Looking for ethane? Head West

Business, US


By Malini Hariharan

A problem of plenty is building up in the US where the rise of shale gas production could create problems in disposal of ethane. This may sound hard to believe but a new report by Bentek Energy concludes that a big challenge for Marcellus Shale gas producers, located in Northeast US, is to find an outlet for ethane.

“In most natural gas producing regions, ethane is a highly valued byproduct of natural gas production, sold as an important feedstock for the petrochemical industry. But in the rapidly growing Marcellus producing region of the Appalachian basin, ethane is viewed by some natural gas producers as a contaminant that could threaten development plans in the area,” says the consultancy.

“Without a viable offtake for ethane, the shale producers may be forced to curtail gas production,” warns Bentek.

Pic Source: Marcellus Center

Production at Marcellus is steadily growing with volumes rising from 0.3 bcf/day in early 2009 to 1.2 bcf/day in August 2010. Estimates for the future range from 5 bcf/day to 10 bcf/day over the next five years.

Marcellus does not have enough gas processing infrastructure yet to extract all the natural gas liquids (NGLs). And while is this being addressed by investments in new gas processing facilities a bigger problem is that there is no market for ethane from the NGLs in Northeast US.

Interest in establishing new pipelines is said to be growing with three proposals to build infrastructure to transport the ethane to Canada and even the Gulf Coast.

But the economics could be a challenge, points out Bentek. Ethane prices would have to be sufficiently higher than natural gas to cover the cost of transportation. Another risk is that of overbuilding ethane transportation – building more capacity than what the market can absorb.

And from the petrochemicals industry perspective, ethane prices would have to be low enough to give producers a competitive edge in global markets.


When Does Consolidation Become A Strategic Problem?


All our yesterdays… the ICI Runcorn site in its heyday Source of picture: ...

Learn more

Picking The Winners And Losers


  Source of picture: ICIS   By John Richardson ICIS has just published...

Learn more
More posts
Rate of recovery hugely reliant on effectiveness of government policies

By John Richardson UNLESS MORE action is taken by developed countries to help counter the impact of ...

China bans on single-use plastics move forward with major recycling investments likely

By John Richardson THIS EVENT slipped under most people’s radar in the midst of the pandemic crisi...

Developing world polymers demand unlikely to see quick rebound

By John Richardson THIS IS a tragedy in the genuine sense of the word, not just in the so-often misu...

China’s policy dilemma: raising local demand while protecting exports

  By John Richardson IN THIS Western-centric world, a huge amount of ink is split over the cons...

China’s polyethylene demand good so far in 2020 but beware of risks ahead

Note that all the comparisons in this post are on a year-on-year basis unless otherwise stated By Jo...

Ah, I see: China’s booming demand mystery a little closer to being solved

  Note that all the data comparisons below are on a year-on-year basis By John Richardson THE P...

The China polyester mystery continues in a world turned upside down

By John Richardson SOMETHING very strange is happening in China’s polyester industry which has eno...

China will struggle to boost local retail sales during rest of 2020 with export outlook uncertain

By John Richardson IF IT were easy, then there would be an oversupply of owners of large yachts in M...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more