Over the next decade, nearly half of the world’s ethylene will be produced from ethane and LPG

20-Sep-13

By 2023, nearly half of the world’s ethylene will be produced from ethane and LPG, at the expense of naphtha, according to ESAI Energy. The shift in the global ethylene feedstock slate is driven by ethane-based capacity in the U.S. and the Middle East, and low natural gas prices in the U.S. and Saudi Arabia. Global ethylene production will expand from 127 mln tpa in 2012 to 174 mln tpa by 2023, an increase of 47 mln tpa. Of this growth, 24 million tons of production will be ethane and LPG based, and 15 million tons will be naphtha-based production. The feedstock shift is most dramatic in North America, where prolific shale gas production yields cheap ethane in the U.S. and driving a petrochemical resurgence. By 2023, total planned ethane-based ethylene capacity additions amount to an impressive 11 mln tpa. “Increased ethane use in North America will mark the return of that region as a highly competitive ethylene derivatives producer and exporter”, points out Vivek Mathur at ESAI Energy. By 2023, North American exports of key ethylene derivatives could grow to over 10 million tons per year—double today’s levels, targeting Latin America, but also Europe and Asia, competing directly with Middle Eastern exporters The increased substitution of naphtha by ethane, however, will also impact the supply of other petrochemical by-products, notes Mathur, we are looking at lower production of relatively higher value petrochemicals like propylene and butadiene”.