US Enterprise's export terminal points to long ethane − Dow

23 April 2014 21:27  [Source: ICIS news]

HOUSTON (ICIS)--Enterprise Products's proposed ethane terminal in the US indicates that future supplies of the material will remain long, the CEO of Dow Chemical said on Wednesday.

Enterprise plans to build the world's largest ethane export terminal on the Texas Gulf coast. The terminal will have a loading rate of up to 240,000 bbl/day, and it should start operations in the third quarter of 2016.

Unlike liquefied petroleum gas (LPG), ethane has very limited use.

For the most part, ethane is used as a feedstock for crackers. Moreover, before a cracker can import ethane overseas, it must have the infrastructure in place to accept the shipments and the furnaces in place that can use the ethane as a feedstock.

As such, to be viable, ethane must sell at a significant discount to naphtha.

Over time, Dow expects the price gap between ethane and naphtha to narrow, said CEO Andrew Liveris. He made his comments during an earnings conference call.

"And as it closes, the economics change and the prices that people can get to export ethane will drop," Liveris said. "It's actually, in our view, a strong message of ethane length, which we believe is beyond 2020 at this point."

By: Al Greenwood
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