Shop Around - Navigator Seeking More Ethylene Export Vessels

Way back in 2018-19, U.S. NGL production was rising fast, new ethane-only steam crackers were coming online along the Gulf Coast, and new fractionation capacity wasn’t being added quickly enough — the capacity shortfall sent the NGL market into near-panic. Fast forward to now: NGL production is still rising but domestic demand is flat, resulting in an NGL-exports surge and a race to develop new export capacity. And fractionation capacity in Mont Belvieu and elsewhere? The market learned its lesson five years ago and, to avert another capacity crunch, midstream companies have been adding new fractionators at an almost frenetic pace. In today’s RBN blog, we discuss the ongoing fractionation-capacity buildout — and the need to quickly expand NGL export terminals. 

Taken together, the ethane-related infrastructure projects developed in the U.S. over the past several years serve as a reliable feedstock-delivery network for a number of steam crackers in Europe, Asia, and Latin America. NGL pipelines transport y-grade to fractionation hubs, fractionators split the mixed NGLs into ethane and other “purity” products, ethane pipelines move the feedstock to export terminals fitted with the special storage and loading facilities that ethane requires, and a class of cryogenic ships — Very Large Ethane Carriers, or VLECs — sails ethane to mostly long-term customers in distant lands. The end results of all this development are virtual ethane pipelines between, say, the Marcellus/Utica and Scotland, or the Permian and India. Today, we continue our series on ethane exports with a look at the two existing export terminals, the ethane volumes they have been handling, and where all that ethane has been headed.

The fractionation and NGL storage complex in Mont Belvieu, TX, would surely qualify as one of the Seven Wonders of the Energy World, if there were such a list. With more than 250 million barrels of NGL storage carved — by water! — out of an enormous subterranean salt dome formation, and nearly two dozen fractionation plants with a combined capacity of more than 2 MMb/d, Mont Belvieu not only serves as the largest receipt point for mixed NGL streams on the planet, it is also the key hub of distribution for the ethane, propane, normal butane and other NGL purity products that are either consumed by Gulf Coast steam crackers and refineries or exported to foreign end-users. But unlike wonders of the ancient world like the Great Pyramids at Giza, Mont Belvieu is still very much a work in progress, with new storage caverns and new fractionators now under development to try to keep up with the breakneck pace of U.S. NGL production growth. Today, we begin a company-by-company review of fractionation capacity and other key infrastructure there.