06 March 2012 17:06 [Source: ICIS news]
HOUSTON (ICIS)--Increased US exports of natural gas liquids (NGLs), petrochemicals and end-use products will result from the natural gas shale boom, relieving oversupplied domestic markets and gaining global presence in new markets, US industry leaders said on Tuesday.
“A few years ago, we were expecting a Middle East build–up so we decided to stop building polyolefin and olefin plants here, and even shut some down,” said Jim Morris, vice president of raw materials for trash bag manufacturer Heritage Bag, a plastics end–user.
Morris said the US is now looking to export chemicals from the US. He said more polymers will be shipped from US ports in the next few years.
Morris spoke during a panel discussion at the CERAWeek energy conference in Houston.
A handful of US cracker projects have been announced or are under discussion, which would consume ethane production from liquid-rich shale basins, and particularly the Marcellus Shale in the northeast.
The shale liquids add to supplies of raw material, such as propane. Traders said low demand pressured propane prices lower because of higher-than-normal winter temperatures. Mont Belvieu propane spot prices dropped to about $1.20/gal from around $1.50/gal prior to winter.
Chevron Phillips executive vice president of olefins and polyolefins Mark Lashier said propane will be fed to the export market, in addition to the possibility of construction of plants specifically intended to produce propylene, which is typically a refinery by-product.
However, there are two main obstacles to the increase of exports, he cautioned.
First, there remains a lack of infrastructure to take the new raw materials to port, said Lashier.
Railroads have seen a resurgence, reaching a level of economic activity for re-investment, Lashier said. The railroads help to move products, but demand has overwhelmed its availability.
Heritage Bag’s Morris said that in addition, investment in the conversion market for end-use products, such as plastic bags and bottles, is not expanding significantly yet.
Morris said conversion plants have been wary since the volatility in prices that hit in 2008, when oil prices neared $150/bbl. Morris said he hopes the increased production of chemicals and raw materials from shale gas will add more stability to prices, leading to expansion and exports.
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