Capital: EMG backing American Ethane’s massive export project


[Context: On March 19, The Energy & Minerals Group disclosed that it had signed a supply and co-development agreement with American Ethane Co. to build a 10 million ton per year ethane export facility on the US Gulf Coast. The project is supported by three 20-year commitments to supply ethylene crackers in China. Further details and related links are below.]


The Energy & Minerals Group and American Ethane Announce Execution of Exclusive Arrangement

HOUSTON–March 19, 2018–(BUSINESS WIRE)–On February 22, 2018, The Energy & Minerals Group (“EMG”) signed an exclusive supply and co-development agreement with American Ethane Co. to provide the remaining capital investment into American Ethane’s development of a 10 million ton per year ethane export terminal project on the U.S. Gulf Coast.

Under the agreement, EMG will create a portfolio company to source and supply to American Ethane up to 480,000 barrels per day from various U.S. midstream companies and producers. The agreement contemplates that EMG will construct new export facilities or partner with other operators to expand existing export facilities and associated midstream supply infrastructure.

The anticipated supply and financial investment from EMG will support three conditionally binding 20-year agreements that American Ethane has executed to supply 7.2 million tons per year of ethane to three ethane-to-ethylene cracker projects in China, the first of which was signed by American Ethane and Nanshan Group on November 9, 2017, in the presence of President Donald Trump and President Xi Jinping. American Ethane anticipates entering into an additional ethane supply agreement in the future.

The Energy & Minerals Group

EMG is the management company for a series of specialized private equity funds. The firm was founded by John Raymond (majority owner and CEO) and John Calvert in 2006. EMG focuses on investing across various facets of the global natural resource industry including the upstream and midstream segments of the energy complex. EMG has approximately $15.8 billion of regulatory assets under management and approximately $10.5 billion in commitments have been allocated across the energy sector since inception.

American Ethane Co.

American Ethane Company, a Texas company, has been in development of the largest ethane export terminal on the US Gulf Coast with annual output of 10,0 million metric tonnes per annum of Liquefied Ethane Gas (LEG). A Full FEED in 2015 by two alternative bidders – AMEC FW (GE Technology) and S&P (Black & Veach technology). Since 2015, American Ethane has been in development of the marketed ethane in the Asian markets for power generation in conjunction with GE, and has signed conditionally binding contracts for the export of 7.2 million tons of ethane per year to three cracker projects in China.

Related Links