US ethane exports to China to drop 24% in 2025, 51% in 2026
US output of ethane to fall 4% in 2025, 12 % in 2026
At least 9 ethane tankers stalled or drifting along U.S. Gulf Coast
By Arathy Somasekhar
HOUSTON, June 10 (Reuters) - U.S. ethane exports will fall by 24% in 2025, while production of the shale gas will decline by 4%, the U.S. Energy Information Administration said on Tuesday, after Washington requested U.S. exporters seek licenses to ship ethane to top buyer China.
Around half of all U.S. ethane exports head to China, and the license requirement has already impacted exports and raised questions about extracting ethane from natural gas versus leaving it in the stream.
U.S. ethane exports will fall to 410,000 barrels per day in 2025 from a previous forecast of 540,000 bpd, the EIA said, adding that output would fall to 2.8 million bpd from 2.9 million bpd estimated previously.
Exports would fall by 51% to 310,000 bpd in 2026, while output would fall by 12% to 2.7 million bpd, the government's statistical arm said.
"We reduced our forecast for U.S. ethane production for both 2025 and 2026 because we expect that without an outlet for exports, ethane will not be separated from the natural gas stream," EIA wrote in its monthly Short-Term Energy Outlook.
Ethane is separated from natural gas, a process called ethane recovery, when prices for it are higher than prices for natural gas and it is profitable to do so.
Almost all the ethane currently exported to China can be left in the gas stream if the export challenges continue, analysts have said, boosting natural gas volumes and reducing ethane output.
Energy Transfer ET.N and Enterprise Products Partners EPD.N, two of the top U.S. ethane producers and exporters, said that they have received letters from the U.S. Commerce Department requiring the companies to apply for a license to ship ethane to China.
Enterprise said it also received a notice from the U.S. government of its intent to deny emergency requests for three proposed export cargoes of ethane totaling around 2.2 million barrels to China.
At least nine vessels, originally expected to load ethane and set sail for China, were stalled or drifting along the U.S. Gulf Coast on Tuesday, according to ship-tracking data.
(Reporting by Arathy Somasekhar in Houston; Editing by Lisa Shumaker)
((arathy.s@thomsonreuters.com; +1 832 610 7346; X: @ArathySom;))