By Arathy Somasekhar and Georgina McCartney
HOUSTON (Reuters) -Enterprise Products Partners said on Wednesday it received notice that the U.S. Commerce Department intends to deny its requests to export three proposed cargoes of ethane, totaling around 2.2 million barrels, to China.
The U.S. and China are locked in an ongoing trade war after U.S. President Donald Trump imposed sweeping tariffs in early April.
Pipeline and terminal operator Enterprise said last week that its ethane and butane exports could be hurt by a Department of Commerce requirement that it apply for a license to export to China. The company is one of the top U.S. handlers of ethane and butane through its port terminals.
The Bureau of Industry and Security, an agency of the Department of Commerce, informed Enterprise in a letter two weeks ago that exports of ethane and butane pose an unacceptable risk of military end-use in China, according to a company filing.
Enterprise said it has up to twenty days to respond to the BIS’s notice about the denied export cargoes with any comments or rebuttals. Unless the company is advised otherwise by the BIS by the 45th day after the original notification, the denials will become final.
The BIS did not immediately respond to a request for comment.
The U.S. last week ordered a broad swathe of companies to stop shipping goods, including ethane and butane, to China without a license and revoked licenses already granted to certain suppliers.
Ethane and butane, liquids separated from natural gas, are used to make plastics and chemicals and also for heating and cooking.
Chinese petrochemical firms use ethane as a feedstock because it is a cheaper alternative than naphtha, while U.S. oil and gas producers need China to buy their natural gas liquids as domestic supply exceeds demand.
(Reporting by Arathy Somasekhar and Georgina McCartney in Houston; Editing by Nia Williams)
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