Enterprise Products Partners LP (EPD) late Wednesday said it purchased a 65-acre waterfront site on the Houston Ship Channel to serve as the next phase of expansion at its hydrocarbon terminal.
The property, east of the existing Enterprise Hydrocarbon Terminal (EHT), has two existing docks, dredging infrastructure that would be used for maintenance and dock expansion, and land to expand marine terminaling capabilities. Future plans include constructing at least two deepwater docks capable of accommodating Suezmax vessels, a term used for massive ships that are capable of transiting the Suez Canal.
“As one of the last waterfront properties for sale adjacent to our existing ship channel assets, this strategic acquisition complements our world-class EHT marine terminal and strengthens our position as an industry leader in providing waterborne access,” said EPD general partner CEO Jim Teague.
“The growth opportunities available at the 65-acre site enhance our ability to accommodate growing U.S. hydrocarbon production which is increasingly destined for global markets.”
Combined with the EHT complex, the newly acquired assets would be part of Enterprise’s Gulf Coast network of marine terminals that includes 18 ship docks and eight barge docks. In addition, the Gulf Coast infrastructure system features access to 125 pipelines, 400 million bbl of storage and every refinery in the Houston, Beaumont, Port Arthur and Texas City region, representing more than 4 million b/d of capacity.
In January, EPD and Navigator Holdings Ltd. created a 50/50 joint venture for 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 are to be constructed at a site that was still to be determined. As designed, the export facility is expected to be in service by early 2020 and be able to load ethylene at rates of 1,000 tons/hour.
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 year, it announced it would build the Shin Oak natural gas liquids (NGL) pipeline from West Texas to Mont Belvieu, its massive NGL processing facility near Houston.
“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,” Teague said in January. “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.”
EPD 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. In addition, construction of an ethylene pipeline is underway from Mont Belvieu to Bayport on the Texas coast, which is set to begin operations in 2020.
The land acquisition is “another step in continued positioning for hydrocarbon exports,” noted Tudor, Pickering, Holt & Co. (TPH) in a note Thursday. Other buildouts by EPD were not specified, but they likely are slated for the 2020/2021 timeframe, “increasing the likelihood that additional expansion projects are announced later this year…
“As one of the last remaining parcels of acreage left adjacent to EPD’s complex, we see this news as little more than a formality, but thesis reinforcement is positive,” especially ahead of TPH’s estimate of 500,000 b/d of Permian-sourced liquefied petroleum gas supply growth through 2021.
Last month, Energy Transfer Partners LP (ETP) said it was taking a Chinese petrochemical partner to build an NGL export facility also 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.
Analytics firm GlobalData on Thursday said worldwide polyethylene capacity additions, estimated to reach 9.4 million metric tons/year (mmty) from 2018-2022, would be led by the United States. U.S. capacity additions would be followed by Iran with 5.8 mmty and China with 4.4 mmty.
“The U.S. will account for 26.9% of the total global planned polyethylene capacity additions in 2022,” said the GlobalData forecast. “The country has 18 planned polyethylene plants.”
Among the proposed plants is the PTT Global Chemical pcl project in Ohio’s Belmont County, with the highest capacity of 0.7 mmty, followed by a plant in Bayport — a joint venture between Total SA and Nova Chemicals — with capacity of 0.6 mmty.
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