Enterprise Products Partners LP and Navigator Holdings Ltd. have clinched a 50/50 joint venture to launch an ethylene export project on the Gulf Coast that would be able to export up to 1 million tons/year.
Refrigerated storage for 30,000 tons of ethylene would be constructed at a site that is still to be determined, the partners said. As designed, the export facility could be in service by early 2020 and be able to load ethylene at rates of 1,000 tons/hour.
According to the sponsors, the project is supported by long-term contracts with anchor customers that include Flint Hills Resources and an undisclosed Japanese trading company. However, a final investment decision is subject to “reaching acceptable arrangements with local taxing authorities.”
Houston-based Enterprise has been pondering an ethylene export project for months, keyed in part to the massive production growth in the Permian Basin. Last spring it announced it would build the Shin Oak natural gas liquids pipeline from West Texas to Mont Belvieu on the Texas coast.
“This new ethylene export terminal will support the growing production of ethylene on the U.S. Gulf Coast by providing access to international markets,” said Enterprise’s Jim Teague, CEO of the general partner. “By 2021, the petrochemical industry is expected to expand aggregate ethylene production capacity in Texas and Louisiana by nearly 50% to approximately 90 billion pounds per year.
“The resulting rapid growth in the supply of U.S. ethylene, combined with increased demand from international markets like Asia creates an ideal scenario in which markets abroad are able to diversify their supply by accessing cost-advantaged feedstocks made possible by the shale revolution in the United States.”
The export terminal would offer “diversification opportunities for domestic petrochemical producers who will not have to rely solely on the export market for derivatives like polyethylene,” Teague said.
Navigator Gas CEO David Butters said the “broad interest shown by prospective terminal customers during the initial marketing phase has reinforced our conviction on the critical need for an ethylene export terminal.
“It is clear that domestic producers value the opportunity to access global markets and international consumers consider the U.S. as a reliable and affordable source of ethylene to fuel their petrochemical manufacturing in Europe and the Far East.”
Enterprise also is developing a high-capacity ethylene salt dome storage facility at Mont Belvieu, set to begin service in early 2019 with 600 million pounds of capacity and an injection/withdrawal rate of 420,000 pounds/hour. The midstream operator also is building an ethylene pipeline from Mont Belvieu to Bayport, TX, which is set to begin operations in 2020.