Joint ventures indicate Energy Transfer is expanding operations at Nederland site

Two new joint ventures indicate the possibility of new projects at Energy Transfer’s (formerly known as Sunoco) site in Nederland.
Thursday, March 22, Energy Transfer Partners, L.P. (ETP) announced that it has entered into definitive agreements with Satellite Petrochemical USA Corp. to form the joint venture Orbit Gulf Coast NGL Exports, LLC.
Satellite Petrochemical, USA Corp (STL) falls under the umbrella/parent company of Zhejiang Satellite Petrochemical Co. Ltd., which is the largest acrylic products manufacturer in China and among the top 5 in the world, according to Indeed.com. The products are sold and exported to more than 20 countries and regions, to include North and South America, the Middle East, Europe, Southeast Asia, and Africa.
According to the release by ETP, the purpose of constructing a new export terminal on the U.S. Gulf Coast is to provide ethane to Satellite for consumption at its ethane cracking facilities in China.
“Neither company specifically identified where these projects would be other than the U.S. Gulf Coast. However, Nederland makes the most sense,” Kristen Hays, senior petrochemical editor at S&P Global Platts told The Business Journal. Platts is a provider of energy and commodities information and a source of benchmark price assessments in the physical energy markets. “ETP already has its huge crude oil and LPG terminal there, connections to Lone Star at Mont Belvieu, pipeline from Mont Belvieu to Geismar, etc. But since neither company has identified Nederland as the site, they probably will not until they work out all the details.”
Orbit, the name of the JV between ETP and Satellite, will also construct a 20-inch ethane pipeline originating at ETP’s Mont Belvieu Fractionators that will make deliveries to Orbit’s ethane export terminal on the U.S. Gulf Coast as well as domestic markets in the region, according to ETP’s release.
At the terminal, Orbit will construct an 800,000 barrel refrigerated ethane storage tank and a 175,000 barrel per day ethane refrigeration facility. ETP will be the operator of the Orbit assets. Additionally, ETP will construct and wholly own the infrastructure that is required to both supply ethane to the pipeline and to load the ethane on to Very Large Ethane Carriers (VLECs) destined for Satellite’s newly constructed ethane crackers in China’s Jiangsu Province.
Subject to Chinese Governmental approval, it is anticipated that the Orbit export terminal, will be ready for commercial service in the 4th Quarter of 2020.
As part of these agreements, ETP and Satellite also executed agreements for the sale of ethane at the terminal. ETP will provide Satellite with approximately 150,000 barrels per day of ethane under a long-term, demand-based agreement. ETP will also provide storage and marketing services for Satellite.
ETP (via Sunoco Logistics) was the first company in North America to export ethane by utilizing its Mariner West system, which exports ethane to Canada. Subsequently, in March 2016, ETP became the first company in North America to export ethane via waterborne vessel out of ETP’s Marcus Hook terminal, which also serves domestic markets.

Joint venture with NOVA Chemicals Corporation

NOVA Chemicals Olefins announced on Thursday, March 22, that it is also forming a joint venture with ETP, via its subsidiary, Sunoco Partners Marketing & Terminals L.P.
The two companies have entered into a non-binding memorandum of understanding regarding a potential joint venture to develop an ethylene export terminal to be located on the “United States’ Gulf Coast.”
Again, all signs point to this project taking place at ETP’s Nederland site, according to Hays.
Mark Horner, director of communications at NOVA Chemicals Inc., said he was unable to confirm that the project would be located in Nederland because “it is in preliminary stages and remains confidential at this point.”
Horner did say, however, that “the East Texas terminal location is a superior location for ethylene infrastructure due to its close proximity to pipelines moving ethylene between Texas and Louisiana and quicker dock access compared to the highly congested Houston Ship Channel area” and that NOVA “aim(s) to make a final investment decision by late summer 2018.”
According to the NOVA press release, the parties will seek market commitment for an anticipated start-up of the terminal by mid-2020. The terminal is expected to have the capability to export 800 kta (1.8 billion pounds) per year of ethylene to the global market.
“An ethylene export terminal builds upon NOVA Chemicals’ leadership position in the continually expanding North American ethylene industry,” explained Naushad Jamani, senior vice president, Olefins & Feedstock for NOVA Chemicals. “Together with the 2017 acquisition of our interest in the Geismar, Louisiana Olefins facility and our recently announced proposed joint venture in Texas with Total and Borealis, this project would further extend NOVA Chemicals’ presence in the U.S. Gulf Coast, allowing us to better serve our customers in the Americas.”
The project would connect the Lone Star NGL Mont Belvieu LP (“Lone Star”) storage facility at Mont Belvieu, Texas, where the NOVA Ethylene Hub operates, and the Louisiana ethylene market to the export facility via existing pipelines already approved for ethylene transportation. The project would provide significant value by linking low-cost U.S. Gulf Coast ethylene production to derivative plants around the world, the release states.
The NOVA Ethylene Hub is the primary transaction point for the purchase and sale of ethylene in the U.S. Gulf Coast, and is operated by NOVA Chemicals under a long-term lease from Lone Star, which is an affiliate of SPMT. The NOVA Ethylene Hub would provide an active ethylene source for delivery to the export facility by both physical transfer and exchange.
The proposed joint venture is subject to sufficient market interest and customary conditions and approvals, including completion of definitive agreements and approval of NOVA Chemicals board of directors, according to the release.
Costs of neither project have been released. Energy Transfer Partners did not return The Business Journal’s phone calls or e-mail correspondence. n
 

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