far East Index propane with overall volumes rising 11% compared to 2024 levels in 2025 with total volumes of around 30,000 contracts per month. Prices tied back to Mont Belvieu have become a popular option for companies as they look to trade the spreads between the hubs in Europe or Asia and the U.S. Gulf, traders say.
As the U.S. has become a key LPG exporter due to increased shale gas production, the influence of Mont Belvieu LPG pricing also grew and was further connected with international markets. Prices across major markets like the U.S., Asia and Europe exhibit strong long-term correlations. However, the inter-regional price spreads between the U.S., Asia and Europe have become volatile, in part due to the changing freight rates and the various supply and demand factors that affect pricing in one region compared to another.
Volatility in these spreads has a direct impact on arbitrage opportunities for exporting cargoes from one region to another. Typically, a discounted price in the U.S. compared to Asia will see higher volumes of exports from the U.S. terminals, analysts have suggested.
Europe Purchases More U.S. Cargoes
As Europe has diversified away from long-term suppliers such as Russia, it has increased imports from regions like the U.S., where production has risen sharply. Total exports of U.S. NGLs to Europe have risen to around 135-million barrels in 2025, an increase of more than 15% year-on-year compared to 2024, according to the latest data from ship tracking firm Vortexa. The higher flows of U.S. NGLs can be hedged using the Mont Belvieu financial benchmark and any regional basis contracts, such as the Argus delivered contract in northwest Europe.
Asia’s Petrochemicals Usage Boosts Demand for U.S. NGLs
Growing propane consumption in Asia, which accounts for about 60% of the world’s population, has been the growth engine for global LPG demand. Both Japan and South Korea have been key import markets where propane is consumed as a chemical raw material and for industrial and commercial uses. Japan’s LPG demand, however, has been in a long-term decline due to factors such as a shrinking population and decarbonization efforts. Nonetheless, the country is expected to remain a key buyer for U.S. propane as it has pivoted away from Middle East suppliers, whose share of the Japanese market is currently down to around 10%.
In recent years, LPG demand has been driven by production capacity increases in Chinese Propane Dehydrogenation Units (PDH), which use propane to make a number of other downstream petrochemical products. According to the Oxford Institute for Energy Studies, PDH capacity in China reached around 22 million tons per year in 2024, accounting for roughly 32% of China’s propylene capacity, compared to 5% 10 years ago. This rapid growth in propane demand has been largely met by the rise in U.S. exports. However, going forward, the country’s PDH sector is expected to see a significant slowdown in expansion given excess capacity and weak economic fundamentals.
On the other hand, India has emerged as another key import market, where LPG plays a vital role as a primary cooking fuel. In a related development focused on fuel diversification, Indian state refiners extended the deadline for a long-term tender to import LPG from the United States in 2026. This move is part of a plan to source more cooking gas from the U.S., which would help reduce India’s heavy reliance on Middle Eastern producers, who currently supply over 90% of its import needs.
While the shifting dynamics of Asia's three largest markets present challenges, the sheer combined demand will continue to make the region a vital destination for U.S. LPG exports. The latest data from Vortexa shows NGL imports into Asia by product. Based on this data, total exports to Asia have been robust in the past 12 months. Total exports from the U.S. reached 520 million barrels in 2025, a slight compared to 2024 levels. Propane accounts for about 60% of total export volumes, in part due to the growth of the PDH plants, which process propane and produce other chemicals like ethylene.
U.S. Mont Belvieu to Remain a Strong Global Benchmark
Mont Belvieu has established its position as the global pricing benchmark for NGLs. A domestic surge in supply coupled with increased exports from the U.S. has integrated Mont Belvieu pricing into international trade, with its references increasingly being used in major consumption hubs in Asia and Europe. As market participants across the globe look to manage their NGL exposure, the importance of derivatives tied to this benchmark will likely continue to grow.
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