Total U.S. ethane exports surpassed 500 Mb/d in early September, including almost 440 Mb/d of waterborne exports, a new all-time high (see chart below). Although most U.S. ethane production is consumed domestically in steam crackers for ethylene production, exports are accounting for an increasing share of the pie. In 2023, approximately 19% of U.S. ethane gas plant production has been exported, rising from zero in 2013. About 85% of U.S. ethane exports are via marine shipments and 15% by pipeline. We expect U.S. waterborne exports of ethane to continue to grow by another 200-300 Mb/d over the next five years driven by demand from several new major international petrochemical projects. As a result, both Enterprise and Energy Transfer have announced ethane export expansion projects to support the rising global demand for U.S. ethane. Enterprise plans to build a new 120 Mb/d ethane only refrigeration train and a 180 Mb/d ethane/propane (380 Mb/d) flex train at its Beaumont terminal with start-up in the 2H25 and 1H26, respectively. Meanwhile, Energy Transfer said that it would expand NGL export capacity at its Nederland terminal by up to 250 Mb/d in mid-2025. We expect 125 Mb/d, or 50% of the new Nederland capacity, to be earmarked for ethane. But until these expansion projects come online in 2025 and 2026, U.S. ethane export capacity is going to stay tight.
Featured Articles
Kick Out the Jams - The U.S. NGL Production, Fractionation and Export Juggernaut Rolls On
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.
Hot to Go! - Rising NGL Production Spurs Buildout of Flexible LPG/Ethane Export Capacity
A slew of LPG, ethane and ethylene export projects are underway along the Gulf Coast, a direct result of rising U.S. NGL production and generally flat domestic demand. Three of the projects will provide “flex” capacity of some sort — that is, the facilities will be able to shift between LPG and ethane exports or, in some cases, between ethane and ethylene. In today’s RBN blog, we review the history of U.S. LPG and ethane exports, why midstreamers have been struggling to keep up with export capacity, and how the ongoing addition of flex capacity is likely to play out.
Where You Gonna Go? - Navigating the Surplus in U.S. LPG and Ethane Production
Since 2011, U.S. natural gas liquids (NGL) production has more than tripled, while domestic demand has grown only modestly. Consequently, the only way NGL markets could balance was a dramatic increase in exports. Today, over 70% of U.S. propane production is exported, with the majority going to overseas markets, while other NGLs see varying export levels: 40% for butanes, 25% for natural gasoline, and 18% for ethane. Although U.S. NGL production growth is slowing, we still project an increase of 1.5 MMb/d over the next decade and a half, with 85% of that growth coming from the Permian Basin. As U.S. ethane and LPG production continues to rise, nearly all the export growth is expected to head to the Asia/Pacific region, with a significant portion going to one country: China. But is this outlook for U.S. NGLs realistic? And do we have adequate infrastructure — ranging from gathering systems to processing plants and fractionators, and from export terminals to the right kind of ships — to handle all of these volumes? In one of his hit tunes, Toby Keith clearly identified the problem for us: “Where You Gonna Go? And What Ya Gonna Do When You Get There?” These are key NGL market themes that we'll be exploring at our upcoming NACON conference on October 24 at the Royal Sonesta Hotel in Houston and that we’ll introduce in today’s RBN blog.
