The Ineos ship is headed to Rafnes, Norway. At presstime, the ship was sailing past Kemah, near Galveston.

Enterprise said near midday on Thursday that Intrepid, loaded with approximately 265,000 barrels of ethane, set sail from the facility this morning en route to the INEOS facility at Rafnes in Norway. The Morgan’s Point ethane export facility, which is the largest of its kind in the world, has a design loading capacity of 10,000 barrels per hour.

The company said that the driving force behind development of the terminal is the growing international demand for abundant U.S. ethane from shale plays, which offers the global petrochemical industry a low-cost feedstock option and supply diversification. By providing producers with access to the export market, the Morgan’s Point terminal is also facilitating continued development of U.S. energy reserves.

Supply for the new ethane export terminal is sourced from Enterprise’s natural gas liquids fractionation and storage complex in Mont Belvieu, Texas, and transported through a new 18-mile, 24-inch diameter pipeline that was completed in February of 2016, Enterprise said. In addition, the Mont Belvieu complex is connected to ethane production from the Marcellus and Utica Shale regions through the ATEX pipeline.

OPIS notes that Intrepid will now carry double honors of being the first ship to export ethane out of Marcus Hook near Philadelphia in March as well as the first ship to export ethane out of the new Morgan’s Point terminal on the Gulf Coast soon.

The cargo loading has been slow due to expected operational and logistics issues related to a facility startup.

Intrepid, which has a 15,000-ton or 27,500-cubic-meter capacity, is considered a relatively small LPG tanker. A ship of that cargo size should be fully loaded within one to two days, sources said.

Intrepid is no stranger to a slight ethane cargo delay. Earlier this year, the ship faced similar delay at Sunoco Logistics’ Marcus Hook for its first ethane export out of Philadelphia. The Marcus Hook complex was said to have started commissioning its ethane export facilities late 2015, but the first ethane export cargo only left in March.

On the Gulf Coast, Enterprise began the initial startup and commissioning process at its new ethane export terminal at Morgan’s Point, Texas, on July 19.

The new NGL export terminal has a capacity of 200,000 b/d, and 90% of its operating capacity has been contracted, EPP said last year.

A slow startup process at the new Gulf Coast ethane export terminal is not unexpected. Industry sources expect limited ethane export from Morgan’s Point at the beginning, and the terminal should reach its maximum capacity in the latter half of 2017, possibly closer to November.

Prior to Intrepid, Ineos had planned in late July to send JS Ineos Insight, a similarly sized ship as Intrepid, from Norway to the Gulf Coast to load at Morgan’s Point around Aug. 2.

However, Insight never made it to Texas for the first ethane loading at the new terminal, possibly because Enterprise was not ready to load cargo at that time.

Both Insight and Intrepid are owned by Ineos, and they are two of the eight LPG tankers the company built to deliver shale gas from the U.S. to Europe.

On the shipping front, the market would need more Very Large Gas Carriers to be delivered to facilitate the export move to Asia or Europe from the U.S. Gulf Coast. Some major players, including Reliance and Oriental Energy, are waiting for their ship deliveries to make that much-anticipated arbitrage move to Asia, they said.

The stronger ethane outflow from the U.S. is expected to occur at year-end.

Also, some crackers abroad may take some time to convert to ethane from naphtha, with some projects in Brazil and the U.K. slated for completion in the second half of 2017, sources said.

The U.S. is facing a glut of NGL supplies, with producers in the Midwest eyeing an incremental supply push to the coastal markets for exports. However, logistics issues present a bottleneck for higher export flow, besides arbitrage
economics.