Europe Receives First U.S. Gulf Coast Ethane Shipment

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Researched by Industrial Info Resources (Sugar Land, Texas)--The first ethane terminal in the U.S. Gulf Coast region has sent its first shipment to Europe. Enterprise Products Partners LP's (NYSE:EPD) (Houston, Texas) $800 million export facility in Morgan's Point, Texas, on the Houston Ship Channel, is the largest of its kind in the world, with a capacity of 200,000 barrels per day (BBL/d). Industrial Info is tracking $4.6 billion in active projects involving Enterprise Products.

The U.S. has seen a boom in ethane production recently, which stands to significantly benefit its export market. Ethane is a key feedstock in a variety of industrial products, including plastics. The U.S. Energy Information Administration (EIA) expects the production of natural gas liquids (NGLs) such as ethane to continue growing, from 3.6 million BBL/d in May 2016 to 4 million BBL/d in December 2017. The EIA cites growth in export capability and domestic petrochemical demand as the reasons why more ethane is expected to be recovered and sold. For more information, see September 6, 2016, article - Ethane Exports Mean Big Business in U.S.

The 265,000-barrel shipment on the INEOS INTREPID left the terminal Thursday, September 1, bound for INEOS Group AG's (Lyndhurst, England) Rafnes VCM facility in Stathelle, Norway. The facility is operated by INOVYN Norge, an INEOS subsidiary that is Europe's leading polyvinyl chloride (PVC) manufacturer.

In an earnings conference call at the end of July, covering the second quarter, Daniel Boss, Enterprise Products' senior vice president of accounting, said that the company expects the Morgan's Point terminal to be handling roughly 1.9 million barrels of export per month, by the end of the year.

Among the other customers for the Morgan's Point terminal is Brazilian chemical producer Braskem S.A. (NYSE:BAK) (Sao Paulo), which entered into a 10-year contract to buy ethane from Enterprise earlier this year. For more information, see March 23, 2016, article - Enterprise Products Expects to Complete Ethane Export Terminal this Summer.

Enterprise Products has another major project under construction in Texas: the $900 million addition of a propane dehydrogenation unit at its NGL fractionator complex in Mont Belvieu, which would produce 1.65 billion pounds per year of propylene from 35,000 BBL/d of propane. The massive project, previously slated to be finished in the second half of 2016, recently had its completion date pushed back to second-quarter 2017. For more information, see Industrial Info's project report.

"Our strategy around propylene, frankly, is evolving," said James Teague, the chief executive officer of Enterprise's general partner, in the second-quarter conference call. "[Other] parts of the world have an appetite for it, which is why we put the capability to export propylene at our shipped facility, and we can expand that. We are, in fact, in negotiations with people for supply out of the Gulf Coast."

The Mont Belvieu complex provides most of the ethane to the Morgan's Point terminal, via an 18-mile pipeline that was completed earlier this year. The ethane is sourced from the Marcellus and Utica shales. Enterprise also is planning to add two more trains, nos. 9 and 10, to the Mont Belvieu complex, each of which would have a capacity of 100,000 BBL/d, bringing its total capacity to 800,000 BBL/d. For more information, see Industrial Info's project reports on Train 9 and Train 10.

Enterprise also is planning a $50 million addition of a deisobutanizer unit at Mont Belvieu. The company still is seeking permits for the unit, which would process mixed butanes to produce isobutene. For more information, see Industrial Info's project report.

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