HOUSTON (ICIS)--Exporting ethane from the US does not make sense economically in Phillips 66’s view, the CEO of the US producer said on Wednesday.
During a conference call about the company’s Q1 earnings, Greg Garland was asked for his views on the recently announced project by Enterprise Products to build the world’s largest ethane export terminal on the Texas Gulf coast.
Garland said that the interest in areas such as Europe to access the North American shale gas revolution is understandable but is not necessarily economically practical.
“I kind of go back to the past decade in the Middle East where ethane was free and no one could make it work with free ethane, and now we are talking about playing between Henry Hub gas and European prices,” Garland said.
Even if some European facilities could figure out a way to make it work, the amount transported would not terribly affect feedstock prices for the wave of ethane crackers being planned for the US, one of which Phillips 66 and Chevron are building in Cedar Bayou, Texas, in their Chevron Phillips Chemical (CP Chem) joint venture, the CEO said.
“Let’s just say you can make it work and you can put ethane to the facilities in Europe, they could absorb it. In our view, it’s between maybe 200,000 to 300,000 barrels a day, which is about what we think is being rejected today,” Garland said.