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US ethane production to grow

Published by , Senior Editor
Hydrocarbon Engineering,

US production of ethane, a hydrocarbon gas liquid (HGL) produced primarily in natural gas processing plants, has grown rapidly since 2013. Production has nearly doubled from 0.95 million bpd in 1Q13 to 1.85 million bpd in 1Q21.

In its ‘Short-Term Energy Outlook’, the US Energy Information Administration (EIA) forecast ethane production to continue to grow in response to a growing US petrochemical industry and rising ethane exports to petrochemical plants around the world, reaching 2.6 million bpd by 4Q22.

US demand for ethane has been growing steadily as a result of capacity expansions of ethylene crackers in the petrochemical industry, which use ethane as a feedstock. Ethylene is a basic chemical used to produce plastics and resins. The EIA estimates that the US petrochemical industry expanded its capacity to produce ethylene from almost 27 million tpy in 1Q13 (when the first capacity additions to ethylene crackers in over a decade came online) to almost 40 million tpy in 2020. This growth in ethylene capacity caused domestic demand for ethane as a feedstock to grow from 960 000 bpd in 1Q13 to 1.83 million bpd in the 4Q20.

Ethane consumption declined in 1Q21 (dropping to 1.51 million bpd) because of a mid-February winter storm that shuttered most petrochemical crackers along the Gulf Coast. However, by 2Q22, the EIA expects three new crackers (Baystar and Gulf Coast Growth Ventures in Texas and Shell Chemical Appalachia in Pennsylvania) will increase US capacity to produce ethylene by another 11%, to 43.5 million tpy. These additions to ethylene capacity are expected to cause US ethane demand for feedstock to grow to 2.1 million bpd by 4Q22 from 1.5 million bpd in 1Q21.

The EIA expects international demand for US ethane exports to also grow as more petrochemical crackers around the world are completed. US exports of ethane began in 2014, when the first export pipelines were completed, shipping ethane to petrochemical plants in Canada. Since then, more export capacity had been added, including three marine export terminals that ship cryogenically cooled ethane overseas in specially built tankers. The EIA expects ethane exports to grow more than 50%, from 300 000 bpd in 1Q21 to 460 000 bpd in 4Q22. The EIA expects US exports to China to grow the fastest once two large petrochemical crackers in China reach full capacity in early 2022.

Principal contributor: Warren Wilczewski.

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