Enterprise Products Partners, a US-based midstream company and UK shipping company Navigator Gas have formed a 50/50 joint venture to build a new ethylene export facility along the US Gulf Coast.
The export facility will have the capacity to export around a million tons of ethylene annually. It is expected to support the increasing production of ethylene on the US Gulf Coast by offering access to international markets.
Navigator Gas CEO David Butters said: “The strong, 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 and Navigator are yet to decide the location of the terminal. Along with final investment decisions, the choice of the location will be subject to arriving at acceptable arrangements with local taxing authorities.
As per the plans, a refrigerated storage facility for 30,000 tons of ethylene will also be built on-site to provide the capability to load the commodity at 1,000 tons per hour.
The partners expect to bring the facilities in service by the first quarter of 2020. Long-term contracts for the export terminal have been secured with anchor customers like Flint Hills Resources, a US-based ethylene producer and an unnamed Japanese trading major.
Enterprise's general partner CEO A.J. "Jim" Teague said: “By 2021, the petrochemical industry is expected to expand aggregate ethylene production capacity in Texas and Louisiana by nearly 50 percent 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.”
Enterprise is also developing an ethylene salt dome storage facility at its complex in Mont Belvieu, Texas which will have a capacity of about 600 million pounds with an hourly injection/withdrawal rate of 420,000 pounds.
Additionally, the midstream company is constructing a new ethylene pipeline from Mont Belvieu to Bayport, Texas, which is slated to begin operations in 2020.