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EIA projects growth in natural gas liquids feedstock consumption

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Hydrocarbon Engineering,

In the US Energy Information Administration’s (EIA) recently-released 'Annual Energy Outlook 2022' (AEO2022) report, the reference case projects growth in total consumption of natural gas liquids (NGLs) as feedstocks in the bulk chemicals industry through 2050. The AEO2022 reference case includes baseline assumptions about technology, policy, and the economy through 2050. Ethane is the most consumed NGL feedstock throughout the projection period, and in the near term, the 'Short-Term Energy Outlook' forecasts that ethane consumption growth will exceed that of all other petroleum products through 2023.

Ethane is converted to ethylene—a key precursor for producing polymers and other chemical products—in a process known as cracking. US ethylene cracking capacity has nearly doubled over the past decade, and the AEO2022 reference case projects this trend will continue. US ethane consumption is projected to reach 3.1 quadrillion Btu (quads) annually in 2050, compared with 1.8 quads in 2021.

Starting in 2032, ethane demand for the production of ethylene exceeds US production of ethane. As a result, US ethane exports (which are projected to peak in 2023 at 470 000 bpd) gradually decline throughout the projection period. Propane and butanes produced in the United States are also used to meet ethylene feedstock demand, further increasing the domestic consumption of those NGLs (and also decreasing their respective export levels).

Naphtha is another feedstock option for producing ethylene. In the reference case, naphtha consumed as a feedstock for ethylene production is projected to remain at a constant level. As US ethane production grew and the price of ethane fell in the 2010s, dedicated ethane crackers were built and some naphtha crackers were modified to accept ethane as a feedstock. These modified crackers can now switch between cracking ethane, other NGLs, and naphtha based on market conditions. In the reference case, these flexible crackers crack only ethane and minor quantities of other NGLs.

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US refinery news North America downstream news