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Energy Transfer, Chinese Partner Unveil Plans for Ethane Export Terminal on Gulf Coast

Energy Transfer Partners LP (ETP) said Thursday it is taking a Chinese petrochemical partner to build a natural gas liquids (NGL) export facility on the Gulf Coast.

With Satellite Petrochemical USA Corp., ETP is jointly partnering in Orbit Gulf Coast NGL Exports LLC, which would have a 800,000 bbl refrigerated ethane storage tank and a 175,000 b/d ethane refrigeration facility. The ETP-operated project would provide ethane for Satellite’s cracking facilities in Jiangsu province.

No financial details were disclosed, nor did the partners offer information about where the terminal would be sited.

ETP agreed to build a 20-inch diameter ethane pipeline that originates at its Mont Belvieu fractionation facility near Houston for deliveries to Orbit and to domestic markets. Under the agreement, Satellite would receive 150,000 b/d of ethane under a long-term, demand-based contract, as well as storage and marketing services.

Dallas-based ETP also agreed to construct and own the infrastructure to supply ethane to the pipeline, as well as load it on Very Large Ethane Carriers, i.e. VLECs, destined for Satellite’s crackers.

Pending Chinese government approval, Orbit could be ready for commercial service by late 2020, ETP said.

ETP has pipeline and NGL projects across the country, with growing liquids volumes from the Permian Basin moving to Mont Belvieu, which in turn could help supply the Orbit project.

During conference call to discuss 3Q2017 earnings, ETP COO Marshall McCrea said basis differentials at the Waha Hub in the Permian could "blow out materially" over the next year or two, and the midstreamer sees opportunities to capture value.

ETP management is “extremely optimistic over the next 12-14 months that the basis will blow out, probably blow out materially...We're actually going to be feeding that with a lot of these projects that we're bringing on and ramping up with our processing plants and with our Red Bluff upstream intrastate."

McCrea said the company was evaluating other ways “to more efficiently and inexpensively move volumes out by expanding systems that we have or using systems that we have in different manners.”

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