US Ethane Exports to China Stall Amid Licensing Requirements

US Ethane Exports to China Stall Amid Licensing Requirements

Several U.S. ethane shipments destined for China have been delayed along the U.S. Gulf Coast. This comes after the U.S. government began requiring exporters to obtain licenses for these shipments.

The move has disrupted about half of all U.S. ethane exports, leading to concerns about oversupply and potential profit reductions for major producers like Energy Transfer and Enterprise Products Partners. The U.S. Commerce Department has also rejected some emergency authorization requests for exports to China.

Vessels Affected

The delays involve several vessels, including the STL Qianjiang, which was loaded at Energy Transfer's Nederland terminal and destined for Satellite Chemical in China. Energy Transfer confirmed receiving a letter from the Commerce Department on June 3, mandating licenses for ethane shipments to China.

Other vessels slated for loading in early June are currently anchored near Houston and Port Arthur, Texas. The Pacific Ineos Grenadier, loaded at Enterprise Products Partners' terminal in Morgan's Point, Texas, is also affected and anchored at an Enterprise dock.

Enterprise Products Partners reported receiving the license requirement letter in late May and a notice of intent to deny emergency requests for about 2.2 million barrels of ethane exports to China.