In a significant regulatory shift, the U.S. Department of Commerce has authorized major producers—Enterprise Products and Energy Transfer—to load ethane on vessels destined for China and depart U.S. ports. However, the catch is that unloading in China remains prohibited without additional explicit approval, reports Reuters.
U.S. Allows Ethane Exports to China
This partial easing follows a licensing restriction imposed in late May, which previously halted ethane shipments and left several very large gas carriers (VLGCs) stranded off the Gulf Coast. Although the ability to load could help alleviate congestion at U.S. export terminals, exporters are cautious. They risk fines as high as double the cargo’s value if they offload ethane in China without securing proper authorization.
Ethane is a vital feedstock in China’s petrochemical sector, traditionally accounting for about half of U.S. ethane exports. This move signals a potential thaw in U.S.-China trade tensions, especially as China concurrently begins issuing rare-earth export licenses and expediting approvals in select trade areas.
Despite this development, companies are expected to hold off on loading for now—awaiting comprehensive licensing that allows full unloading rights. Without it, they face significant financial and operational risks. As a result, a full resumption of exports hinges upon upcoming regulatory decisions from U.S. authorities.
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Source: Reuters
