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It Takes Two, Part 2 - U.S. Ethane Export Terminals, Throughputs, and Cargo Destinations

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.

As we said in Part 1, U.S. fractionators are now churning out record volumes of ethane, with the Energy Information Administration (EIA) last week reporting the highest production volume ever: 2.2 MMb/d for July 2020. We estimate that around a million additional barrels per day on average this year has been  “rejected” into the natural gas stream at processing plants and sold (at the price of gas) for its Btu value (see Turnin’ Natgas into Gold). Most important to the export focus of this series, about 280 Mb/d, or 14% of total U.S. ethane production, has been sent to other countries so far in 2020. More than one-third of that 280 Mb/d is being piped to Canadian steam-cracker customers on either the Vantage, Mariner West, or Utopia pipelines. The rest is being loaded on VLECs or smaller ethane tankers and sent to crackers in a number of other countries, with the vast majority going to these seven: India, the UK, Norway, China, Mexico, Sweden, and Brazil. These export numbers represent a big change from just a few years ago. Ethane exports from the U.S. only started in 2014, when the Vantage and Mariner West pipelines to Canada came online. And it wasn’t until March 2016 when the first ethane was loaded onto ships for export, first from the Marcus Hook marine terminal near Philadelphia, and then from Morgan’s Point Ethane Export Terminal in the Houston area, which didn’t occur until September 2016 — barely four years ago. Before those terminals opened for business, nary a drop of ethane had ever moved via ship to ethylene crackers.

Today, we discuss the Marcus Hook and Morgan’s Point export facilities, which so far account for all U.S. ethane exports by ship.

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