US petchems consumed record amounts of NGLs in 2016

US petchems consumed record amounts of NGLs in 2016

The US petrochemical industry consumed 1.6m bbl/day of natural gas liquids (NGLs) in 2016, hitting a new record, midstream company Enterprise Products said on Tuesday.

The US relies predominantly on gas-based feedstock like ethane and propane. Demand should increase further this year as companies start up new crackers.

Enterprise expects US ethylene cracking capacity will increase by 40% by the end of the decade, according to slides it presented at the Barclays MLP Corporate Access Days event.

Already, Occidental Chemical (OxyChem) and Mexichem started up their new joint-venture cracker in Ingleside, Texas. The cracker has a capacity of 1.2bn lb/year (544,000 tonnes/year).

Demand for US NGLs will also extend beyond the country’s borders. Enterprise and other companies have started exporting ethane and liquefied petroleum gas (LPG).

The US is now the world’s largest exporter of LPG, and shipments reached a record 877,000 bbl/day in 2016, Enterprise said.

Looking ahead, Enterprise still expects the US Gulf Coast will be short of NGLs because of increased demand from new plants. As a result, Enterprise expects prices to rise before NGL suppliers begin shipping the material from farther away.

The map below from Enterprise summarises its outlook for future NGL demand.

Enterprise itself could expand its ethane pipeline that connects NGL supplies from the northeastern US to its fractionation hub in Mont Belvieu, Texas. That pipeline is called the Appalachia to Texas Express (ATEX).

Enterprise can expand the capacity to 265,000 bbl/day from its current 125,000 bbl/day, but that would require additional long-term agreements, the company said. Moreover, the project would take 18 months.

Enterprise could also convert the idled Centennial pipeline from refined products to NGLs, it said. Centennial connects Beaumont, Texas, to Bourbon, Illinois. It is owned equally by Marathon Petroleum and Enterprise.

If the companies decide to convert the pipeline, the project would also require some new pipelines, Enterprise said. It would take 18-24 months, and it would connect fractionators in the Marcellus and Utica shale plays to Centennial.

The repurposed Centennial could carry up to 230,000 bbl/day of NGLs, Enterprise said. The project is currently under negotiation.

Meanwhile, the company’s ethane header system along the Gulf Coast is currently moving 135,000 bbl/day. The system is expandable beyond 400,000 bbl/day with additional pipeline looping.

So far, Enterprise has received commitments for 360,000 bbl/day, it said.

https://www.icis.com/resources/news/2017/02/28/10083449/us-petchems-consumed-record-amounts-of-ngls-in-2016/

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