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Largest single shipment of ethane heads to China after loading at US export facility

Highlights

VLEC Seri Everest on maiden voyage

LPG price rise spurs Gulf Coast ethane demand

Houston — The world's largest ethane carrier was headed toward the Panama Canal on Jan. 19 after loading at Energy Transfer's terminal in Nederland, Texas, P latts trade flow software cFlow showed.

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The Seri Everest, a Very Large Ethane Carrier, departed on its maiden voyage from the Orbit Gulf Coast NGL Exports facility at the terminal on Jan. 17, en route to Satellite Petrochemical's Lianyungang ethane cracker in Jiangsu Province, China, according to Energy Transfer. The export facility is operated by Energy Transfer under a joint venture with Satellite.

The achievement follows the loading of the first VLGC powered by liquefied petroleum gas at Enterprise Products Partners' hydrocarbon terminal on the Houston Ship Channel in December.

US Gulf Coast ethane climbed to the highest level in more than 20 weeks Jan. 15, at 25 cents/gal, amid increased demand for ethane as a viable alternative to normal butane and propane for the petrochemical sector. Prior to that, January barrels of LPG had been on an upward trajectory, spurring the demand for ethane.

S&P Global Platts assessed January non-LST ethane, reflecting prices at the Enterprise NGL storage and fractionation facility in Mont Belvieu, Texas, at 23.50 cents/gal on Jan. 19.

Stripping ethane and propane from the natural gas produced at the wellhead creates two more revenue streams in addition to the dry gas that remains. US exports of NGLs and their byproducts to Asia have flourished in recent years. Producers in key US shale basins where increasing amounts of associated gas are being lifted with oil, including the prolific Permian Basin in West Texas, rely on those outlets for their supplies.

For 2021, global NGL supply is expected to retract by 1% compared with 2020 as production curtailments hit the US, according to Platts Analytics. Ultimately, global NGL supply is not expected to return to 2019 annual levels until 2023.

At the Orbit facility, the Seri Everest was loaded with more than 911,000 barrels of ethane, the largest single shipment of ethane to date, Energy Transfer said. It is expected to arrive in China in mid-February, the company said. Energy Transfer's Marcus Hook facility in Pennsylvania is also capable of handling VLECs.

As for the Very Large Gas Carrier BW Gemini that departed Dec. 13 from Enterprise's terminal, it was loaded with 590,000 barrels of LPG, including cargo and fuel. On Jan. 19, the vessel was in the North Pacific, with a captain's destination set for Japan's port of Chiba, according to cFlow.