Expanding supplies of natural gas liquids from unconventional sources to benefit cost structure of US petrochem market

Expanding supplies of natural gas liquids derived from unconventional sources, such as the Eagle Ford and Marcellus shales and Bakken formation, is expected to benefit the cost structure of the North American petrochemical market, as per Platts. About 250,000 bpd of additional ethane supply will come to the market by 2012, exerting downward pressure on ethane prices in a market that has limited demand. Plentiful NGL supply, especially ethane, will contribute to long-term, strong margins for the US and Canadian petrochemical industry. This will result in competitive advantages for US ethylene producers vs their European and Asian counterparts. The wide differentials between crude oil and cheaper North American natural gas prices also creates an encouraging economic environment for midstream and petrochemical producers.
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