Joint venture to build Gulf Coast shale gas ethylene export site

By Patrick C. Miller | February 06, 2018

A joint venture project between Enterprise Products Partners LP and Navigator Holdings Ltd. has been formed to build a new export terminal along the U.S. Gulf Coast with the capacity to export about 1 million tons of ethylene per year.

Enterprise, based in Houston, and Navigator, headquartered in London, formed the 50-50 joint venture to construct a facility with on-site refrigerated storage for 30,000 tons of ethylene and the ability to load ethylene at 1,000 tons per hour. The terminal is expected to be in operation by the first quarter of 2020.

The export facility will be supported by long-term contracts with anchor customers that include Flint Hills Resources—a U.S. ethylene producer—and a major Japanese trading company. The location and final investment decisions for the terminal are subject to arrangements with local taxing authorities.

"This new ethylene export terminal will support the growing production of ethylene on the U.S. Gulf Coast by providing access to international markets," said A.J. Teague, CEO of Enterprise's general partner. "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.”

Teague said the rapid growth in U.S. ethylene supply as a result of the shale oil and gas revolution, combined with increased demand from Asia and other international markets, created an ideal scenario for markets abroad to diversify their supply.   

“This export terminal will also offer diversification opportunities for domestic petrochemical producers who will not have to rely solely on the export market for derivatives like polyethylene,” Teague added.

David Butters, CEO of Navigator Gas, said the company received strong, broad-based interest from prospective terminal customers during the initial marketing phase, reinforcing the company’s position of a critical need for an ethylene export terminal with access to global markets and international customers. A reliable, affordable source of ethylene from the U.S. can supply petrochemical manufacturing in Europe and the Far East, he said.

“We are delighted to work with Enterprise on this project that promises to meet the needs of our customers and enables us to provide the seaborne transportation of the ethylene from producer to customer," Butters added.

Enterprise also said it’s developing a high-capacity ethylene salt dome storage facility at its complex in Mont Belvieu, Texas. The facility will have a capacity of approximately 600 million pounds with an injection and withdrawal rates of 420,000 pounds per hour. 

The storage facility is expected to begin service in the first quarter of 2019 and will be designed to enable connections to the eight ethylene pipelines within a half-mile of the Enterprise ethylene storage system.  In addition, Enterprise is building a new ethylene pipeline from Mont Belvieu to Bayport, Texas, which is scheduled to begin service in 2020.