Houston (November 8, 2017) − On November 9, American Ethane Company, LLC (AEC) is participating in a historic summit between President Donald Trump and President Xi Jinping in Beijing, as they sign major trade deals between the two nations.
In June 2017, AEC signed a 20-year, $26 billion binding agreement to deliver ethane gas from a terminal on the gulf coast of Texas to a new ethylene cracker in China, which will be built by the Nanshan Group. The deal with the Nanshan Group is one of the largest deals represented at the November 2017 trade summit, and is predicted to supply 2.6 million metric tons of ethane per year for 20 years.
American Ethane Company is developing the largest ethane export terminal on the US Gulf Coast with annual output of 10.0 million metric tons per annum of Liquefied Ethane Gas (LEG). AEC commissioned and completed a full FEED study in May of 2015. Construction of the terminal will be coordinated with downstream infrastructure in China and is expected to be started in early 2018 and completed by 2020.
“American Ethane is greatly honored to receive this invitation by President Donald Trump and President Xi Jinping. The contract we sign between American Ethane and Nanshan is a 20-year, binding take or pay agreement for American Ethane to supply 2.6 million annual tons of liquid Ethane from our terminal Development on the US gulf coast to Nanshan Group in China. The economic value of the gas sale will exceed $26 billion with several billion dollars more of infrastructures built in the US and China. This deal will create thousands of jobs in our countries and American Ethane will also invest in infrastructure in China. As one of the larger deals of this Summit, the agreement meets the US goal of reducing the trade deficit, China goal of creating for the first time an Ethane-to-Ethylene production in China (an efficient and green industry) and the mutual goal of providing a long term economic link between our two Countries”, said John Houghtaling, Chief Executive Officer of American Ethane.
A byproduct of natural gas, ethane is primarily used to create ethylene. Ethane is removed from the raw gas stream during natural gas processing and fractionation. Ethane is further processes through a process referred to as steam cracking which results in ethylene, a key component of polyethylene, the world’s most widely used plastic. Ethane can also be used as a cleaner burning fuel source for power generation.
“Through this long term supply contract billions of dollars of infrastructure will link a 20 year supply from the US shale gas revolution to China. This is a win-win for the US and China. The Chinese market has realized the benefit of linking a gas purchase to internal gas prices within the US as opposed to the purchasing gas in other parts of the world that will be tied to volatile future oil prices.”
Under the terms of the agreement, Nanshan has agreed to a binding take-or-pay contract to purchase ethane for twenty years. American Ethane has more than 10 potential petrochemical customers in China each willing to take 1,0+ million tons of ethane per year. Two of them, 2.6 millions tons per year each, are in the final negotiation phase and plan to reach definitive SPA by end of 2017, which will strengthen US-China trade ties even further.
About American Ethane Company
American Ethane Company, LLC (AEC) is a U.S.-based, privately owned energy company headquartered in Houston, Texas. Founded in 2014, the Company is focused on the development of projects to export ethane across the globe. The company has developed strong market in China with a regional office in Shanghai. For more information visit: www.americanethane.com
About the Nanshan Group
Nanshan Group Co. Ltd. is one of the largest fully private conglomerates in China listed #165 in Top 500 Chinese Enterprises with the annual revenue of over 100 billion RMB and businesses engaged in Aluminum Production, Commercial Airline, Agriculture, Education, Finance, Tourism industries. Nanshan Group invests overseas in Australia, Singapore, USA and other countries. Nanshan Group is one of the largest shareholders of Virgin Atlantic and back in 2011, Nanshan America invested over 1.0 billion USD in an integrated aluminum casting and extrusion facility plant in Lafayette, IN, USA.
Nanshan Group is developing now a new chemical industry economic zone in Shandong Province of China to produce various plastics and derivatives of ethylene and it will start with an ethane-to-ethylene steam cracker with an annual output of 2.0 million metric tons of ethylene. The demand for ethylene is strong in China and the new zone will be home for many new industries and production facilities contributing to the region’s GDP.
