US-listed handysize liquefied gas carrier owner and operator Navigator Holdings (Navigator Gas) has revealed the completion of the expansion of its existing ethylene export terminal joint venture owned 50/50 by Navigator and Enterprise Products Partners L.P. at Morgan’s Point, Houston.
To remind, Navigator Holdings owns a 50% share, through the joint venture, in an ethylene export marine terminal at Morgan’s Point, Texas on the Houston Ship Channel, USA.
Navigator Gas also announced an agreement to acquire three handysize ethylene carriers for a total purchase price of $83.9m, complementing the increased export capacity from the export terminal joint venture.
Navigator Holdings said the export terminal joint venture expansion project was completed on time in late-December 2024 and within budget.
“Going forward, the flex train is expected to increase ethylene export capacity at Morgan’s Point by at least 550,000 tons to 1.55 million tons per year starting in 2025, and potentially up to a total of 3.2 million tons per year in the coming years,” the company’s statement reads.
Furthermore, the expansion project is anticipated to triple the current instantaneous ethylene refrigeration capacity at Morgan’s Point from 125 tons per hour to 375 tons per hour.
Additionally, the joint venture has signed an increased and extended offtake agreement with its largest offtaker, as Navigator Holdings said, with the additional volumes starting in the first quarter of 2025.
To further support the expansion project by increasing Navigator Gas’ fleet of ethylene capable vessels, the company has also entered into agreements with an unrelated third party to acquire three German-built 17,000 cubic meter capacity vessels.
The delivery of the vessels is expected to take place between February and May 2025, at the latest. The vessels are anticipated to operate in the spot market upon, or soon after, delivery.
Navigator Holdings said it does not intend to issue any new capital but plans to finance the acquisitions with a combination of cash on hand and new debt.
The deal is subject to customary closing conditions and following its completion, Navigator Gas will own and operate a fleet of 59 vessels, 28 of which will be ethylene and ethane capable.
Mads Peter Zacho, CEO of Navigator Gas, said: “Future demand for competitively priced US ethane and ethylene is likely to continue its upward trajectory in the coming years.
“The ethylene export terminal expansion, and the addition of three handysize ethylene carriers to our fleet, provides us with key capabilities and infrastructure to meet that growing demand.
“With the most recent offtake agreement set to boost throughput in the near-term, together with the additional vessels, we expect our investments to be accretive to earnings in 2025 and beyond.”
