Expansion of Petrochemical Consumption and Exports to Increase Production of Ethane

In the USA ethane production, which was constrained by lack of demand and low prices in recent years, is expected to increase at a faster rate than other hydrocarbon gas liquids (HGLs) in 2016 and 2017. Expanded petrochemical and export capacity provides new outlets for supply and allows more ethane to be recovered from raw natural gas Ethane production is expected to increase from 1.1 million barrels per day (b/d) in 2015 to 1.4 million b/d in 2017, accounting for two-thirds of total U.S. hydrocarbon gas liquid (HGL) production growth. Ethane, a key feedstock for petrochemical manufacturing, is recovered from raw natural gas at natural gas processing plants. Over the past five or six years, the amount of ethane contained in US produced raw natural gas has exceeded the capacity to consume and export it. This oversupply kept ethane prices relatively low, hovering at or below the price of natural gas, leading producers to reject the ethane stream by leaving it mixed with the stream that is marketed as pipeline natural gas, which is mostly methane.

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