Executive Summary:
Infrastructure: The global fleet of ethane-capable vessels is set to nearly double by the end of 2028, according to East Daley research.
Exports: NGL exports declined 16.2% W-o-W for the week ending May 29, driven by a sharp drop in LPG exports.
Rigs: The total US rig count decreased in the week of May 23 to 549 rigs. Liquids-driven basins decreased W-o-W from 426 to 424.
Infrastructure:
The global fleet of ethane-capable vessels is set to nearly double by the end of 2028, according to East Daley research. Today, 44 vessels are operating worldwide, primarily very large ethane carriers (VLECs). Another 43 vessels are scheduled for delivery through 2028, increasing total carrying capacity from 4.2 MMcm today to 8.4 MMcm. Nearly 90% of the new capacity is expected online by the end of 2027.
The rapid fleet expansion comes as US ethane exports continue to reach record levels. Export infrastructure is expanding across the Gulf Coast, led by Enterprise Products’ (EPD) Neches River terminal and Energy Transfer’s (ET) Nederland expansion, while global petrochemical demand increasingly relies on advantaged US ethane feedstock.
The shipping sector is preparing for that growth. With 11 VLECs under construction, Pacific Gas accounts for roughly one-quarter of the new vessel orderbook. Meanwhile, Satellite Chemical is investing in six ultra-large ethane carriers (ULECs), a new class of 150,000-cm vessels that offer greater economies of scale and the flexibility to transport LNG.
That flexibility creates an interesting wildcard. Unlike traditional ethane carriers, ULECs can potentially shift between ethane and LNG markets, depending on economics. If LNG freight markets become more attractive, some of this future capacity may not be fully available to support growth in the ethane trade.
The bigger picture remains constructive. The vessel orderbook largely removes a transportation bottleneck that has periodically constrained US ethane exports. As new ships enter service, the industry will have the logistical capacity to support the next wave of export growth from the Gulf Coast.
With the construction boom, the question shifts from whether the ships will be available, to whether global petrochemical demand can absorb the growing volumes of US ethane seeking a home overseas.
Exports:
NGL exports declined 16.2% W-o-W for the week ending May 29, driven by a sharp drop in LPG exports.
LPG exports fell 20.6% W-o-W, with declines across nearly all terminals except Targa’s Galena Park (+1.1%), likely reflecting softer seasonal demand following the winter heating season.
Ethane exports were essentially flat, rising just 0.8% W-o-W. A substantial increase at Enterprise’s Morgan’s Point terminal (+61.1%) was largely offset by lower volumes at the company’s Neches River terminal (-39.6%) and Energy Transfer’s Marcus Hook facility (-22.2%).
Rigs:
The total US rig count decreased in the week of May 23 to 549 rigs. Liquids-driven basins decreased W-o-W from 426 to 424.
- Bakken (+2): Devon Energy, SOGC LLC
- Anadarko (-2): Carmen Schmitt, Val Energy
- Permian
- Delaware (-1): SM Energy
- Eagle Ford (-1): T-C Oil Company
