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US ethane demand increased by 9% in 2022

Published by , Senior Editor
Hydrocarbon Engineering,

In 2022, US ethane demand increased by approximately 9%, or almost 0.2 million bpd, according to the US Energy Information Administration’s (EIA) ‘Petroleum Supply Monthly’.

US production and consumption of ethane has grown since 2010, along with the build-out of US petrochemical capacity. US ethane product supplied, a proxy for ethane consumption, averaged just under 2 million bpd in 2022, reaching a peak of almost 2.2 million bpd in July.

Most US petrochemical cracking capacity built after 2012 can use only ethane as a feedstock, meaning high ethane prices can reduce ethylene production. Ethane prices nearly doubled during the first six months of 2022, from approximately US¢37/gal. (gal) to US¢64/gal., according to Bloomberg Finance, L.P. In 3Q22, new ethylene crackers came online in Port Arthur, Texas, and Monaca, Pennsylvania, adding a combined 156 000 bpd of domestic ethane cracking capacity. These capacity additions follow a 108 000 bpd increase in ethane cracking capacity in 2021.

Petrochemical plants in the US and internationally use ethane in steam crackers to produce ethylene, a precursor chemical for manufacturing many plastics and resins. Similar to the expansion of US ethane cracking capacity, international demand for US ethane as a petrochemical feedstock has also been increasing over the past decade, leading to higher exports. Annual US ethane exports reached close to 450 000 bpd in 2022, up 22% from 2021. US ethane exports to China increased 50% from 2021 to a record-high average of 157 000 bpd in 2022. Ethane exports to China increased because an additional 75 000 bpd of ethane-fed cracker capacity came online in China. The construction of new ethane tankers has also helped make higher US ethane exports possible.

In the EIA’s ‘Short-Term Energy Outlook’ (STEO), it forecasts that domestic ethane consumption will remain similar to 2022 because it does not expect any new US petrochemical cracker plants to be completed before the end of the forecast period. The EIA expects ethane consumption to average 2.1 million bpd in 2023 and 2024, and forecasts ethane exports will average 500 000 bpd by December 2024, up 50 000 bpd compared with the 2022 average. More petrochemical capacity coming online abroad and export capacity additions will drive these increases.

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