Enterprise Products Partners LP (NYSE: EPD) and Navigator Holdings Ltd. (NYSE: NVGS) said Jan. 31 they have entered a 50/50 joint venture to build a new ethylene export facility along the U.S. Gulf Coast that will have the capacity to export about 1 million tons of ethylene per year.

Refrigerated storage for 30,000 tons of ethylene will be constructed onsite and will provide the capability to load ethylene at rates of 1,000 tons per hour. The facilities are expected to be in service by first-quarter 2020. The project is supported by long-term contracts with anchor customers that include U.S. ethylene producer Flint Hills Resources and a major Japanese trading company, according to the joint press release.

“This new ethylene export terminal will support the growing production of ethylene on the U.S. Gulf Coast by providing access to international markets,” A.J. “Jim” Teague, CEO of Enterprise’s general partner, said in a statement. “By 2021, the petrochemical industry is expected to expand aggregate ethylene production capacity in Texas and Louisiana by nearly 50% to approximately 90 billion pounds per year. The resulting rapid growth in the supply of U.S. ethylene, combined with increased demand from international markets, like Asia, creates an ideal scenario in which markets abroad are able to diversify their supply by accessing cost-advantaged feedstocks made possible by the shale revolution in the United States. This export terminal will also offer diversification opportunities for domestic petrochemical producers who will not have to rely solely on the export market for derivatives like polyethylene. We are very pleased to work with Navigator Gas in efforts to commercialize an industry-leading ethylene marine export terminal that offers unsurpassed connectivity to ethylene producers and pipeline and storage infrastructure.”

David Butters, CEO of Navigator Gas, said in a statement: “The strong, broad interest shown by prospective terminal customers during the initial marketing phase has reinforced our conviction on the critical need for an ethylene export terminal. It is clear that domestic producers value the opportunity to access global markets and international consumers consider the U.S. as a reliable and affordable source of ethylene to fuel their petrochemical manufacturing in Europe and the Far East. We are delighted to work with Enterprise on this project that promises to meet the needs of our customers and enables us to provide the seaborne transportation of the ethylene from producer to customer.”

Enterprise is also developing a high-capacity ethylene salt dome storage facility at its complex in Mont Belvieu, Texas. This storage facility will have a capacity of about 600 million pounds with an injection/withdrawal rate of 420,000 pounds per hour. The storage facility is expected to begin service in first-quarter 2019 and will be designed to enable connections to the eight ethylene pipelines within a half-mile of the Enterprise ethylene storage system. In addition, Enterprise is building a new ethylene pipeline from Mont Belvieu to Bayport, Texas, which is scheduled to begin service in 2020.

The location and final investment decisions for the terminal are subject to reaching acceptable arrangements with local taxing authorities.