Exciting Times for Ethane

There seems no end to the rippling effects of the unconventional oil and gas revolution, which, over the past decade, has boosted oil and gas production in the U.S. by nearly 60 percent. This hydrocarbon ocean reversed the declining energy fortunes of the United States, thwarted the geopolitical aims of some powerful leading gas producers, and reshaped the status quo in the energy sector. Over the past eight years, it has also changed the world of petrochemicals, and now has manufacturers around the globe scrambling to take advantage of what appears to be a virtually endless supply of low cost U.S. ethane.

In 2017, for example, Dow completed a USD$6 billion expansion in Freeport, Texas, that included new ethylene and plastics plants, and announced a further USD$4 billion investment in new plants in Michigan, Texas and Europe. Not long after, Exxon announced selection of a site near Corpus Christi, Texas, for a USD$9.3 billion petrochemical complex to be built jointly with Saudi Basic Industries Corporation. Planned for completion in 2021, the proposed facility would be the largest of its kind in the world, producing 1.8 million tonnes of ethylene per year. This is just one part of a 10-year, USD$20-billion investment that the energy giant plans for the U.S. Gulf in chemical, refining, lubricant and liquefied natural gas facilities, which, the company says, will create 12,000 permanent jobs.

Meanwhile, numerous crackers and plastics plants have been proposed in China to capture the promise of U.S. ethane, leading to projections that a further 50 ethane carriers could be ordered over the next few years. However the speculations play out, it’s clearly no guess that the U.S. ethane revolution is only just beginning.