Morgan's Point

This week the first Gulf Coast ethane export cargo will depart Morgan’s Point, Enterprise Products Partners’ new export terminal on the Houston Ship Channel.  This is a history-making event for at least three reasons.  First, it inaugurates ethane exports from the Gulf Coast, only five months after the first-ever U.S. overseas ethane exports out of Sunoco Logistics’ Marcus Hook, PA, terminal.  Second, it launches a battle for Mont Belvieu ethane, to be fought between ethane exporters and new ethane-only steam crackers (ethylene plants) that will be coming online along the Texas/Louisiana coast over the next couple of years.  And third, Morgan’s Point is not just another export terminal.  It is a location steeped in Texas history, known in the 1830s as New Washington, with an important role in the Battle of San Jacinto – decisive battle of the Texas Revolution -- and legend has it, inextricably tied to the Texas anthem “The Yellow Rose of Texas.”   In today’s blog we examine the upcoming fight between ethane exporters and U.S. crackers.

Houston is getting swamped with crude that isn’t being consumed by area refineries. Light sweet crude prices are being discounted by up to $6/Bbl versus St James, LA. There is no pipeline capacity to move crude from Houston to Louisiana so it can only go by barge. The reconfiguration of terminalling and storage capacity on the Texas Gulf Coast to handle rising volumes of incoming crude more smoothly is underway but far from finished. Enterprise Product Partners (EPP) announced their latest expansion plans for their ECHO terminal earlier this month. Today we review progress on the Enterprise Texas crude network.