INSIGHT: US to export more chem feedstocks amid drought of US cracker projects

HOUSTON (ICIS)–US production of ethane, propane and other natural gas liquids (NGLs) will continue to grow while domestic demand for these chemical feedstocks will likely remain flat, a trend that is contributing to a surge in new terminal projects that will export these products to growing markets overseas.

• Targa is expanding its terminal at Galena Park, Texas, so it could export a total of 19 million bbl/month of liquefied petroleum gas (LPG).
• MPLX and ONEOK plan to develop a terminal in Texas City, Texas, that can export 400,000 bbl/day of LPG.
• Chemical companies have announced no final investment decisions on any crackers or propane dehydrogenation (PDH) units in the US that would consume the nation’s growing supplies of NGLs. Crackers can use NGLs to produce ethylene. PDH units use propane to make propylene.

US ETHANE, PROPANE PRODUCTION TO CONTINUE RISING
Midstream companies continue to announce new projects, which would increase US production of ethane and LPG.

These projects are on top of the ones that are already under construction and that will start up in the upcoming months. Targa alone is starting up four natural gas processing plants in west Texas in 2026, and it has picked out multiple sites for future processing plants in the region’s Delaware and Midland basins.

The following table shows the ICIS forecast for US NGL supplies in the next couple of years. Figures are in millions of bbl/day, and they include imports as well as production from gas processing plants and refineries.

million bbl/day	2024	2025	2026
Ethane	2.821	2.874	3.099
Propane	2.526	2.619	2.684
Butanes	1.235	1.292	1.347

Source: ICIS

US supplies of NGLs are rising because of increased production of crude oil and natural gas. The following table shows forecasts for US production of oil and dry natural gas from the short term energy outlook of the Energy Information Administration (EIA). Oil figures are in millions of barrels/day. Gas production is in billion of cubic feet/day.

	2023	2024	2025	2026
Crude oil	12.93	13.21	13.59	13.73
Dry natgas	103.57	103.08	104.60	107.29

Source: EIA

As shale reservoirs mature and reservoir pressures decline, the ratio of gas to oil increases. This raises gas production and further increases NGL supplies.

NO NEW CRACKER OR PDH CAPACITY
The US has had a drought of new cracker announcements, with 2025 being the first year since 2010 that the country will add no new ethylene capacity.

Chevron Phillips Chemical and QatarEnergy will break the drought in 2026 when their Golden Polymer joint venture project starts up.

But that’s it. ExxonMobil Chemical and Shintech have early plans for crackers, but neither have announced final investment decisions (FID).

Westlake has expressed openness into possibly expanding the joint venture cracker that it owns with Lotte Chemical in Louisiana. But any decision would have to follow a review of costs.

FG LA LLC, a subsidiary of Formosa Plastics Group, has said little about a two-phased proposed project called Sunshine that would produce ethylene and downstream derivatives.

Thailand’s PTT Global Chemical (PTTGC) has been considering a cracker in Ohio that would supply ethylene for new PE capacity. The project hit a snag in July 2020, when the company’s joint venture partner left.

Meanwhile, no company has announced plans to consider any propane dehydrogenation (PDH) units in the US, which convert propane into propylene.

Rising costs for labor and material have made capacity expansions less attractive. In addition, the world has an oversupply of many plastics and chemicals, which is providing producers with another reason to forego capacity expansions.

Because of the dearth in new chemical projects, demand for NGLs will remain steady in the next couple of years, according to the latest short term energy outlook from the EIA, as shown in the following table. Figures are in millions of barrels per day.

million bbl/day	2023	2024	2025	2026
Ethane	2.16	2.30	2.27	2.35
Propane	0.78	0.74	0.78	0.76
Butanes	0.30	0.30	0.27	0.27

US NGLS BOUND FOR OVERSEA MARKETS
Outside of the US, companies continue to add capacity despite the supply glut.

By 2029, capacity in northeastern Asia will be nearly 43% larger than in 2024 according to the ICIS Supply & Demand Database. For Asia and Pacific, capacity will grow by more than 10% over the same period.

In India, GAIL (India) and Nayara Energy have each proposed building 1.5 million tonne/year ethane crackers.

In Vietnam, Siam Cement Group (SCG) plans to build Vietnam’s first integrated petrochemical complex that will use ethane from the US as a feedstock.

For propylene, capacity in northeastern Asia will be nearly 28% larger in 2029 versus 2024. For Asia and Pacific, capacity will be grow by nearly 25% over the same period.

In addition, demand for LPG continues to grow because consumers are using it to replace wood and other sources biomass-based fuel.

Rising supplies of chemical feedstock in the US and rising demand in the rest of the world are creating an opportunity for midstream companies to connect the producers with the customers by expanding export capacity.

DETAILS ON TERMINAL PROJECTS

• MPLX and ONEOK created the Texas City Logistics joint venture to develop their LPG terminal. Operations should start in early 2028. ONEOK and MPLX are each reserving 200,000 bbl/day for their customers.
• Targa should complete its 650,000 bbl/month expansion project at its LPG terminal in Galena Park, Texas, in Q4 2025.
• Another expansion project by Targa should start operations in the third quarter of 2027. The company did not disclose the size of this subsequent. However, it will raise the total LPG export capacity at Galena Park to 19 million bbl/month
• Enterprise Products is proceeding with its previously announced ethane and propane Neches River Terminal. Phase 1 should start in Q3 2025 and Phase 2 should start in the first half of 2026.
• Enterprise is expanding LPG loading capacity under a previously announced project at its Enterprise Hydrocarbons Terminal (EHT). That project should be completed by the end of 2026.
• Enterprise is enhancing its ethane terminal at Morgan’s Point, which should be completed in the fourth quarter of 2025.
• Energy Transfer is adding up to 250,000 bbl/day of NGL export capacity at its terminal in Nederland, Texas. Initial phases should start up in mid-2025. In Q4 2025, the terminal should start exporting ethylene.
• Energy Transfer has started work on building a 900,000 bbl ethane storage tank at its export terminal in Marcus Hook, Pennsylvania. It is also adding about 20,000 bbl/day of incremental ethane chilling capacity.

MIDSTREAM PROJECTS
The following table lists some of the major midstream projects.

Company	Project	Type	Capacity	Units	Location	Startup
Brazos Midstream	Sundance I	Gas Plant	200	million cubic feet/day	Martin County	24-Oct
Brazos Midstream	Unnamed	Gas plant	300	million cubic feet/day	Martin County	H2 2025
Delek	Unnamed	Gas Plant	110	million cubic feet/day	Delaware	H1 2025
Durango Midstream	Kings Landing, Phase II	Gas Plant	200	million cubic feet/day	Eddy County, NM	na
Durango Midstream	Kings Landing, Phase I	Gas Plant	200	million cubic feet/day	Eddy County, NM	Q4 24
Energy Transfer	Frac IX	Fractionator	165,000	bbl/day	Mont Belvieu	Q4 26
Energy Transfer	Red Lake III	Gas Plant	200	million cubic feet/day	Permian Basin	completed
Energy Transfer	Expansion of Orla East	Gas Plant	50	million cubic feet/day	Orla, Texas	completed
Energy Transfer	Expansion of Grey Wolf	Gas Plant	50	million cubic feet/day	west Texas	completed
Energy Transfer	Mustang Draw	Gas Plant	275	million cubic feet/day	Midland Basin	H1 26
Energy Transfer	Badger	Gas Plant	200	million cubic feet/day	Delaware	mid 25
Energy Transfer	Expansion of Arrowhead II	Gas Plant	50	million cubic feet/day	west Texas	Q1 25
Energy Transfer	Expansion of Arrowhead III	Gas Plant	50	million cubic feet/day	west Texas	Q1 25
Energy Transfer	Red Lake IV	Gas Plant	200	million cubic feet/day	Permian Basin	Q3 25
Energy Transfer	Marcus Hook Optimization	Terminal	900,000 bbl ethane storage/20,000 bbl/day ethane chilling capacity		Marcus Hook, Pennsylvania	Construction Underway
Energy Transfer	Expansion of Nederland NGL terminal	Terminal	Up to 250,000	bbl/day	Nederland, Texas	mid 25
Enterprise	Fractionator 14	Fractionator	195,000	bbl/day	Mont Belvieu	Q3 25
Enterprise	Mentone West 2	Gas Plant	300	million cubic feet/day	Delaware	H1 26
Enterprise	Mentone West	Gas Plant	300	million cubic feet/day	Delaware	Q3 25
Enterprise	Orion	Gas Plant	300	million cubic feet/day	Midland	Q3 25
Enterprise	Neches River Terminal (NRT), phase 2	Terminal	add 60,000 ethane to raise total to 180,000, Propane 360,000			H1 26
Enterprise	Neches River Terminal (NRT), phase 1	Terminal	120,000 ethane, 900,000 refrigerated tank			Q3 25
Enterprise, Navigator	Ethylene Export Expansion	Terminal	550,000/ 1,500,000 tonnes/year			Q4 24 & Q4 25
Enterprise	Enterprise Hydrocarbons Terminal (EHT) LPG expansion	Terminal	300,000	bl/day	Houston Ship Channel	end 2026
Gulf Coast Fractionators JV *	GCF Fractionator	Fractionator	135,000	bbl/day	Mont Belvieu	24-Nov
Moss Lake	Hackberry NGL Project	Fractionator	300,000	bbl/day	Calcesieu Ship Channel	NA
Moss Lake	Hackberry NGL Project	Terminal	315,000	bbl/day	Calcesieu Ship Channel	NA
MPLX	Harmon Creek III	De-ethanizer	40,000	bbl/day	Marcellus	H2 26
MPLX	na	Fractionator	150,000	bbl/day	Galveston Bay Refinery	2028
MPLX	na	Fractionator	150,000	bbl/day	Galveston Bay Refinery	2029
MPLX	Harmon Creek III	Gas plant	300	million cubic feet/day	Marcellus	H2 26
MPLX	Secretariat	Gas Plant	200	million cubic feet/day	Delaware	Q4 25
ONEOK	Medford Fractionator rebuild	Fractionator	210,000	bbl/day	Medord, Oklahoma	Q4 26, Q1 27
Phillips 66	EPIC NGL	Fractionator	110,000	bbl/day	Robbstown, Texas	proposed
Targa	Train 11 Fractionator	Fractionator	150,000	bbl/day	Mont Belvieu	Q3 26
Targa	Train 12 Fractionator	Fractionator	150,000	bbl/day	Mont Belvieu	Q1 27
Targa	Bull Moose	Gas Plant	275	million cubic feet/day	Delaware	completed
Targa	Falcon II	Gas Plant	275	million cubic feet/day	Delaware	Q2 26
Targa	Greenwood	Gas Plant	275	million cubic feet/day	Midland	Q4 23
Targa	Pembrook II	Gas Plant	275	million cubic feet/day	Midland	Q4 25
Targa	Bull Moose II	Gas Plant	275	million cubic feet/day	Delaware	Q1 26
Targa	East Pembroke	Gas Plant	275	million cubic feet/day	Midland	Q2 26
Targa	East Driver	Gas Plant	275	million cubic feet/day	Delaware	Q3 26
Targa	Galena Park LPG terminal expansion	Terminal	650,000	bbl/month	Galena Park, Texas	Q4 25
Targa	Galena Park LPG terminal expansion	Terminal	total capacity raised to 19,000,000	bbl/month	Galena Park, Texas	Q3 27
Targa	LPG Export Expansion	Terminal	1,000,000	bbl/month	Galena Park, Texas	started up
Texas City Logistics	LPG terminal	Terminal	400000 LPG	bbl/day	Texas City	early 2028

* GCF is restarting after being idled in January 2021. The JV is made up of Targa, Phillips 66 and Devon Energy

Insight article by Al Greenwood

(Thumbnail shows an ethane carrier)