The relatively recent and intense exploitation of US natural gas reserves is resulting in an increased dependence on butadiene imports, according to a report released Tuesday from business intelligence group GBI Research.
The business intelligence companys latest study predicts that the disparity between butadiene production and demand will climb in the near future as the US moves away from crude oil and naphtha to the increasingly cheap natural gas.
The percentage of C4 hydrocarbons required for the production of butadiene is very low in natural gas compared to crude oil or naphtha. As a result, growing demand will necessarily require a boost in imports.
US butadiene demand last year stood at 1.9 million tons comparable to the 1.6 million tons the country produced.
However, GBI Research predicts demand will hit 2.4 million tons by 2020, while butadiene yield will climb at a slower rate, reaching 1.9 million tons by the end of the decade.
The next four years in particular are expected to be relatively bleak in terms of butadiene production growth. Beyond that period, a number of on-purpose technologies are currently in development, possibly boosting overall production.
However, it will take some time for these to emerge as a viable alternative supply option, GBI says.
The US imported 329,118 tons of butadiene last year, with Canada, South Korea, Netherlands, China, the UK and Germany the leading suppliers. GBI Research expects that figure to rise to 524,916 tons by 2020.