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Ethylene exports from the U.S. planned

Enterprise and other firms are looking to build terminals to send the petrochemical building block overseas

by Alexander H. Tullo
July 19, 2017 | A version of this story appeared in Volume 95, Issue 30

Up and down

U.S. exports of ethylene have seesawed in recent years. a Through May.
Source: U.S. Census Bureau.
A bar graph showing ethylene exports in flux from 2010–2017.
U.S. exports of ethylene have seesawed in recent years. a Through May.
Source: U.S. Census Bureau.

Thanks to cheap natural gas from shale, the U.S. has become a large exporter of ethane as a feedstock for overseas ethylene makers. As U.S. chemical projects start to come on-stream later this year, the country will grow as an exporter of ethylene derivatives such as polyethylene.

Now, U.S. companies want to cultivate a chemical commodity that hasn’t been a steady export business: ethylene itself.

Energy services firm Enterprise Products Partners and the marine liquefied gas carrier Navigator Holdings plan to build an ethylene export terminal at Enterprise’s Morgan’s Point complex on the Houston Ship Channel in Texas.

The terminal will have the capacity to load 100 metric tons of ethylene onto ships per hour and could be expanded to 200 metric tons per hour. It will be connected to an ethylene storage facility currently under construction that can hold 270,000 metric tons of ethylene.

Last year, Enterprise opened an ethane export terminal in Morgan’s Point with the capacity to move about 550 metric tons per hour.

At the moment, the U.S. doesn’t have a lot of ethylene export capability. The only such facility is operated by Targa Resources in Galena Park, also on the Houston Ship Channel. According to the U.S. Census Bureau, the U.S. exported nearly 190,000 metric tons of ethylene last year. In 2014, it exported only 3,000 metric tons.

Enterprise isn’t the only company looking to get into the ethylene export business. Odfjell Terminals is considering a facility for its Houston Ship Channel location in Seabrook, Texas.

Ethane is a model for what the ethylene export business could become. Ethane exports have become big as European chemical makers such as Ineos and SABIC look for bargains in the U.S. ethane surplus.

According to the Census Bureau, ethane exports climbed from zero in 2014 to 1.7 million metric tons last year, enough to support two large ethylene crackers. Those numbers likely include exports out of Philadelphia and pipeline exports of ethane into Canada.

A. J. Teague, Enterprise’s CEO, says his firm’s new ethylene terminal will provide “critical market diversification” by giving chemical makers options beyond converting the ethylene into polyethylene resin for export.

An ethylene terminal makes sense to Steve Lewandowski, vice president of olefins for the consulting group IHS Markit. Enterprise is already building an ethylene pipeline through Morgan’s Point, which has dock space available. The company, he says, will likely only need to invest in equipment to chill the ethylene and store it on-site.

The facility should also have customers, Lewandowski says. China is home to many companies that make ethylene derivatives but aren’t integrated with a source of ethylene. As Chinese ethylene makers build their own derivative plants, feedstock is drying up for the nonintegrated players. “There are companies getting desperate to get ethylene supply,” he says.

Lewandowski also sees a market in international companies that have an overhang of ethylene capacity in the U.S. and a deficit in Europe.



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