The U.S. Department of Commerce has sent formal letters to Enterprise Products and Energy Transfer, notifying the companies that while they may load ethane onto vessels bound for China, they are prohibited from unloading the product at any Chinese port without prior authorization.
The letters follow previous notifications that imposed a license requirement on ethane exports to China, according to a person familiar with the matter and a copy of one such letter reviewed by Reuters.
“This letter authorizes Enterprise Products to load vessels with ethane, transport, and anchor in foreign ports, even if to a party located in China,” the letter states. “However, Enterprise Products may not complete such export… to a party that is located in China without further BIS authorization.”
According to the source, companies are unlikely to risk sending the shipments without authorization due to the possibility of steep penalties, which could be twice the value of the ethane if the product is offloaded in China.
The move may help ease port congestion near U.S. energy hubs like Houston, where vessels have been stalled under the export restrictions.
Neither Enterprise Products, Energy Transfer, nor the Department of Commerce responded immediately to requests for comment.
