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U.S. natural gas liquids exports reach record highs in April

Ship tracking data revealed that U.S. natural gas liquid exports reached a new record in April despite a trade dispute between the U.S.

Recent trade developments have put at risk U.S. Exports of Natural Gas Liquids (NGLs), like ethane butane and propylene, which are used in the manufacture of plastics, chemicals, as well as heating and cooking. U.S. Exports have reached a new record every year since 2010, thanks to an abundance cheap shale gas.

NGLs are the newest energy products caught up in the trade war between two of the largest economies.

According to the U.S. government's statistical agency, nearly half of U.S. exports of ethane go to China. China has no other options, as there are few alternatives. Chinese petrochemical companies use it as a feedstock as it is cheaper than alternatives naphtha. Meanwhile, U.S. producers of oil and gas need China to purchase their natural gas liquids because domestic supply exceeds the demand.

Data from the ship tracking companies Kpler & Vortexa revealed that in April, the U.S. exported NGLs at a record-breaking rate of 2.9 million barrels a day (bpd).

Kpler data shows that exports to China dropped 35% in November to 619,00 bpd, the lowest level since November 2023. Two sources said this week that China has waived the 125% duty on imports of ethane from the U.S., imposed earlier in the month.

In the global rerouting of oil, other countries have increased their purchases of U.S. NGLs to compensate for the loss of Chinese purchasing.

Kpler data shows that India has more than tripled the amount of oil it purchases, reaching a new record of 179,000 barrels a day.

Brazil increased its purchases by more than doubling to 113,000 barrels per day, which is the highest level in five years. Japan, as the second-largest buyer of U.S. Natural Gas Liquids, increased shipments to nearly 400,000 barrels per day, the most since February 2023.

The Energy Information Administration predicted that U.S. ethane production would rise by 3.6% this year to 2.9 millions bpd. It added that the majority of this increase in production would be exported to meet growing international demand.

In a quarterly earnings conference, Jim Teague, co chief executive officer Enterprise Products Partners, one of the largest exporters of U.S. Natural Gas Liquids, said that the market had already begun rerouting the barrels to the Middle East and U.S., which are the two biggest suppliers of liquefied petrol gas (a mixture of butane and propane). The biggest importers were China and India.

The company stated that it did not see any disruptions in its exports of butane, ethane or propane.

Rival Energy Transfer is also one of the largest exporters in the U.S. of NGL and said that it had no problem finding a buyer for its LPG or ethane.

Enterprise Products reported that total NGL pipe transportation volumes increased 5% while volumes at marine terminals grew 11%. Energy Transfer increased its NGL exports by 5% and transportation volumes by 4%. (Reporting and editing by David Gregorio in Houston, Arathy McCartney and Georgina Mccartney from Houston)

(source: Reuters)