Special Edition: Ethane Focus

As of 2016, we see a dramatic growth in the ethane trade, competing with LPG as a feedstock, we’ve decided to dedicate this week’s interesting moves to seaborne ethane.


Panorama of Ethane Trade

World Map of Ethane Seaborne Trade
Before Enterprise’s Morgans Point terminal was commissioned on 1-Sept-16, only two terminals were able to export ethane:
  • Sunoco’s Marcus Hook terminal that started exporting Marcellus sourced ethane to Europe earlier this year, on 9-March.
  • Older Statoil’s Kaarstoe terminal that started operations in 2000.
On the demand side, crackers located in NWE are the only facilities currently receiving these shipments:
Sabic’s Wilton cracker in Scotland, is preparing to receive its first US ethane shipment, which will come from the US aboard Clipper Hermes, ETA 14-Nov. However, the first ethane flowing in will be from Norway, as Sabic fixed Thetagas earlier in October lifting an 8,970 cbm  Kaarstoe-sourced  cargo to gas up the lines. The latter is currently drifting loaded ahead of Tees.


Trade Flows
All seaborne ethane trade is currently handled through long-term contracts. But we’re seeing some spot fixtures ethane related.
*numbers for Jan, Feb & Mar for Kaarstoe have been estimated
Exports peaked in August out of Marcus Hook in preparation for September’s planned maintenance in Kaarstoe. US-sourced ethane contributed to more than double the world’s exports in just 6 months.
Numbers for Jan, Feb, Mar for Rafnes & Stenungsund have been estimated
As Sabic‘s cracker close to Teeside is getting ready to receive its first shipment, NWE crackers have already more than doubled their imports of ethane since the beginning of the year.
A bright future
New trade routes are to be opened:
  • The world’s largest VLEC, Ethane Crystal (87,000 cbm), ordered by Indian petrochemical manufacturer Reliance, started to transmit her AIS signal. Morgans Point might expect her by mid-December, as she’s scheduled to go through Panama Canal on 7-Dec according to the canal schedule. India will receive its first ethane seaborne shipment ever, in the Jamnagar petrochemical complex by early 2017. Reliance and Enterprise signed a 1.5 million ton/year long-term contract to supply the Indian cracker with US shale ethane.
  • From Morgans Point, Enterprise closed a 10-year deal with Braskem to feed its Rio de Janeiro cracker.
  • Versalis‘ cracker in Dunkirk is capable of importing ethane, but with the recent plunge in oil prices, imports were set on hold.
Existing routes are expected to grow dramatically:
  • In order to satisfy the demand of its crackers, INEOS ordered 8 ships (27,500-32,000 cbm) out of which 4 are in service, Js Ineos Innovation is undergoing sea trials, and 3 more are more to come by 2017.
  • Newbuild Navigator Aurora is currently lifting LPG cargoes but has been fixed by Borealis for a 10-year TC to supply US ethane to Stenungsund.
Vessels that lifted ethane cargoes since Jan -2016