First VLEC cargo caps landmark year for ethane trade
Seaborne exports of ethane from the US began early in 2016 and advanced technologically in the year's final month.
By connecting world-class Appalachian basin gas resources with petrochemical markets in Europe and Asia, the developments add an important dimension to energy trade and promise to improve processing economics in the US.
The inaugural tanker cargo of ethane left the Sunoco Logistics terminal at Marcus Hook, Pa., in March.
The same tanker, JS Ineos Intrepid, carried the first cargo away from Enterprise Product Partners LP's terminal at Morgan's Point, Tex., in September.
The technological step occurred when the world's first very large ethane carrier (VLEC), Ethane Crystal, left Morgan's Point Dec. 22.
Before then, ethane liquefied by refrigeration moved to Ineos plants in Norway and Scotland aboard purpose-built vessels with cargo-carrying capacity of 27,500 cu m.
The new VLEC capacities are 87,000 cu m.
The Ethane Crystal is the first delivered of six VLECs ordered in 2014 by Reliance Industries Ltd., Mumbai. The ethane will feed RIL's expanding petrochemical operations at Jamnagar, Gujarat.
RIL recently took delivery of the second VLEC, Ethane Emerald, from Samsung Heavy Industries. Mitsui OSK Lines operates the ships.
Dan Lippe, president of Petral Consulting Co. of Houston, expects ethane exports from Morgan's Point to reach 80,000-120,000 b/d in the first half of 2017 (OGJ, Nov. 7, 2016, p. 62).
Export growth combines with incremental demand from new US petrochemical plants to relieve a chronic ethane surplus.
Noting that the country's gas processing industry has been rejecting ethane since 2013, Lippe predicts full ethane recovery will resume by late 2018.
"A significant improvement in gas processing profitability will accompany this return to full ethane recovery," he says.
Growth in US exports of ethane by water depends on prices of the gas in relation to naphtha, the dominant ethylene feedstock in destination markets.
And it's just one part of the global expansion of hydrocarbon liquids from gas plants, a factor of zooming importance in the oil market.
(From the subscription area of www.ogj.com, posted Dec. 29, 2016; author's e-mail: [email protected])
Bob Tippee | Editor
Bob Tippee has been chief editor of Oil & Gas Journal since January 1999 and a member of the Journal staff since October 1977. Before joining the magazine, he worked as a reporter at the Tulsa World and served for four years as an officer in the US Air Force. A native of St. Louis, he holds a degree in journalism from the University of Tulsa.
