HOUSTON (ICIS)--LyondellBasell's CEO said on Tuesday that he is anxious to hear more specifics about the recently announced plan of Enterprise Products to build the world’s largest ethane export terminal, labelling the project’s export scope “the equivalent of three world-scale crackers”.
“That’s a big vote of confidence … for Gulf coast ethane,” Jim Gallogly said on conference call on LyondellBasell’s Q1 2014 earnings.
Enterprise announced last week its plans to build the terminal on the Texas Gulf coast. It will have a loading rate of up to 240,000 bbl/day, the company said, with operations set to start in Q3 2016.
Ethane from the terminal would be shipped to other regions such as Europe or Asia for cracking into other chemicals.
Having crackers in areas such as Europe whose feedslates are not as cost-advantaged as the US, LyondellBasell has studied shipping ethane to its facilities there but decided against it because it could not make the economics work, Gallogly said.
Instead, the company found that cracking other lighter-than-naphtha feedstocks such as propane, butane and condensates in Europe, which could be sourced more closely to the crackers, worked better, the CEO said.
Hampering the economics of shipping ethane to Europe for cracking are the shipping costs as well as the location of current crackers, many of which are inland, the CEO said.
Because of that, Gallogly thinks Europe may not be the sole destination for ethane from the planned Enterprise terminal.
“Some of that has got to go to Asia,” he said.
While Enterprise has said it has executed long-term contracts to support the project, it has not disclosed any information about where the exported ethane will be heading. Gallogly said it will be interesting to see what the full-scale plan is.
“There has got to be more to their story,” Gallogly said.