A Home for Marcellus Ethane

Due to a lack of regional market demand, producers in the Marcellus Shale may be forced to curtain natural gas production until a viable solution to dispose of excess ethane is determined. 

When natural gas liquids (NGLs) are fractionated, each component of natural gas including ethane, propane and butane is extracted and isolated. As a result of the Marcellus Shale, production in the Northeast is booming. But with essentially no market for ethane in that region and no shipping options available, producers are unsure about what to do with the surplus amount of ethane that is accumulating. With no way to dispose of the ethane, producers are faced with the unattractive prospect of shutting-in production. 

Several companies have proposed projects to address this problem, including a pipeline to the Gulf Coast to reach the majority of North America’s petrochemical manufacturing segment, waterborne shipment options to the Gulf Coast or building large scale blending operations in the Northeast. 

A Home for Marcellus Ethane assesses the magnitude of the ethane problem, examines each of the proposed projects and suggests a framework for assessing the viability of these options.