A U.S. ethane tanker has set a new course to India, following a regulatory shift that requires U.S. exporters to obtain licenses for shipping ethane to China, which is the primary buyer for this material. Historically, about half of all U.S. ethane exports have gone to China, where they play a crucial role in the petrochemical industry. The vessel’s redirection highlights how ongoing trade tensions between the U.S. and China are influencing global ethane trade routes.
The Liberia-flagged STL Qianjiang, which had originally loaded at the Energy Transfer terminal in Nederland, Texas, was intended for China’s Satellite Chemical. However, its destination was recently updated to Dahej, a port situated on India’s West Coast. According to ship tracking data from LSEG and Kpler, the final recipient of this shipment is Reliance Industries in India.
This vessel has predominantly made trips between the U.S. and Satellite Chemical’s petrochemical facility in Lianyungang since July 2022. Energy Transfer, along with Enterprise Products Partners, both major U.S. ethane producers and exporters, received notifications from the U.S. Commerce Department regarding the need for export licenses to China. Enterprise indicated that the government had also conveyed intentions to deny emergency requests for three proposed export cargoes of ethane destined for China, totaling approximately 2.2 million barrels.
Chinese petrochemical companies favor ethane due to its cost-effectiveness compared to naphtha, while U.S. energy producers are counting on China to absorb their surplus natural gas liquids amidst a situation of oversupply in the domestic market.