By Arathy Somasekhar
Houston (Reuters) -thane Traders Satellite Chemical USA and Vinmar International have received letters from the US government allowing them to load ethane on ships intended for China, but prohibiting the unloading of ethane in China without authorization, said sources familiar with the case.
The letters received Wednesday from the American trade department followed a license requirement imposed several weeks ago for exports from ethane to China, blocking expeditions and putting ships to derive or anchor the American coast of the Gulf.
The letter could be perceived as the administration preparing to raise the restriction, said industry sources and analysts.
Despite this, there would probably still be a certain reluctance to load ethane – which is extracted from American shale gas and mainly used as a raw material for petrochemicals – because the vessels for China could be stuck in limbo according to the duration of the restriction of the full path, said Aj O’Donnell, analyst at Tudor Pickring Holt & Co.
The United States has also sent letters similar to the partners in Enterprise and Energy Transfer on Wednesday, Reuters reported exclusively.
China Satellite Chemical Co Ltd, the satellite parent Chemical USA, and Vinmar refused to comment.
About half of all American ethane exports are heading for China, and the flow of flows lowered the prices of ethane on the concerns of the national excess offer. Restrictions should reduce the benefits of the best ethane producers.
Supertanker Gas Bluebonnet loaded for Chinese satellite chemicals at the installation of Nederland of Energy Transfer in Texas on June 12 and was near the Panama Canal on Thursday, the ship’s monitoring data on LSEG and KPLER showed. At least nine other oil tankers derived or anchored along the American Gulf, while two were moored on loading quays.
In the short term, export terminal operators such as energy transfer and the company could benefit because they can push their buyers to take care of the platforms, industry sources said.
However, the Morgan Point Dock companies near Houston could see volumes lower as a result of ethane restrictions, said O’Donnell by Tudor Pickering Holt & Co.
Chinese petrochemical companies use ethane, extracted from natural gas, as a raw material because it is a cheaper alternative than naphta, while American oil and gas producers need China to buy their natural gas liquids, because the interior supply exceeds demand.
(Report by Arathy Somasekhar in Houston and Trixie Yap in Singapore; edition by Stephen Coates)
