Enterprise Building Ethane Export Terminal to Cut Glut

Enterprise Products Partners LP, operator of the largest U.S. storage hub for natural gas liquids, plans to reduce an oversupply of ethane by exporting the plastics ingredient from the Texas coast.

The refrigerated export facility is expected to begin operating in the third quarter of 2016, Houston-based Enterprise said today in a statement. It will have the capacity to load 240,000 barrels a day, making it the largest such facility in the world, the company said.

Increased production from U.S. shale formations has created a glut of certain natural gas liquids and slashed prices, benefiting chemical makers who turn ethane into ethylene and plastics, while hurting liquids producers. U.S. ethane supply currently exceeds demand by about 300,000 barrels a day, a figure that may reach 700,000 barrels by 2020, even with new ethylene capacity being built, Enterprise said.

“By providing new markets access to ethane, we are assisting U.S. producers to increase their production,” Michael A. Creel, chief executive officer of Enterprise’s general partner, said in the statement.

Enterprise has gotten “strong interest” in the project from abroad and continues to discuss supplying potential customers, Creel said.

Before it's here, it's on the Bloomberg Terminal.