According to the US Energy Information Administration (EIA), between 2014 and 2018 US petrochemical capacity expansion projects are projected to increase domestic demand for ethane by nearly 600 000 bpd and propane by nearly 200 000 bpd. This growing demand is in response to growing domestic hydrocarbon gas liquids (HGL) supply and favourable petrochemical feedstock prices in the US relative to the international market.
The petrochemical industry uses hydrocarbon feedstocks such as ethane and propane to create plastics, fivers, resins, and a wide range of other consumer and industrial materials. Ethylene cracking plants most commonly process either ethane or naphtha to produce ethylene, an important compound used in the manufacture of plastics and other industrial materials. Although naphtha, a hydrocarbon that contains mostly molecules with 5 – 12 carbon atoms, is one of the lighter components produced by refining crude oil, it is a much heavier feedstock than ethane or propane, which respectively consist of hydrocarbon molecules with 2 or 3 carbon atoms. All ethylene projects currently planned for the US are designed to consume light feed, predominantly ethane, for the production of ethylene.
Most announcements of capacity expansions, feedstock changes, or new plant construction were made between early 2011 and mid-2013, when strong growth in natural gas production from shale provided the US with a significant increase in the availability of ethane. Decreasing ethane prices during this period increased the cracking spread (the margin received from processing ethane into ethylene), spurring the rise in new investment. More recently, ethylene-naphtha cracking spreads have also risen in response to decreased naphtha prices.
The recent rise in US natural gas production has also increased the supply of propane, which in turn decreased US propane prices and increased propylene-propane price spreads in the US. As with ethylene cracking, this has led to plans to increase capacity for processing propane into propylene at propane dehydrogenation (PDH) plants.
Ethylene crackers are expensive and complex projects that take many years to develop. Most of the ethylene cracker projects currently being developed will not come online until 2017 or 2018, including six large scale projects announced in 2011 and 2012. Four projects (from Dow, ExxonMobil, Chevron Phillips, and OxyChem/Merichem) are already under construction, and two projects (from Formosa and Sasol) have received permitting approval and commitments from investors. Together with capacity expansions at existing facilities, these six new facilities are expected to increase US ethylene production by 40%, to a total of more than 37 million t, more than one fifth of current global ethylene production capacity (approximately 150 million t).
Currently, only one PDH plant is in operation in the US: the PetroLogistics plant in Houston, Texas. This plant is estimated to consume 30 000 bpd of propane. However, there are six new PDH projects at various stages of development that, if completed, could increase US petrochemical sector propane demand by an additional 190 000 bpd by the end of 2018.
Adapted from a press release by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/29012015/growing-us-hgl-production-144/