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Total U.S. ethane supply will increase 50% by 2016

Wednesday, December 07, 2011

Petrochemical demand increases crucial to U.S. ethane market balance

The Great NGL Surge!, a joint market study from BENTEK and Turner, Mason & Company, reports that U.S. ethane production is expected to increase 50% or 475 Mb/d by 2016. Texas will account for the majority of total U.S. ethane supply increases, growing 280 Mb/d during that period. Ethane production in PADD I will jump from virtually nothing to nearly 150 Mb/d by 2016 due to growth in the Marcellus, with the majority of that supply expected to be exported to Canada and PADD III. The large increase in ethane production presents an unexpected opportunity for petrochemical producers to build new ethylene production plants in the U.S.

U.S. ethane demand will increase due to feedslate switching, which is already taking place, in addition to expansions, debottlenecks, the restart of idle crackers and new cracker builds. The Great NGL Surge! notes that total demand for ethane (including petrochemical demand and exports) will increase 352 Mb/d over the next five years – which is less than the increase in supply. As a result, the ethane market is forecast to become long starting in 2014 and continuing through the end of the forecast period. This will lead to lower prices, nearing ethane rejection levels in some areas. Nearly all of the increase in ethane demand will occur in PADD III, with 22% demand growth in Texas and 37% growth in Louisiana.

Access the first six pages of The Great NGL Surge! with report conclusions.

BENTEK and Turner, Mason & Company’s The Great NGL Surge! provides a comprehensive five-year analysis of North American NGL markets and extensive projections of supply, demand, transportation and infrastructure for every NGL product, including butane, propane, ethane, petrochemicals and y-grade. In addition, the study analyzes the impact of refinery developments on NGL demand, including shifting crude oil slates on refinery NGL production.

ALSO AVAILABLE FROM BENTEK:

• Geospatial layer package from The Great NGL Surge! – Includes all NGL pipelines, processing plants, fractionators, crackers and gas basins referenced in the report.

• Data package for The Great NGL Surge! – Analyze the datasets behind the report.

To learn more, please contact your BENTEK sales representative, call BENTEK Sales at 303-988-1320, reply to this email or click here.