US Ethane Outlook: Implications for Processors and Ethylene Producers. Presented to the 84 th Annual GPA Convention March 15, 2005. Peter Fasullo En*Vantage, Inc [email protected] Background. Just 2 years ago, US gas processors faced many challenges, especially for ethane.
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Just 2 years ago, US gas processors faced many challenges,
especially for ethane.
Ethane is back!!!
across all processing regions
But how long will it last?
Source: DOE, En*Vantage, Hodson
Both being inversely related to the gas to crude price ratio
Source: Platts, DOE and En*Vantage
Source: Platts & En*Vantage
Source: DOE and En*Vantage
Ethane extraction closely tracks ethane cracking, influenced by the gas to crude price ratio.
The gas to crude price ratio can influence the cracking of ethane versus heavy feedstocks. But what is the relationship between ethylene production and ethane cracking?
Source: Platts, En*Vantage and Hodson
Back in February 2004, we felt that economic conditions going forward would provide a better environment for ethane cracking.
Source: En*Vantage, ICE, DOE
Source: History- CMAI, En*Vantage and Hodson; Est & Forecast - En*Vantage
Data indicate that the processing industry can ramp up ethane extraction to near 780 MBPD, which supports 61 billion lb/yr of ethylene production.
Source: EIA & En*Vantage
La GC and Rockies will be the incremental producers of ethane in the ’05 to ’10 time period.
Source: DOE, En*Vantage
Our study demonstrated how ethylene production along with the gas to crude price ratio can estimate ethane supply & demand and the amount of swing that can be expected.
Demand Side Factors
Gas to Crude Price Ratio
Effective Operating Rate
Composition of Plants
Regional Ethane Production
Regional Extraction Economics
Ethane to Market
Ethane Frac Spread
Supply Side Factors
Conditions should remain favorable for ethane cracking and extraction,
even with moderate ethylene production growth: