Arathy Somasekhar, Georgina McCartney and Trixie Yap
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By Arathy Somasekhar, Georgina McCartney and Trixie Yap
HOUSTON/SINGAPORE (Reuters) -Over half a dozen U.S.-loaded ethane vessels, originally bound for China, have stalled around the U.S. Gulf Coast after Washington requested U.S. exporters seek licenses to ship the shale gas to the top buyer, according to trade sources and ship tracking data on Friday.
Around half of all U.S. ethane exports head to China, and the halt in flows has pushed ethane prices lower on worries of domestic oversupply and is likely to cut into profits of top ethane producers.
Energy Transfer and Enterprise Products Partners, two of the largest ethane producers and exporters, have warned the disruptions could impact their exports. The U.S. Commerce Department has also denied some vessels emergency authorization requests to export to China.
Liberia-flagged STL Qianjiang, which loaded at Energy Transfer's Nederland terminal for China's Satellite Chemical, was anchored off the coast on Friday in the Gulf, according to LSEG and Kpler ship tracking data.
Energy Transfer, which produces ethane by extracting it from natural gas and then exports it from terminals along the Gulf Coast, said it received a letter from the U.S. Commerce Department on June 3 requiring the company to apply for a license to ship ethane to China.
The company and Satellite Chemical did not reply to requests for comments on the vessel.
Three other vessels, which were set to load in early June, were anchored in the U.S. Gulf near Houston and Port Arthur, Texas, while three others hovered further south in the water after having slowed down.
Meanwhile, Liberia-flagged very large ethane carrier (VLEC) Pacific Ineos Grenadier, which loaded at Enterprise Products Partners' terminal in Morgan's Point, Texas, and had been originally destined for China, was anchored at an Enterprise dock along the Houston Ship Channel on Friday after heading away from the Gulf Coast on Thursday.
The ship had not discharged on Friday afternoon and it was not immediately clear if it would.
The vessel, a part of British petrochemical firm Ineos' fleet, has been used exclusively for transit between the United States and China since August 2023, according to Kpler data.
Enterprise Products Partners received the license requirement letter in late May, and on Wednesday said it received a notice from the U.S. government of its intent to deny emergency requests for three proposed export cargoes of ethane totaling around 2.2 million barrels to China.
Enterprise has 20 days to respond to the denial, it said on Wednesday. Unless otherwise notified by the government by the 45th day after receiving the notification, the denials will become final.
