US Enterprise, Navigator may develop ethylene terminal

HOUSTON (ICIS)–Enterprise Products and Navigator Holdings have signed a letter of intent to develop an ethylene export terminal on the Houston Ship Channel, the companies said on Wednesday.

The proposed terminal would be at Enterprise’s facility at Morgan’s Point, where the midstream company also has an ethane terminal.

If the two companies pursue the project, Enterprise would manage the construction, operations and commercial activities of the terminal, they said. Navigator already has 14 vessels that are capable of carrying ethylene.

Enterprise did not reveal financial details, construction dates or how much ethylene the terminal could handle.

The terminal would be connected to Enterprise’s ethylene salt dome and ethylene pipeline system, which is under construction.

The storage facility will have a capacity of 600m lb (270,000 tonnes) of ethylene, the companies said. The injection and withdrawal rate will be 210,000 lb/hour, expandable to 420,000/hour.

Before the project moves forward, the two companies need to sign agreements that would create an equally owned joint venture that would build, own and operate the terminal, they said. Also, the companies’ boards of directors need to approve the project.

In addition, the project needs to attract enough long-term customer commitments, the companies said.

The announcement comes as companies are already starting up new crackers nearby on the Gulf Coast. Several more are scheduled to begin operations through the rest of the decade. Most of these crackers will be close to the proposed ethylene terminal.

Companies are building crackers in the US to take advantage of the nation’s low-cost feedstock. These new crackers will rely on gas-based ethane, whereas much of the world relies on oil-based naphtha.

Despite the drop in oil prices, ethane has still maintained a cost advantage. An ethylene terminal would allow overseas companies to benefit from that advantage.

Targa Resources currently can export ethylene at its terminal on the Gulf Coast.

Pictured above is Houston Ship Channel in Texas.