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Energy Transfer (NYSE:ET) disclosed Wednesday it received a letter from the U.S. Commerce Department requiring a license to export ethane to China, and that it will file for an emergency authorization to continue exporting.
Another ethane exporter, Enterprise Products Partners (EPD), said earlier on Wednesday it received notice from the department denying its emergency requests to export three proposed cargoes of ethane totaling 2.2M barrels to China.
Enterprise Products (EPD) had filed the emergency authorization requests after it received a letter requiring license authorization on May 23; Energy Transfer (NYSE:ET) said it obtained its letter on June 3.
The letters said exports of ethane pose an unacceptable risk of military end-use in China, according to filings from both companies.
The denial of Enterprise Products’ (EPD) emergency requests calls into question whether it is just a short-term disruption, Vortexa’s head of Americas analysis Samantha Hartke told Reuters.
“Near-term cargo reshuffles or resales could be necessary, as would a greater dependence on domestic storage,” Hartke said, adding that short positions in ethane had mounted on Wednesday.