Over the past decade, the U.S. has become a leading ethane exporter, fueled by abundant supply, growing global demand for lighter petrochemical feedstocks, competitive pricing, and long-term customer contracts that enabled substantial investments in export infrastructure. As of September 2024, U.S. waterborne exports reached ~0.4 MMBPD, or 15% of domestic ethane production. In the next 12-18 months, a second wave of ethane export capacity and new Very Large Ethane Carriers (VLECs) will drive further export growth. Key questions include: Is there enough ethane to sustain this growth? Will rising exports push prices above their long-standing sub-25 cpg range? And, which markets are driving the demand?

U.S. Ethane Supply Demand Balance

With rising wet gas production, U.S. ethane potential continues to grow, reaching around 4.0 MMBPD by 3Q 2024. Ethane potential refers to the theoretical volume that can be extracted, based on plant limitations. However, only 65% of this potential is actually recovered to meet gas quality specs, midstream contracts, and firm sales commitments, leaving about 35% unextracted in the natural gas stream or excluded from NGL recovery.

Of the ethane extracted, about 2.0 MMBPD is used domestically for ethylene production, leaving roughly 0.5 MMBPD for exports. While midstream capacity constraints (i.e., adequate NGL pipeline and fractionation) limit the exportable ethane, there remains ample supply to meet growing export demand. Additionally, increasing associated gas production further boosts U.S. ethane availability.

Global Ethane Pull

The shift to low-cost ethane as a feedstock began with steam crackers in Europe (Ineos, Shell, Borealis) and India (Reliance) converting from naphtha. Ethane export markets are similar to early LNG trade—long-term, point-to-point contracts with marine vessels operating on regular routes for decades. Unlike LPG, LNG, and crude, there is no spot market for ethane, and exports rely on a few creditworthy buyers. The key to U.S. ethane export growth is not supply, but the ability to secure new markets with dependable buyers to support investments in terminals and vessels.

U.S. ethane remains cost-competitive, attracting buyers from regions with higher production costs, such as Asia and Europe. China is a key destination, with 50% of U.S. ethane exports going to Chinese ethylene crackers. Major petrochemical companies like Sinopec, CSPC, Yulong, BASF, and PetroChina are developing new light cracker capacity using U.S. ethane, adding 22 million tons of ethylene capacity over the next five years. INEOS is also investing $3.7 billion in a 1.45 mt/yr ethane cracker in Antwerp, expected to add 100 MBPD of export demand by 2027. Additionally, growing interest in ethane from other South Asian countries further boosts global demand for U.S. ethane. The combination of rising global ethylene demand, especially in Asia, and low-priced U.S. ethane continues to drive export growth.

U.S. Ethane Export Capacity Poised to Grow

Three major ethane export terminals in the U.S, namely Marcus Hook Terminal (Northeast), Morgans Point Terminal and Orbit Terminal (both located in Texas) with combined export capacity of ~0.5 MMBPD are exporting ~0.4 MMBPD of ethane in aggregate as of 2024. 

To meet rising global demand for ethane, sizable incremental ethane export capacity is under construction that will more than double U.S. ethane export capacity:

1. Enterprise Products Partners is expanding its Neches River export facility with a 120 Mbpd ethane refrigeration train expected online by Q3 2025 (Phase 1). In Phase 2, a flexible refrigeration train will be added, capable of handling 180 Mbpd of ethane or 360 Mbpd of propane. Additionally, Enterprise is converting a 120 Mbpd train at its Morgan’s Point facility to handle either ethane or ethylene, adding a total of 240 Mbpd of dedicated ethane capacity and 300 Mbpd of flexible capacity post-expansion.
2. Energy Transfer is expanding its ethane export capacity through the Flexport project, which will add 250 Mbpd of NGL export capacity, with an estimated 150 Mbpd dedicated to ethane. Energy Transfer is also expanding the Marcus Hook terminal, potentially adding another 135 Mbpd of capacity in the Northeast.

Despite these expansions, ethane production growth is expected to continue at a pace that maintains current levels of ethane rejection through at least 2030. This means that despite growing exports, the surplus of ethane in the U.S. will persist, keeping prices relatively low, maintaining the central premise for ethane exports. As global ethane demand continues to rise, driven by expanding petrochemical projects in Asia, the U.S. is well-positioned to capitalize on its abundant supply and growing export capacity.

-Kush Thakkar

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Enkon Energy Advisors is a boutique consulting firm specializing in oil & gas, and energy transition since 2012. We bring deep expertise in a range of markets including natural gas, NGLs, Oil, LNG, and Energy Transition where we provide commercial and market advisory to investors, energy companies, and project developers with consulting services, subscription reports, and analytics, with the goal of delivering commercially actionable outcomes to our client.