17 September 2008 23:22 [Source: ICIS news]
BOSTON (ICIS news)--US petrochemical producers will have to pay an increasing premium for natural gas liquids (NGLs) feedstocks as new sources of natural gas will not contain these products, an industry consultant said on Wednesday.
There is a shift in production from natural gas associated with oil production to gas from coal beds, shale and tight sands, said Andrew Swanson, vice president, chemicals of Nexant.
Natural gas liquids - ethane, propane and butanes - are important chemical feedstocks, which are extracted from the rich natural gas associated with oil production, he explained at the Chemical Purchasing Summit, organised by ICIS and Purchasing magazine.
However, coal beds, shale and tight sands are poor sources of NGLs, producing a sweet (no sulphur) but dry gas.
Swanson concluded that the chemical industry will pay an increasing premium for NGLs over their heating value.
However, the cracking of NGLs in the ?xml:namespace>
This was driving the industry into the cracking of light gases but was also keeping the prices of co-products from naphtha cracking high.
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