US Ethylene Boom on its Way

Wednesday 6 February 2013, Amsterdam

The ongoing shale revolution will see the US ethylene industry surge in the near future, growing by more than a third by 2017, predicts the latest report from business intelligence experts'.

According to the new report*, US ethylene capacity dropped from 27.089 Million Metric tons per annum (MMpta) in 2000 to an estimated 26.137 MMpta in 2012, but increased investments in the industry will see this figure jump to 35.048 MMpta by 2017 – an increase of just under 35%.

In correlation with the recent surge in shale gas output, the production of Natural Gas Liquids (NGLs) has increased significantly. Ethane, a hydrocarbon almost exclusively used in petrochemical production, is a major component of NGLs and is cracked to produce ethylene.

Correspondingly, investors have been keen to be a part of an ethylene industry on the rise, and many of the USA’s major ethylene producers are investigating the possibility of bringing online new plants with capacities of more than one MMpta in the near future.

Strong ethane production has also lowered prices and made the US petrochemicals industry much more competitive than in previous years, says the report. Five years ago, the US was one of the most expensive places to produce ethylene, but the ethane-based US petrochemicals industry is now in a better position than the naphtha-based petrochemicals industries of Europe and Asia-Pacific, and second only to the Middle East in terms of production economy.