13 March 2013 15:33 [Source: ICIS news]
NEW YORK (ICIS)--US ethane supplies will continue to outpace demand for at least the next five years as shale natural gas production rises by 20% over the period, a LyondellBasell senior executive said on Wednesday.
“The amount of natural gas and NGLs [natural gas liquids] coming out of the ground is astounding. The wells are extremely prolific,” said Tim Roberts –senior vice president of olefins and polyolefins, Americas – at the company’s annual investor day.
“If you have any NGLs coming out of natural gas production, you are incentivised to keep drilling,” he added.
“The NGLs give companies a big incentive to produce, and ethane will ride that coattail. Ethane production is expected to continue exceeding demand,” said Roberts.
US ethane production and inventories are at record levels, he noted.
With the assumption that five out of seven planned crackers in the US come on line, ethane “supply should be ample to cover that and more”, Roberts said.
In addition, US midstream infrastructure – comprising fractionators and pipelines – has caught up with ethane capacity, enabling efficient delivery, he added.
“We have a bullish view on long ethane for years. The economics are still very positive for natural gas production,” said Jim Gallogly, CEO of LyondellBasell.
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