HOUSTON (ICIS)--Enterprise Products Partners and Navigator Holdings have formed a 50:50 joint venture to build a new 1m tonne/year ethylene export facility along the US Gulf Coast, the US and UK companies said on Wednesday.
Refrigerated storage for 30,000 tonnes of ethylene will be constructed on-site and will provide the capability to load ethylene at rates of 1,000 tonnes per hour.
The facilities are expected to be in service by the first quarter of 2020.
The project is supported by long-term contracts with anchor customers that include US ethylene producer Flint Hills Resources and a major Japanese trading company, they said.
The location and final investment decisions for the terminal are subject to reaching acceptable arrangements with local taxing authorities.
“This new ethylene export terminal will support the growing production of ethylene on the US Gulf Coast by providing access to international markets,” said AJ Teague, CEO of Enterprise's general partner.
“By 2021, the petrochemical industry is expected to expand aggregate ethylene production capacity in Texas and Louisiana by nearly 50% to approximately 90bn pounds/year,” Teague said.
“The resulting rapid growth in the supply of US ethylene, combined with increased demand from international markets, like Asia, creates an ideal scenario in which markets abroad are able to diversify their supply by accessing cost-advantaged feedstocks made possible by the shale revolution in the US”, he said.
He went on to say that the export terminal would also offer domestic petrochemical producers ways to diversify their supply, as they will not have to rely solely on the export market for derivatives like polyethylene (PE), he said.
David Butters, CEO of Navigator Gas, added that the companies have seen “strong, broad interest” from prospective terminal customers during the initial marketing phase of the project.
“It is clear that domestic producers value the opportunity to access global markets and international consumers consider the US as a reliable and affordable source of ethylene to fuel their petrochemical manufacturing in Europe and the Far East,” Butters said.
Meanwhile, Enterprise is also developing a high-capacity ethylene salt dome storage facility at its complex in Mont Belvieu, Texas, it said.
This storage facility will have a capacity of about 600m pounds with an injection/withdrawal rate of 420,000 pounds per hour.
The storage facility is expected to begin service in the first quarter of 2019 and will be designed to enable connections to the eight ethylene pipelines within a half-mile of the Enterprise ethylene storage system.
In addition, Enterprise is building a new ethylene pipeline from Mont Belvieu to Bayport, Texas, which is scheduled to begin service in 2020, it said.
Enterprise published earlier on Wednesday its fourth-quarter financial results, with net income up 19% year on year to $797m and gross operating margin for the petrochemicals division rising 16% year on year during the quarter to $172m.
Pictured: the Houston Ship Channel Source: Houston Port Authority