New Export Licensing Requirements Expected to Curb U.S. Ethane Exports: EIA

U.S. ethane exports are expected to decline by 80,000 barrels per day (b/d) during 2025 and by 177,000 b/d in 2026, according to a June 18 report published by the U.S. Energy Information Administration. The decline can be attributed to new licensing requirements for U.S. ethane exports to China.

The licensing requirement, announced by the Commerce Department’s Bureau of Industry and Security (BIS), impacts ethane cargos transported from Energy Transfer’s terminal in Nederland, Texas and Enterprise’s Orbit terminal in Morgan’s Point, Texas. Both operators have long term supply contracts with Chinese ethylene plants and in line with the new licensing requirements must apply for special licenses to continue exporting to China.

The bureau reports that ethane cargoes to China create an unacceptable risk of being utilized for military purposes. As a result, trade has been largely muted. The last shipment of U.S. ethane to China left May 23 from Energy Transfer’s terminal on the U.S. Gulf Coast. As of June 16, seven Very Large Ethane Carriers (VLECs), are stalled along the U.S. Gulf Coast, according to data from Vortexa.

U.S. ethane exports to China accounted for 47 percent of total U.S. ethane exports during 2024. U.S. ethane exports averaged a record 492,000 b/d during 2024, up 21,000 b/d compared to the previous record set during 2023. Growth in global petrochemical sector demand and rising tanker capacity have driven the increases in U.S. ethane exports. Low prices for U.S. ethane relative to other feedstocks worldwide also contributed to the record exports during 2024.

U.S. ethane exports during 2024 were also supported by higher production. U.S. ethane production rose seven percent to average a record 2.8 b/d during 2024, driven by increased ethane recovery in the Permian Basin. In the U.S. almost all ethane is recovered at natural gas processing plants, which remove ethane and other natural gas plant liquids from raw natural gas.