U.S. ethane production to grow, along with expanding domestic consumption and exports

[thackney]

U.S. ethane production to grow, along with expanding domestic consumption and exports
https://www.eia.gov/todayinenergy/detail.php?id=48056
MAY 21, 2021



U.S. production of ethane, a hydrocarbon gas liquid (HGL) produced primarily in natural gas processing plants, has grown rapidly since 2013. Production has nearly doubled from 0.95 million barrels per day (b/d) in the first quarter of 2013 to 1.85 million b/d in the first quarter of 2021. In our Short-Term Energy Outlook, we forecast ethane production to continue to grow in response to a growing U.S. petrochemical industry and rising ethane exports to petrochemical plants around the world, reaching 2.6 million b/d by the fourth quarter of 2022.

U.S. demand for ethane has been growing steadily as a result of capacity expansions of ethylene crackers in the petrochemical industry, which use ethane as a feedstock. Ethylene is a basic chemical used to produce plastics and resins. We estimate that the U.S. petrochemical industry expanded its capacity to produce ethylene from almost 27 million metric tons per year (mt/y) in the first quarter of 2013 (when the first capacity additions to ethylene crackers in over a decade came online) to almost 40 million mt/y in 2020. This growth in ethylene capacity caused domestic demand for ethane as a feedstock to grow from 960,000 b/d in the first quarter of 2013 to 1.83 million b/d in the fourth quarter of 2020.

Ethane consumption declined in the first quarter of 2021 (dropping to 1.51 million b/d) because of a mid-February winter storm that shuttered most petrochemical crackers along the Gulf Coast. However, by the second quarter of 2022, we expect three new crackers—Baystar and Gulf Coast Growth Ventures in Texas and Shell Chemical Appalachia in Pennsylvania—will increase U.S. capacity to produce ethylene by another 11%, to 43.5 million mt/y. We expect these additions to ethylene capacity will cause U.S. ethane demand for feedstock to grow to 2.1 million b/d by the fourth quarter of 2022 from 1.5 million b/d in the first quarter of 2021.



We expect international demand for U.S. ethane exports to also grow as more petrochemical crackers around the world are completed. U.S. exports of ethane began in 2014, when the first export pipelines were completed, shipping ethane to petrochemical plants in Canada. Since then, more export capacity had been added, including three marine export terminals that ship cryogenically cooled ethane overseas in specially built tankers. We expect ethane exports to grow more than 50%, from 300,000 b/d in the first quarter of 2021 to 460,000 b/d in the fourth quarter of 2022. We expect U.S. exports to China to grow the fastest once two large petrochemical crackers in China reach full capacity in early 2022.

[thackney]

[Smokin Joe]

Interesting. The produced gas from the Bakken/Three Forks is rich in ethane. That could translate to more work for me.

[IsailedawayfromFR]

Hate to burst the bubble, but the surge in ethane comes from the stupendous increase over the past two decades in unconventional liquids production, and the associated liquids-rich gas that is produced.

In past years, most natural gas was produced from natural gas fields that did not have such generous amounts of liquids produced.

So when the unconventional liquid plays taper off, so will the ethane production.  likely by end of this decade.

Those liquid plays are finite and commercially exist in only a handful of US fields.

[Hoodat]

That's racist!

[Hoodat]

Interesting. The produced gas from the Bakken/Three Forks is rich in ethane. That could translate to more work for me.

Find a catalyst that will convert two methane molecules into a hydrogen and ethylene molecule, and no one in your family will ever have to work again for the next ten generations.

[thackney]

So when the unconventional liquid plays taper off, so will the ethane production.  likely by end of this decade.

I would take that bet.  It will last far longer.  But not forever, of course.

For a very long time, ethane has be rejected back into the Methane stream for the Natural Gas Pipeline up to the max allowable and still meet spec.  Now that there is a growing market for the product, far more existing sources are separating it and getting piped up to deliver it as a product itself.  Several companies has been expanding this market.

[Smokin Joe]

I would take that bet.  It will last far longer.  But not forever, of course.

For a very long time, ethane has be rejected back into the Methane stream for the Natural Gas Pipeline up to the max allowable and still meet spec.  Now that there is a growing market for the product, far more existing sources are separating it and getting piped up to deliver it as a product itself.  Several companies has been expanding this market.

Yes, Hess Midstream expanded their gas plant at Tioga, ND and part of the package was for expanded ethane extraction. The Plant will be able to process 400 MMcfd, mostly from the Bakken and that capacity should go online (if it hasn't already) before the end of the year (was targeted for mid 2021). https://www.ogj.com/refining-processing/article/17279074/hess-midstream-to-expand-north-dakota-gas-processing-capacity

Ethane must be removed along with other NGLs to keep the BTU yield down in workable ranges for appliances and other uses that presume dry gas (Methane).

For the benefit of those who do not know, ethane (C2H6) burns hotter than Methane (CH4), and too much ethane in the Natural Gas will produce excessive heat in devices which utilize methane and are made for that, but falls short of propane (C3H8) for heat generation. The three major component gases in raw wellhead gas are the three most basic hydrocarbons, commonly denoted in the field as C1, C2, and C3, (based on the number of carbon atoms in the molecule), and are often just the major part of the mix present in that wellhead gas. Ethane comprises roughly 20% of the wellhead gas from the Bakken and Three Forks formations.

Related: https://ihsmarkit.com/research-analysis/northern-border-pipeline-gas-ethane.html?ite=996286&ito=1274&itq=9713f73b-491e-47cd-bfcd-38b7c776c5c1&itx%5Bidio%5D=769726467

https://bismarcktribune.com/news/state-and-regional/large-power-plant-slated-for-williston-area-to-harness-bakkens-ethane-supply/article_31557272-bc42-5dc2-9468-59740f8197f5.html

[thackney]

Yes, Hess Midstream expanded their gas plant at Tioga, ND and part of the package was for expanded ethane extraction. The Plant will be able to process 400 MMcfd, mostly from the Bakken and that capacity should go online (if it hasn't already) before the end of the year (was targeted for mid 2021). https://www.ogj.com/refining-processing/article/17279074/hess-midstream-to-expand-north-dakota-gas-processing-capacity

Ethane must be removed along with other NGLs to keep the BTU yield down in workable ranges for appliances and other uses that presume dry gas (Methane).

For the benefit of those who do not know, ethane (C2H6) burns hotter than Methane (CH4), and too much ethane in the Natural Gas will produce excessive heat in devices which utilize methane and are made for that, but falls short of propane (C3H8) for heat generation. The three major component gases in raw wellhead gas are the three most basic hydrocarbons, commonly denoted in the field as C1, C2, and C3, (based on the number of carbon atoms in the molecule), and are often just the major part of the mix present in that wellhead gas. Ethane comprises roughly 20% of the wellhead gas from the Bakken and Three Forks formations.

Related: https://ihsmarkit.com/research-analysis/northern-border-pipeline-gas-ethane.html?ite=996286&ito=1274&itq=9713f73b-491e-47cd-bfcd-38b7c776c5c1&itx%5Bidio%5D=769726467

https://bismarcktribune.com/news/state-and-regional/large-power-plant-slated-for-williston-area-to-harness-bakkens-ethane-supply/article_31557272-bc42-5dc2-9468-59740f8197f5.html

I once visited a Gas Plant and Compressor station in West Virginia that in the past had injected AIR into the pipeline to meet the BTU spec since the gas was so wet (hot).  Without it, they could not inject into the pipeline.  Fortunately that had ended by the time we got there.  That place was a scary place with all the crazy modifications the locals had done.  High pressure gas brought into the control room so they could read the pressure direct without going out into the weather.

[Smokin Joe]

I once visited a Gas Plant and Compressor station in West Virginia that in the past had injected AIR into the pipeline to meet the BTU spec since the gas was so wet (hot).  Without it, they could not inject into the pipeline.  Fortunately that had ended by the time we got there.  That place was a scary place with all the crazy modifications the locals had done.  High pressure gas brought into the control room so they could read the pressure direct without going out into the weather.

That's scary, right there...(why not just mount the gauge outside the window?) 

I have monitored component gases in eight states on wellsite, and it is remarkable how much variation exists, even in the same geological formation. The Utica, for instance, has a 'wet' side and a 'dry' side--it all depends on where you are what component ratios will be present.
I have worked other areas where C1-C17 are virtually absent from the reservoir (NV).

The Bakken is pretty juicy, and a well I worked in 1980 where we tagged some open fractures in the Middle Bakken produced high gas while drilling (we drilled the rest of the well underbalanced) and condensate in the drop out jars for the gas extractor out on the shale shaker (this was Winter). One morning, when the sun came up the temperature jumped from  the =30s to about -10 and the liquids in the jar boiled off fast enough to blow the stopper out. The well IP'd at 460mcfd of gas and 70 bopd of condensate from 4 feet of perforations...which doesn't seem like much today, but today's Bakken wells have an average of 9500 feet of wellbore through the Middle Bakken instead of 4.

[thackney]

I have monitored component gases in eight states on wellsite, and it is remarkable how much variation exists, even in the same geological formation. The Utica, for instance, has a 'wet' side and a 'dry' side--it all depends on where you are what component ratios will be present.

[IsailedawayfromFR]

I would take that bet.  It will last far longer.  But not forever, of course.

For a very long time, ethane has be rejected back into the Methane stream for the Natural Gas Pipeline up to the max allowable and still meet spec.  Now that there is a growing market for the product, far more existing sources are separating it and getting piped up to deliver it as a product itself.  Several companies has been expanding this market.

You are betting that the production growth will continue in unconventional liquids past 2030?

You are on, as there is positively no way geologically that can happen. 

Have you seen the latest production graph of unconventional liquids BTW?

[thackney]

You are betting that the production growth will continue in unconventional liquids past 2030?

My point is we have been hiding the ethane stream coming out of traditional wells for decades.  There was not a significant market for it.  It was not economical to separate it out.  As much as companies could, they sent it back into the stream for pipeline gas, mixed with the mostly methane.

Now that there is a market that pays better than the pipeline Nat Gas, we have the gas plants sending ethane from multiple sources into that system.  Ethane is not limited to only come from unconventional wells.

So when the unconventional liquid plays taper off, so will the ethane production.  likely by end of this decade.

Also you are moving the goal posts changing from ethane production tapering off by 2030, to now continued growth.  But I agree it will continue to grow.

[IsailedawayfromFR]

My point is we have been hiding the ethane stream coming out of traditional wells for decades.  There was not a significant market for it.  It was not economical to separate it out.  As much as companies could, they sent it back into the stream for pipeline gas, mixed with the mostly methane.

Now that there is a market that pays better than the pipeline Nat Gas, we have the gas plants sending ethane from multiple sources into that system.  Ethane is not limited to only come from unconventional wells.

Also you are moving the goal posts changing from ethane production tapering off by 2030, to now continued growth.  But I agree it will continue to grow.

I see your point about more ethane extraction and its growth that will be different than unconventionals growth.

I was not moving goalposts though, as had thought your comment was betting unconventional liquids production would be continuing to grow past this decade.

[thackney]

I see your point about more ethane extraction and its growth that will be different than unconventionals growth.

I was not moving goalposts though, as had thought your comment was betting unconventional liquids production would be continuing to grow past this decade.

Also look at the first chart of the article about ethane production.  Very, little of it is oil based and almost entirely from the gas stream.  It has not had the large dip as your chart in oil did.  It did dip, but much smaller and already recovered.

[IsailedawayfromFR]

Also look at the first chart of the article about ethane production.  Very, little of it is oil based and almost entirely from the gas stream.  It has not had the large dip as your chart in oil did.  It did dip, but much smaller and already recovered.

But a lot of the gas stream is indeed a by-product of the oil production.  That is the entire point I am making, i.e. - in the past, most of the natural gas produced was from natural gas fields, not produced as a by-product of unconventional liquids production.  This by-product gas is far richer in heavier components such as ethanes than the natural gas fields in the past, which were overwhelmingly methane.  And the amounts of that by-product gas will not be as great after this decade as the liquids production it comes from dwindles.