Ethane, LPG to trump naphtha as preferred

ethylene feedstocks
Hydrocarbon Processing News 09.20.2013

The shift in the global ethylene feedstock slate will be driven by ethane-
based capacity in the US and the Middle East, and low natural gas prices
in the US and Saudi Arabia.

Nearly half of the world’s ethylene will be produced from ethane and liquefied
petroleum gas (LPG) by 2023, mostly at the expense of naphtha.

These findings were made available Friday in ESAI Energy’s new study,
entitled “A Perfect Storm: Global Natural Gas Liquids 2013-2023”.

The shift in the global ethylene feedstock slate is driven by ethane-based

capacity in the US and the Middle East, and low natural gas prices in the US
and Saudi Arabia.

Global ethylene production will expand from 127 million tpy in 2012 to 174
million tpy by 2023, an increase of 47 million tpy. Of this growth, 24 million tons
of production will be ethane and LPG based, and 15 million tons will be
naphtha-based production.

The feedstock shift is most dramatic in North America, where prolific shale gas
production yields cheap ethane in the US and is driving
a petrochemical resurgence. By 2023, total planned ethane-based ethylene
capacity additions amount to an impressive 11 million tpy.

“Increased ethane use in North America will mark the return of that region as a
highly competitive ethylene derivatives producer and exporter”, said Vivek
Mathur of ESAI Energy.

By 2023, North American exports of key ethylene derivatives could grow to over
10 million tpy, which would double today’s levels. Exports will target not
only Latin America but also Europe and Asia, competing directly with Middle
Eastern exporters.

“The increased substitution of naphtha by ethane, however, will also impact the
supply of other petrochemical by-products”, said Mathur. “We are looking at
lower production of relatively higher value petrochemicals like propylene and
butadiene”.
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The convergence of rising NGL supply and rising petrochemical demand has created a perfect storm in the
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