Local Attorney and CEO of American Ethane Signs $26 Billion Gas Deal with China As Trump Watches
NEW ORLEANS, LA. – American Ethane Company (AEC), an international exporter of liquid ethane, will enter into a $26 billion contract with the Nanshan Group, one of China’s largest enterprise companies, at a signing ceremony in Beijing on Thursday to be witnessed by U.S. President Donald Trump and Chinese President Xi Jinping.
In June 2017, AEC negotiated the 20-year, $26 billion binding agreement to deliver ethane gas from a terminal on the Texas Gulf Coast to a new ethylene plant in China to be built by the Nanshan Group. The deal is one of the largest at the November 2017 trade summit.
Said American Ethane Chief Executive Officer John Houghtaling, “American Ethane is greatly honored to receive the summit invitation from President Donald Trump and President Xi Jinping. The economic value of the gas sale will exceed $26 billion with several billion dollars more of infrastructure being built in the U.S. and China. This deal will create thousands of jobs in both countries. As one of the larger deals of this Summit, the agreement meets the U.S. goal of reducing the trade deficit, China’s goal of creating for the first-time ethane-to-ethylene production in China - which is an efficient and green industry - and the mutual goal of providing a long-term economic link between our two countries.”
American Ethane is developing the largest ethane export terminal on the Gulf Coast with annual output of 10 million metric tons per year of liquefied ethane gas (LEG). AEC commissioned and completed a full FEED study in May 2015. Construction of the terminal will be coordinated with downstream infrastructure in China and is expected to start in early 2018 with completion by 2020.
Under terms of the agreement, Nanshan has signed a binding take-or-pay contract to purchase ethane for 20 years. Added Houghtaling, “This is a win-win for the U.S. and China. The Chinese market has realized the benefit of linking a gas purchase to gas prices within the U.S. as opposed to purchasing gas in other parts of the world tied to volatile future oil prices.”
Houghtaling is managing partner and majority owner of Metairie-based Gauthier, Houghtaling LLP, a law firm with a 42-year legacy that paved the way to the $358 billion U.S. tobacco settlement in 1998, and won an additional $4 billion in settlements and verdicts. A 2015 episode of the CNN-documentary Inside Man, details the story of Houghtaling's transition from attorney to oil and gas investor. Click here to view.
Louisiana Senators John Kennedy and Bill Cassidy submitted the agreement between the two companies to be highlighted at the U.S./China trade summit, which is part of President Trump’s five nation, 12-day tour of Asia.