National ethane production expected to increase

The U.S. Energy Information Administration (EIA) released a report on Friday projecting that ethane production would soon increase by 300,000 barrels per day (b/d) and will account for approximately two-thirds of all hydrocarbon gas liquid (HGL) production growth.

The details of the forecast were published in the EIA’s Short-Term Outlook for Hydrocarbon Gas Liquids, a supplement to the organization’s Short-Term Energy Outlook report. The report projected that ethane production would increase from 1.1 million b/d to 1.4 million b/d by 2017 as a result of an oversupply and increased investments in the HGL.

Natural gas companies often keep ethane mixed with natural gas, due to the expense of separating the HGLs. As of 2012, investments in ethane-consuming petrochemical plants and export facilities increased, allowing for a large, inexpensive supply of pure ethane to become newly available. The price of ethane is still expected to remain above that of natural gas, but consumption is expected to increase by 50,000 b/d domestically by next year, and increase by another 80,000 b/d once new petrochemical plants are operational.

The U.S. has been a net exporter of ethane since 2014. The Short-Term Energy Outlook projects net ethane exports will also increase from 60,000 b/d last year to 230,000 b/d by 2017.