News
19/05/26
US investment in ethane export infrastructure grows
Midstream operators are upbeat about the prospects of continued ethane export
demand growth as Mideast Gulf disruption continues, writes Joseph Barbour
Houston, 19 May (Argus) — US midstream firms have announced further investments
in ethane infrastructure in their latest first-quarter results releases in the
wake of strengthening international demand for the petrochemical feedstock given
a tighter LPG export market. Energy Transfer plans to build a 3mn bl (169,000t)
ethane storage cavern at its Mont Belvieu NGL storage and fractionation hub in
Texas, the company said on 5 May. Completion of the cavern is scheduled for
2027. This announcement comes as the firm extends most of its existing long-term
ethane contracts out to 2041 and considers whether to further expand its
Nederland LPG and ethane export facility on the Gulf coast, where it launched
182,000 b/d (3.8mn t/yr) of capacity in 2021 . "There's between 500,000 and
750,000 b/d of ethane interest around the world from new [ethane-fed] crackers,"
co-chief executive Marshall McCrea said earlier this month. Energy Transfer is
also expanding its Marcus Hook LPG and ethane terminal to ship 20,000 b/d more
ethane, which is on track for completion in the third quarter of next year.
Enterprise Products — the only other US midstream firm that exports ethane — is
also aiming to increase its ethane shipments overseas. The company began loading
propane from its Neches River terminal near Beaumont, Texas, in April , which
was originally built to ship 120,000 b/d of ethane and ethylene, following an
upgrade that allows it to export a further 180,000 b/d of ethane or 360,000 b/d
of propane, or a reduced combination of the two. Enterprise expects to begin
loading ethane from the expanded capacity this month, although it says it will
be prioritised for propane contracts before 300,000 b/d of LPG capacity at the
company's Houston LPG terminal comes on line later this year. The planned
expansions to US ethane infrastructure are happening alongside a growing pull on
LPG exports. Energy Transfer and Enterprise reported record NGL exports during
the first quarter, most of which was LPG — the latter shipping 1.1mn b/d of
NGLs, up 10pc on the year, and the former shipping 19pc more without disclosing
the volume. Demand for US LPG and ethane continues to be bolstered by the
US-Israel war with Iran, which has effectively shut off Mideast Gulf LPG supply.
The impacts from Middle Eastern supply disruption are likely to extend well into
the future, Enterprise said. The winds of war Other midstream firms in the US
NGL space are similarly upbeat on export demand. The current environment "will
continue to [provide strong] tailwinds for Gulf coast exports", Phillips 66
vice-president Don Baldridge said on 29 April, adding that the firm's Freeport
LPG terminal should benefit from this. The facility in Texas shipped a
record-high 319,000 b/d (2.5mn t) during the first quarter, Kpler data show —
the company did not provide an estimate. Targa Resources declared force majeure
on LPG loadings at its 175,000 b/d Galena Park LPG terminal in Texas in March,
yet it expects loading to reach a new high at the facility in the second
quarter. The company's planned expansion of Galena Park to 625,000 b/d is on
track for completion in the third quarter of 2027 and will be "much needed when
it comes on line", Targa said in early May. The midstream operators reported
other NGL operational records in January-March. Enterprise, Energy Transfer and
Targa posted quarterly highs in NGL fractionation — at 1.9mn b/d, 1.21mn b/d and
1.15mn b/d, respectively. Targa's 150,000 b/d fractionator 11 in Mont Belvieu,
Texas, came on line in April, with its same-sized 12 and 13 fractionators due to
start up in early 2027 and 2028, respectively. Energy Transfer's 165,000 b/d
fractionator IX in Mont Belvieu is scheduled to open in the fourth quarter. And
Enterprise and Energy Transfer achieved record NGL pipeline transportation
volumes of 4.88mn b/d and 2.43mn b/d, respectively. US ethane exports Send
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