26 May 2011 10:39 [Source: ICIS news]
“The ‘shale gale’ has resulted in a significant long-term change in the relationship between oil and natural gas prices,” said Russell Heinen, director at research and consultancy firm, IHS.
The higher margins on cracking ethane has also resulted in significant feedstock shifts in the
“This change has resulted in a tightness in other product chains and significant price increases for propylene and butadiene [BD],” he said.
Ethane produces very few products, so the shift in feedstocks usage in the
As a result, prices of propylene and BD have increased faster than that of ethylene, he added.
“The overall effect is positive”, but the industry in the
The industry needs to bring on stream at least 3m tonnes/year of cracked ethane and requires nearly 1m tonnes of debottlenecks to come on stream in early 2016, he said. This is needed to capitalise on ethane that can potentially be made available, he added.
The industry will also need to supply the logistics to handle nearly 300,000-400,000 bbl/day of new ethane supplies by 2016-2020, Heinen said.
US producers have already announced the expansions of around 5m tonnes of new ethylene capacity, mainly based on the availability of natural gas liquids (NGLS) over the next five years, said John Pearson, director at IHS.
“However, domestic demand is forecast to grow at only half of that pace,” Pearson said.
“Asian producers should consider investing in
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