HOUSTON — Houston-based pipeline company Enterprise Products Partners has signed a 30-year agreement with the Port of Houston Authority and will build its new ethane export facility at the Houston Ship Channel, company and port officials said Thursday.
The company first announced plans for the project in April but didn’t say exactly where the facility would be located.
The company said it expects the ship channel facility to be online by the third quarter of 2016. It said it already has contracts in place for some ethane customers and is in talks with others for the remaining capacity.
The facility will have the capacity to load 240,000 barrels of ethane per day for export. Michael Creel, CEO of Enterprise’s general partner, has said the facility will be the largest export ethane export terminal in the world.
The company plans to construct a pipeline to connect the new terminal with its natural gas liquids fractionation and storage facility in Mont Belvieu, which will provide the ethane for export.
Ethane, a byproduct of natural gas and crude oil production, is used primarily to produce ethene, a building block of the common plastic polyethylene. Ethane also is used to make anti-freeze and detergent.
The company estimates that by 2020, U.S. ethane production capacity will exceed demand by as much as 700,000 barrels per day. It’s pitched the facility as a way for domestic ethane producers to reach new markets.
Enterprise Products Partners declined to disclose the cost of the project.
The new export terminal will be adjacent to Enterprise’s existing liquefied petroleum gas terminal at the ship channel.
“The agreement is exciting for the port and the entire region in terms of creating jobs and fostering positive economic impact,” said Janiece Longoria, chair of the Port Commission of the Port of Houston Authority, in a statement.