Enterprise, Navigator to Jointly Develop Ethylene Export Facility

As reported in the July 31, 2017 issue of BPN’s Weekly Propane Newsletter (WPN), Enterprise Products Partners LP (Houston) and Navigator Holdings Ltd. (London) have signed an agreement to jointly develop an ethylene marine export terminal on the Houston Ship Channel. Enterprise would manage construction, operations, and commercial activities of the proposed terminal, which would be located at Enterprise’s Morgan’s Point complex. Morgan’s Point has a 45-ft draft and includes Enterprise’s ethane marine export terminal. Navigator has extensive experience with ethylene shipping through its fleet of 14, that provide a virtual pipeline to deliver product to consumers.

Formation of a 50-50 joint venture to build, own, and operate the terminal is subject to the negotiation and execution of definitive agreements and approval by the respective boards of directors of Enterprise and Navigator Holdings. The commercialization of the project is subject to sufficient long-term customer commitments. Navigator is the owner and operator of one of the world’s largest fleets of handysize and midsize liquefied gas carriers, including ethylene vessels. The company provides international and regional seaborne transportation services for ethylene, ethane, LPG, petrochemical gases, and ammonia for energy companies, industrial users, and commodity traders.

The export terminal would be connected to Enterprise’s high-capacity salt dome storage and ethylene pipeline system, which is currently under construction. The company’s ethylene storage will have about 600 million pounds of capacity with an injection/withdrawal rate of 210,000 pounds per hour, expandable to 420,000 pounds per hour. Enterprise’s ethylene pipeline system will be connected to multiple producers and consumers on the U.S. Gulf Coast.

The companies comment that the U.S. petrochemical industry is expanding its ethylene production capacity by 45% between 2016 and 2020, based on currently announced projects. These expansions are driven by plentiful, low-cost supplies of natural gas and ethane as a result of the development of U.S. shale reserves. Nearly 90% of these expansions are at facilities located along the Texas and Louisiana Gulf Coast. Enterprise’s ethylene storage and pipeline system, together with the proposed ethylene export terminal, would provide the petrochemical industry with logistical flexibility and an outlet to international markets.

“We are very pleased to work with Navigator Gas in efforts to commercialize an industry-leading ethylene marine export terminal on the Houston Ship Channel with unsurpassed connectivity to ethylene producers and pipeline and storage infrastructure,” said A. J. (Jim) Teague, CEO of Enterprise Products’ general partner. “Customers would have the ability to manage the transportation and storage of ethylene supplies from the tailgate of producing facilities to domestic and international consuming derivative plants. The proposed ethylene export terminal would provide U.S. petrochemical companies critical market diversification, rather than relying solely on polyethylene export markets.”

“A strategically located ethylene export terminal is the key to unlocking growing petrochemical production capacity in the U.S.,” added David Butters, CEO of Navigator Gas. “We are proud to work with Enterprise, with their proven commercial and technical capabilities, on a project that promises to meet the needs of our customers and provides the seamless transportation of ethylene from the producer to the customer.”