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EPD Faces Export Setback as US Blocks China-Bound Ethane Cargoes
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Key Takeaways
EPD was notified that BIS intends to deny licenses for three ethane cargoes totaling 2.2M barrels.
New BIS rules now require a license to export high-purity ethane to China, impacting shipping plans.
In 2024, 37% of EPD ethane exports went to China, a key market now facing uncertainty.
Enterprise Products Partners L.P. (EPD - Free Report) disclosed that the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) has issued a notice of intent to deny emergency license applications for three ethane cargoes to China, totaling approximately 2.2 million barrels. The company received the notification on June 3, 2025, and has up to 20 days to respond. If no further guidance is given by BIS within 45 days, the denial will become final without additional notice.
New Rules Complicate Ethane Trade With China
The proposed export denials follow new BIS regulations communicated to Enterprise on May 23, 2025, requiring a license to export “ethane and butane, saturated, having a purity of 95% or more by volume” to China. While the requirement for butane was later rescinded, the ethane restriction remains in place and has already begun to affect Enterprise’s shipping plans.
China: A Key Market for EPD’s Ethane Exports
The restrictions target a significant trade flow. According to the U.S. Energy Information Administration, the United States exported about 492,000 barrels per day (BPD) of ethane in 2024, with China accounting for nearly 227,000 BPD. Enterprise’s Houston Ship Channel terminal alone handled 213,000 BPD of ethane in 2024, with approximately 85,000 BPD bound for China. That figure represented 37% of total U.S. ethane shipments to China.
So far in 2025, U.S. ethane exports to China have risen to about 290,000 BPD, underscoring the growing importance of the Chinese market. The BIS’ denial, if finalized, could significantly affect Enterprise’s exports from its Morgan Point facility and broader U.S. ethane trade with China.
What’s at Stake for EPD?
While the exact financial implications remain uncertain, the notice highlights the growing geopolitical scrutiny of U.S. energy exports to China. For Enterprise, a key midstream player with over 50,000 miles of pipelines and more than 300 million barrels of liquid storage capacity, the move adds regulatory uncertainty to its otherwise steady ethane export business.
Enterprise has not yet disclosed whether it will challenge the BIS decision or adjust its export strategy, but any sustained disruption could prompt broader implications for U.S. ethane exporters navigating shifting global trade policies.
Subsea 7 helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2025 EPS is pegged at $1.31. The company has a Value Score of A.
Energy Transfer is poised to benefit from long-term fee-based commitments. It is also focused on expanding operations through organic and inorganic initiatives. The firm is looking for solutions to meet growing energy demands from additional demand centers through its pipeline network. Energy Transfer’s systematic investments should boost its total fractionation capacity at Mont Belvieu and raise its top line.
The Zacks Consensus Estimate for ET’s 2025 EPS is pegged at $1.44. The company has a Value Score of A.
RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to shareholders through consistent dividends and share buybacks. RPC’s current dividend yield is higher than that of the composite stocks in the industry. Its new Tier IV dual-fuel fleet has boosted profits, with plans to further expand high-efficiency equipment to enhance operational capabilities.
The Zacks Consensus Estimate for RES’ 2025 EPS is pegged at 38 cents. The company has a Value Score of A.
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EPD Faces Export Setback as US Blocks China-Bound Ethane Cargoes
Key Takeaways
Enterprise Products Partners L.P. (EPD - Free Report) disclosed that the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) has issued a notice of intent to deny emergency license applications for three ethane cargoes to China, totaling approximately 2.2 million barrels. The company received the notification on June 3, 2025, and has up to 20 days to respond. If no further guidance is given by BIS within 45 days, the denial will become final without additional notice.
New Rules Complicate Ethane Trade With China
The proposed export denials follow new BIS regulations communicated to Enterprise on May 23, 2025, requiring a license to export “ethane and butane, saturated, having a purity of 95% or more by volume” to China. While the requirement for butane was later rescinded, the ethane restriction remains in place and has already begun to affect Enterprise’s shipping plans.
China: A Key Market for EPD’s Ethane Exports
The restrictions target a significant trade flow. According to the U.S. Energy Information Administration, the United States exported about 492,000 barrels per day (BPD) of ethane in 2024, with China accounting for nearly 227,000 BPD. Enterprise’s Houston Ship Channel terminal alone handled 213,000 BPD of ethane in 2024, with approximately 85,000 BPD bound for China. That figure represented 37% of total U.S. ethane shipments to China.
So far in 2025, U.S. ethane exports to China have risen to about 290,000 BPD, underscoring the growing importance of the Chinese market. The BIS’ denial, if finalized, could significantly affect Enterprise’s exports from its Morgan Point facility and broader U.S. ethane trade with China.
What’s at Stake for EPD?
While the exact financial implications remain uncertain, the notice highlights the growing geopolitical scrutiny of U.S. energy exports to China. For Enterprise, a key midstream player with over 50,000 miles of pipelines and more than 300 million barrels of liquid storage capacity, the move adds regulatory uncertainty to its otherwise steady ethane export business.
Enterprise has not yet disclosed whether it will challenge the BIS decision or adjust its export strategy, but any sustained disruption could prompt broader implications for U.S. ethane exporters navigating shifting global trade policies.
EPD’s Zacks Rank & Key Picks
EPD currently carries a Zack Rank #4 (Sell).
Investors interested in the energy sector may look at some better-ranked stocks like Subsea 7 S.A. (SUBCY - Free Report) , Energy Transfer LP (ET - Free Report) and RPC Inc. (RES - Free Report) . Subsea 7 presently sports a Zacks Rank #1 (Strong Buy), while Energy Transfer and RPC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2025 EPS is pegged at $1.31. The company has a Value Score of A.
Energy Transfer is poised to benefit from long-term fee-based commitments. It is also focused on expanding operations through organic and inorganic initiatives. The firm is looking for solutions to meet growing energy demands from additional demand centers through its pipeline network. Energy Transfer’s systematic investments should boost its total fractionation capacity at Mont Belvieu and raise its top line.
The Zacks Consensus Estimate for ET’s 2025 EPS is pegged at $1.44. The company has a Value Score of A.
RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to shareholders through consistent dividends and share buybacks. RPC’s current dividend yield is higher than that of the composite stocks in the industry. Its new Tier IV dual-fuel fleet has boosted profits, with plans to further expand high-efficiency equipment to enhance operational capabilities.
The Zacks Consensus Estimate for RES’ 2025 EPS is pegged at 38 cents. The company has a Value Score of A.