Ethane production in the United States to grow, alongside increased domestic consumption and exports – Today in Energy
US production of ethane, a liquid hydrocarbon gas (HGL) produced primarily in natural gas processing plants, has grown rapidly since 2013. Production has nearly doubled to 0.95 million barrels per day (b / j) in the first quarter of 2013 to 1.85 million b / d in the first quarter of 2021. In our Short-term energy outlook, we expect ethane production to continue to grow in response to the growth of the US petrochemical industry and increased exports of ethane to petrochemical plants around the world, reaching 2.6 million b / d as of fourth quarter 2022.
The US demand for ethane has continued to grow due to the expansion of the capacity of ethylene crackers in the petrochemical industry, which use ethane as a feedstock. Ethylene is a basic chemical used to produce plastics and resins. We believe that the United States expanding petrochemical industry its ability to produce ethylene of nearly 27 million metric tonnes per year (mt / year) in the first quarter of 2013 (when the first capacity additions to ethylene crackers in more than a decade were put into service) to nearly 40 million mt / year in 2020. This growth in ethylene capacity increased the domestic demand for ethane as a feedstock from 960,000 b / d in the first quarter of 2013 to 1.83 million b / d in the fourth quarter of 2020.
Ethane consumption declined in the first quarter of 2021 (to 1.51 million bpd) due to a winter storm in mid-February that shut down most petrochemical crackers along the coast of the Gulf. However, by the second quarter of 2022, we expect three new crackers—Baystar and Growth ventures on the Gulf Coast in Texas and Shell Chemical Appalachia in Pennsylvania – will increase the capacity of the United States to produce ethylene by an additional 11%, to 43.5 million tonnes / year. We expect these additions to ethylene capacity will increase U.S. demand for ethane for raw materials to 2.1 million bbl / d in the fourth quarter of 2022, from 1.5 million bbl / d in the first quarter. from 2021.
Source: US Energy Information Administration, based on documents filed by companies and the specialized press
We expect international demand for U.S. ethane exports to also increase as more petrochemical crackers around the world are completed. U.S. ethane exports 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. We expect ethane exports to grow by more than 50%, from 300,000 b / d in the first quarter of 2021 to 460,000 b / d in the fourth quarter of 2022. We expect that US exports to China will increase. faster once two large petrochemical crackers in China reach full capacity in early 2022.
Main contributor: Warren Wilczewski