Enterprise and Navigator Gas to develop ethylene marine export terminal
HOUSTON and LONDON — Enterprise Products Partners L.P. and Navigator Holdings Ltd. announced the execution of a letter of intent to jointly develop an ethylene marine export terminal on the Houston Ship Channel. Enterprise would manage the construction, operations and commercial activities of the proposed terminal, which would be located at Enterprise’s Morgan’s Point complex. Enterprise’s Morgan’s Point facility has a 45-foot draft and includes Enterprise’s ethane marine export terminal, the world’s largest. Navigator Gas has extensive experience with ethylene shipping through its fleet of 14 ethylene-capable vessels that provide a virtual pipeline to deliver ethylene to consuming customers.
The ethylene export terminal would be connected to Enterprise’s high-capacity ethylene salt dome storage and ethylene pipeline system, which is currently under construction. Enterprise’s ethylene storage facility will have approximately 600 MM pounds of capacity with an injection/withdrawal rate of 210,000 pounds per hour expandable to 420,000 pounds per hour. Enterprise’s ethylene pipeline system will be connected to multiple producers and consumers of ethylene on the US Gulf Coast.
The US petrochemical industry is expanding its ethylene production capacity by 45% between 2016 and 2020, based on currently announced projects. These expansions are driven by plentiful, low-cost supplies of natural gas and ethane as a result of the development of US shale reserves. Almost 90% of these expansions are at facilities located along the Texas and Louisiana Gulf Coast. Enterprise’s ethylene storage and pipeline system, together with the proposed ethylene export terminal, would provide the petrochemical industry with logistical flexibility and an outlet to international markets.
Formation of the 50/50 JV to build, own and operate the ethylene marine export terminal is subject to the negotiation and execution of definitive agreements and approval by the respective boards of directors of Enterprise and Navigator Holdings. The commercialization of the project is subject to sufficient long-term customer commitments.
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