INSIGHT: European cracker shutdowns could open market to US ethylene exports

HOUSTON (ICIS)–European ethylene producers could be planning more cracker shutdowns, with the lost capacity being replaced by imports from the US.

• US ethylene export capacity is being expanded.
• Midstream companies are adding more US capacity to process the feedstock used to make ethylene.
• Outside of chemical feedstock, midstream companies see potential growth from energy demand from data centers.

EUROPE MAY SHUT DOWN MORE CRACKERS
US-based midstream company and ethylene exporter Enterprise Products hinted that more shutdowns were possible beyond the ones announced this year by ExxonMobil, SABIC and Versalis.

“We’ve heard from a lot of the chemical companies that they are doing strategic reviews of their European assets,” said Christopher D’Anna, senior vice president, petrochemicals. He made his comments during an earnings conference call.

“So, we expect to see some closures, and we expect that to lead to additional ethylene exports going that way,” D’Anna said.

Among the region’s crackers that rely predominantly on naphtha, most produce less than 700,000 tonnes/year of ethylene, which prevents them from benefiting from economies of scale, according to ICIS data.

Europe’s elevated energy costs pile on the problems faced by these smaller naphtha crackers.

US INCREASING ETHYLENE EXPORT CAPACITY
US ethylene exports surged in 2020 after Enterprise Products and Navigator Gas started shipping material out of their joint venture terminal at Morgan’s Point, Texas. That terminal can export 1 million tonnes/year of ethylene.

By the end of 2024, the two will complete an expansion project that can handle ethane or ethylene. If dedicated to ethylene, the expansion can export up to 500,000 tonnes/year of ethylene, bringing the total to 1.5 million tonnes/year.

By the end of 2025, Enterprise and Navigator will complete another expansion at Morgan’s Point, which will add even more flexible capacity. If dedicated to ethylene, this expansion could export up to 1.5 million tonnes/year of ethylene. In all, the Morgan’s Point terminal could export up to 3 million tonnes/year of ethylene if it chooses to dedicate all of its flexible capacity to ethylene.

As new Enterprise ethane capacity comes online during 2025 and 2026, additional flex train capacity can be utilized for ethylene.

In addition, Navigator has ordered two carriers that can each carry 48,500 cubic meters of liquid ethylene, with delivery scheduled for March 2027 and July 2027. The carriers have the flexibility to carry ethane, ammonia or liquefied petroleum gas (LPG).

EXPORTS AND US ETHYLENE BALANCE
If Enterprise and Navigator decide to maximize ethylene exports at its Morgan’s Point terminal, it would likely tighten the US market, since the new crackers being proposed and built are integrated with downstream units.

But D’Anna’s comments raises an interesting scenario. Europe may be willing to import ethylene to preserve its downstream units and its manufacturing base. In the future, US chemical producers could add ethylene capacity to serve a global ethylene market. Growing supplies of low-cost feedstock ethane in the US could make such a global ethylene market possible.

ETHANE SUPPLIES CONTINUE GROWING IN THE US
Ethane produced from natural gas processing plants should reach 2.74 million bbl/day in 2025, steady from 2024, according to the Short Term Energy Outlook from the Energy Information Administration (EIA).

US oil and natural gas production should also continue increasing, with oil reaching 13.54 million bbl/day in 2025, and dry natural gas reaching 104.62 billion cubic feet/day, according to the EIA.

As oil and natural gas production is set to rise steadily over the next two years, ethane output from processing plants is also projected to increase, according to Kojo Orgle, feedstock analyst for ICIS. Orgle monitors the US markets for ethane and other petrochemical feedstock.

With limited growth in domestic ethane consumption as a petrochemical feedstock, additional supply will need to be directed toward exports. Consequently, the ethane market will rely heavily on expansions in US waterborne NGL export capacity. Ethane supplies hit record highs this year and may continue to grow if new outlets do not keep pace with production.

OTHER MIDSTREAM DEVELOPMENTS
Enterprise noted future demand for natural gas from data centers being built in Texas and from new power plants being developed under the recent Texas Energy Fund.

Energy Transfer Partners is pursuing similar opportunities for power plants and data centers throughout its natural gas network, from Arizona to Florida and from Texas to Michigan.

Energy Transfer received requests to connect to about 45 power plants in 11 states that could consume gas loads of up to 6 billion cubic feet/day.

For data centers, Energy Transfer received requests from 40 that could consume gas loads of up to 10 billion cubic feet/day.

EnLink Midstream said data centers could represent at least 7.5% of US electricity consumption by 2030, up from 2.5%.

With rising natural gas demand from data centers and continued capital discipline among producers, natural gas prices are projected to rise in 2025 and in 2026, Orgle said.

Such demand growth could provide support for natural gas prices, which could raise prices for ethane.

If US ethane export capacity does not grow fast enough to drive substantial ethane disposition, increased ethane rejection may occur as higher natural gas prices boost ethane’s fuel value, Orgle said.

MIDSTREAM PROJECTS

The following table shows some of the midstream projects being developed in the US.

Company	Project	Type	Capacity	Units	Location	Startup
Brazos Midstream	Sundance I	Gas Plant	200	million cubic feet/day	Martin County	Oct-24
Brazos Midstream	Unnamed	Gas plant	300	million cubic feet/day	–	H2 2025
Delek	Unnamed	Gas Plant	110	million cubic feet/day	Delaware	H1 2025
Durango Midstream	Kings Landing, Phase I	Gas Plant	200	million cubic feet/day	Eddy County, NM	Q4 24
Durango Midstream	Kings Landing, Phase II	Gas Plant	200	million cubic feet/day	Eddy County, NM	na
Energy Transfer	Frac IX	Fractionator	165,000	bbl/day	Mont Belvieu	Q4 26
Energy Transfer	Badger	Gas Plant	200	million cubic feet/day	Delaware	mid 25
Energy Transfer	Permian processing expansions*	Gas Plant	200	million cubic feet/day	Permian
Energy Transfer	Expansion of Nederland NGL terminal	Terminal	Up to 250,000	bbl/day	Nederland, Texas	mid 25
Energy Transfer	Expansion of Orla East	Gas pPlant	50	million cubic feet/day	Orla, Texas	Q3 24
Entergy Transfer	Lonestar Express Expansion	Pipeline	90,000	bbl/day		2026
Enterprise	Fractionator 14	Fractionator	195,000	bbl/day	Mont Belvieu	Q3 25
Enterprise	Mentone West (Mentone 4)	Gas Plant	300	million cubic feet/day	Delaware	Q3 25
Enterprise	Mentone West 2	Gas Plant	300	million cubic feet/day	Delaware	h1 26
Enterprise	Mentone 3	Gas Plant	300	million cubic feet/day	Delaware	in service
Enterprise	Leonidas	Gas Plant	300	million cubic feet/day	Midland	In service
Enterprise	Bahia NGL pipeline	Pipeline	600,000	bbl/day		Q3 25
Enterprise	Neches River Terminal (NRT), phase 1	Terminal	120,000 ethane, 900,000 refrigerated tank			Q3 25
Enterprise	Neches River Terminal (NRT), phase 2	Terminal	add 60,000 ethane to raise total to 180,000, Propane 360,000			H1 26
Enterprise	Ethylene Export Expansion*	Terminal	550,000-2m tonnes/year			Q4 24 & Q4 25
Enterprise	Orion	Gas Plant	300	million cubic feet/day	Midland	Q3 25
Enterprise	Enterprise Hydrocarbons Terminal (EHT) LPG expansion	Terminal	300,000	bl/day	Houston Ship Channel	end 2026
Gulf Coast Fractionators JV *	GCF Fractionator	Fractionator	135,000	bbl/day	Mont Belvieu	24-Nov
Moss Lake	Hackberry NGL Project	Terminal	315,000	bbl	Calcesieu Ship Channel	NA
Moss Lake	Hackberry NGL Project	Fractionator	300,000	bbl	Calcesieu Ship Channel	NA
MPLX	Preakness II	Gas Plant	200	million cubic feet/day	Delaware	started up
MPLX	Secretariat	Gas Plant	200	million cubic feet/day	Delaware	H2 25
MPLX	Harmon Creek II	Gas Plant	200	million cubic feet/day	Marcellus	started up
MPLX	Harmon Creek III	Gas plant	300	million cubic feet/day	Marcellus	H2 26
MPLX	Harmon Creek III	de-ethanizer	40,000	bbl/day	Marcellus	H2 26
MPLX	BANGL pipeline**	Pipeline	expansion from 125,000 to 250,000 bbl/day			Q1 25
ONEOK	MB-6 Fractionator	Fractionator	125,000	bbl/day	Mont Belvieu	year end 24
ONEOK	West Texas NGL Pipeline Expansion	Pipeline	increase to 740,000	bbl/day		year end 24
ONEOK	Elk Creek Pipeline Expansion****	Pipeline	increase to 435,000	bbl/day		Q1 25
ONEOK	Medford Fractionator rebuild	Fractionator	210,000	bbl/day	Medord, Oklahoma	Q4 26, Q1 27
Targa	Train 9 Fractionator	Fractionator	120,000	bbl/day	Mont Belvieu	started up
Targa	Train 10 Fractionator	Fractionator	120,000	bbl/day	Mont Belvieu	started up
Targa	Train 11 Fractionator	Fractionator	150,000	bbl/day	Mont Belvieu	Q3 26
Targa	Greenwood	Gas Plant	275	million cubic feet/day	Midland	Q4 23
Targa	Greenwood II	Gas Plant	275	million cubic feet/day	Midland	started up
Targa	Wildcat II	Gas Plant	275	million cubic feet/day	Delaware	Q2 24
Targa	Roadrunner II	Gas Plant	230	million cubic feet/day	Delaware	started up
Targa	Bull Moose	Gas Plant	275	million cubic feet/day	Delaware	Q2 25
Targa	Pembrook II	Gas Plant	275	million cubic feet/day	Midland	Q4 25
Targa	Daytona NGL Pipeline	Pipeline	400,000	bbl/day		Completed
Targa	LPG Export Expansion	Terminal	1m bbl/month			Q3 23
Targa	Galena Park LPG terminal expansion	Terminal	650,000 bbl/month			H2 25
Targa	Falcon II	Gas Plant	275	million cubic feet/day	Delaware	Q2 26
Targa	Bull Moose II	Gas Plant	275	million cubic feet/day	Delaware	Q1 26
Targa	East Pembrook	Gas Plant	275	million cubic feet/day	Midland	Q2 26
Targa	East Driver	Gas Plant	275	million cubic feet/day	Delaware	Q3 26

Insight article by Al Greenwood

Thumbnail photo: Polymer pellets (source: Shutterstock)