Ethane, LPG to trump naphtha as preferred ethylene feedstocks

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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