US ethane to hover in the 20s cents/gal for next 2 years – Dow

25 April 2013 17:04  [Source: ICIS news]

HOUSTON (ICIS)--US ethane prices will likely hover in the 20s cents/gal range for the next two years, the chief executive of Dow Chemical said on Thursday.

Ethane is a key consideration among US producers because most of them use it as a feedstock to produce ethylene.

The advent of shale gas has increased supplies of ethane and other natural gas liquids (NGLs), giving US producers a cost advantage against much of the world, which uses oil-based naphtha.

Earlier, natural gas prices had fallen, and companies closed dry-gas wells. They began concentrating on wet-gas wells instead, which produce higher proportions of NGLs.

The result had caused ethane prices to fall.

In December 2011, prices were above 80 cents/gal, according to ICIS. In December 2012, they were in the 50s cents/gal.

This week, they were below 30 cents/gal.

Ethane prices will likely stay at this level for the next two years, said Andrew Liveris, Dow CEO.

He made his comments during an earnings conference call.

During this time, ethane will keep testing bottoms, as well as breakthroughs at around 30-35 cents/gal, Liveris said.

By: Al Greenwood
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