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(Bloomberg) — The Trump administration has slightly eased recent export limits on a petroleum gas that’s used to make plastics — a shift that represents a modest pullback on curbs used as leverage in trade negotiations with China.
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Under the change, Enterprise Products Partners LP and Energy Transfer LP are being allowed to load that gas, known as ethane, onto tankers and transport it to Chinese ports. However, they are still barred from unloading that cargo for use by Chinese entities, said people familiar with the matter who asked not to be named.
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The US Bureau of Industry and Security notified companies of the change, the people said, following weeks of lobbying by oil industry advocates who told administration officials the restrictions were inflicting more pain on the US than China. US inventories of ethane — essentially a byproduct of oil production in West Texas — were climbing in the meantime.
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As of late last week, INEOS Group Holdings SA had one tanker full of ethane waiting to ship and Enterprise Products Partners had three to four cargo ships stuck in limbo, according to a person familiar with the matter.
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Representatives of Enterprise Products, Energy Transfer and the Commerce Department, which oversees BIS, did not immediately respond to requests for comment on the shift, first reported by Reuters.
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The Trump administration’s move could effectively buy time for the US to secure more certainty around the export of rare earth materials from China, a key element of the trade framework Washington reached with Beijing earlier this month. Vessels carrying ethane from Houston would generally take about 30 days to reach Chinese ports.
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The administration had restricted exports of chip software, jet engines and ethane ahead of the two nations’ trade talks earlier this month, in a move seen as building leverage for concessions around China’s rare earth exports.
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—With assistance from Ruth Liao and Emma Sanchez.
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