US terminal operator warns its ethane, butane exports to China could fall
Enterprise Products Partners on Thursday said its ethane and butane exports could be hurt by a US Department of Commerce requirement that it apply for a license to export to China.
The United States has ordered a broad swathe of companies to stop shipping goods, including ethane and butane, to China without a license and revoked licenses already granted to certain suppliers, Reuters reported on Wednesday.
The Bureau of Industry and Security, an agency of the Department of Commerce, informed the company that exports of ethane and butane pose an unacceptable risk of military end-use in China.
Ethane and butane, liquids separated from natural gas, are used to make plastics and chemicals and also for heating and cooking.
Chinese petrochemical firms use ethane as a feedstock because it is a cheaper alternative than naphtha, while US oil and gas producers need China to buy their natural gas liquids as domestic supply exceeds demand.
Enterprise, one of the top US handlers of ethane and butane through its port terminals, said in a regulatory filing it was evaluating its procedures and internal controls and could not determine if it will be able to obtain a license.
In 2024, Enterprise's terminal on the Houston Ship Channel loaded about 213,000 barrels per day (bpd) of ethane, of which about 85,000 bpd, or 40 per cent, went to Chinese markets, the company said.
Enterprise cautioned that it cannot determine how alternative markets and uses will develop nor the potential impact on ethane and butane prices.
It also said it was uncertain how this restriction may indirectly impact US crude oil and natural gas production and prices as natural gas liquids are byproducts of oil and gas drilling.
Enterprise also warned that it was currently unable to ascertain whether these restrictions will have a material adverse effect on the company's financial position, operations, and cash flows.
US exports of ethane to China rose to a record 227,000 bpd in 2024, according to US Energy Information Administration data, while those of butane rose to a record 26,000 bpd.
Those exports have been seen as one way to reduce China's trade surplus with the US.
(Reporting by Pooja Menon in Bengaluru, Arathy Somasekhar and Georgina McCartney in Houston; Editing by Mohammed Safi Shamsi, Shounak Dasgupta and Sonali Paul)
