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NGLs Week

NGLs Week Newsletter  

NGLs Week is PetroChem Wire's comprehensive summary of price trends, upstream and downstream costs, operations news and supply/demand forecasts. The report contains everything you'll need to understand what's happening in the NGL markets.

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Ingleside ethane cracker first in wave of new, robust ethane demand sources

HOUSTON, March 14, 2017 (PCW) --In late February, the new, joint-venture Oxy/Mexichem ethane cracker went into service at Ingleside, Texas. With an ethane consumption rate of about 33,000 b/d, it is the first in an ongoing wave of new cracker demand for the lightest purity product that will result in consumption rates increasing nearly 62% from last year’s levels, according to PetroChem Wire estimates (see below).

This year will also see the start-up of Dow’s 3.3 billion lbs/yr Freeport ethylene plant, ExxonMobil Baytown (3.3 billion lbs/yr) unit and Indorama’s 968 million lbs/yr brownfield facility at Lake Charles, which should cumulatively up ethane demand by 208,000 b/d. In 2018, CP Chem’s 3.3 billion lbs/yr Cedar Bayou, Formosa’s 2.6 billion lbs/yr Point Comfort and Shintech’s 1.105 billion lbs/yr at Plaquemine units could add another 190,000 b/d of ethane demand.

In 2019, Lotte Chemical/Westlake, Sasol and Total’s new ethylene plants will see another 205,000 b/d of ethane being consumed. In the 2020 and beyond time frame, Shell’s Pennsylvania plant, Marubeni/PTTGC and the Exxon/Sabic facilities could add another 245,000 b/d of ethane demand. Ethane prices have leapt at the prospect of this burst in demand. From historical lows of sub-20 cpg pricing, spot levels are now typically averaging between 21-24 cpg.

Ethane’s forward curve, aside from brief periods of backwardation – when supply likely outpaces demand given the slow ramp-ups of such plants to full operational rates --- shows a steep contango through early 2018 (see Forward Curves, page 4). Effectively, ethane values increase about 45% through the end of the decade, largely on the back of this whopping ethylene production uptick.-- Samantha Hartke

PetroChem Wire actively monitors existing and upcoming ethylene plants in North America. PCW’s Chemical Plants Database contains accurate and up-to-date information on production rates and start-up time frames, among others, of monomers and polymers. For more information about PCW’s Chemical Plants Database or a free sample, click HERE.

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