US chemical investments for NGLs outpace available supply - Dow

08 March 2011 19:06  [Source: ICIS news]

An ethylene crackerHOUSTON (ICIS)--The available US supply of natural gas liquids (NGL) such as ethane has not kept pace with petrochemical company investments for increased NGL use, an executive with US producer Dow Chemical said on Tuesday.

"The supply of NGLs has not kept pace,” said Doug May, vice president of energy and climate change for Dow.

“The [chemical] industry has shown its quick response,” May added. “There have been a number of investments around de-bottlenecking, allowing us to increase our capacity to use NGLs by 30% over the past couple of years.”

May spoke at the CERAWeek 2011 energy conference in Houston in a forum regarding NGLs and the petrochemical industry.

May rejected the notion that US chemical firms and oil and gas producers were each waiting for the other to increase investments before doing so themselves, saying that the chemical industry had already shown its ability to handle more supply.

For Dow in particular, May pointed to the company’s recently announced joint venture with Mitsui & Co to build an 800,000 tonne/year membrane-based chlor-alkali plant in Freeport, Texas.

“Dow is the largest chlorine producer in the world,” May said. “It’s a very electricity-intensive process, and we’re already making changes in the US that we didn’t think were possible just a couple of years ago.”

May noted that low 2011 natural gas and ethane prices, around $3.80/MMBtu and 65 cents/gal in recent weeks, left him “cautiously optimistic” that natural gas supply from shale plays could be increased along with the infrastructure needed to bring NGLs to market.

However, US policymakers need more clear greenhouse gas (GHG) and permitting policies to further promote NGL supply investments, he said.

The CERAWeek 2011 conference lasts through Friday.

For more on Dow Chemical visit ICIS company intelligence

By: Ben DuBose
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