MOSCOW (MRC) -- In 2022, US ethane demand increased by approximately 9%, or almost 0.2 million bpd, according to the EIA's preliminary annual data published in the Petroleum Supply Monthly, said Hydrocarbonengineering.
US production and consumption of ethane, a hydrocarbon gas liquid used almost exclusively as a feedstock in the petrochemical industry, has grown since 2010 along with the build-out of US petrochemical capacity. More recently, international demand for ethane exported from the US, also for use as a petrochemical feedstock, has been growing. Petrochemical plants consuming ethane use steam crackers to produce ethylene, a precursor chemical for manufacturing many plastics and resins. US ethane product supplied, a proxy for ethane demand for domestic ethylene production, averaged just under 2.0 million bpd in 2022, reaching a peak of almost 2.2 million bpd in July.
Ethane prices almost doubled between January and June 2022, from approximately US$0.37/gal., or US$5.65 per million British thermal units (Btu), to USD0.64/gal., or USD9.67/million Btu, according to Bloomberg Finance, L.P. Most petrochemical cracking capacity built in the US since 2012 can only use ethane as a feedstock, meaning high ethane prices can reduce ethylene margins. In 3Q22, new ethylene crackers came online in Port Arthur, Texas, and Monaca, Pennsylvania, adding a combined 156 000 bpd of domestic ethane cracking capacity. These capacity additions follow a 108 000 bpd increase in cracker capacity in 2021. Ethane demand declined in December due to a winter storm that caused some petrochemical facilities in the Gulf Coast to be idled prior to the storm.
US ethane exports rose to 447 000 bpd in 2022, up from 369 000 bpd in 2021 and 271 000 bpd in 2020, as the capacity to consume ethane as a petrochemical feedstock rose internationally. Ethane exports from the US to China increased 50% from 2021 levels to average a record 157 000 bpd in 2022, as an additional 75 000 bpd of ethane-fed cracker capacity came online in China. The construction of new ethane tankers has facilitated higher utilisation of US ethane export capacity.
In the EIA's February 2023 Short-Term Energy Outlook (STEO), it is forecast that domestic ethane consumption will grow slightly to just under 2.1 million bpd in 2023 and just over 2.1 million bpd in 2024, reflecting no anticipated new petrochemical cracker completions through the end of the forecast period. EIA forecasts ethane exports to continue growing to an average of 460 000 bpd in 2023 and 490 000 bpd in 2024. Increased petrochemical capacity coming online abroad, paired with export capacity additions, is expected to drive these increases.
We remind, Braskem Idesa (BI) and Advario announce the formalization of their partnership, by virtue of which Advario acquired 50% of the capital of Terminal Quimica Puerto Mexico (TQPM), a company whose purpose is the construction and operation of a new ethane import terminal in Coatzacoalcos, Veracruz, said the company.
The total estimated investment for the project amounts to USD400 million. The new terminal will have an area of 10 hectares for ethane storage connected to the BI petrochemical complex through an ethane pipeline of approximately 10 kilometers; it will have a storage capacity of 100 thousand m3 and will supply the ethane required by the BI plant to operate at full capacity. The project will have a positive impact on the southern region of Veracruz through the generation of approximately 2 thousand direct jobs, the contracting of suppliers and the creation of new logistics infrastructure for the area and the state.