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ESAI: Shale development to boost US ethylene exports

A natural gas liquids boom stemming from development of US shale plays will spur investments in export-related petrochemical plans targeting Latin American market, Energy Security Analysis Inc. (ESAI) said in a recent report.

With US demand for ethylene derivatives growing modestly, expanding petrochemical capacity will be export-oriented. ESAI expects the US surplus of ethylene derivatives to expand to over 4 million tonnes/year (tpy) by 2016, a 40% increase from 2011.

The US is seeing considerable activity, almost all of which is based on the frenetic pace of shale gas exploration and production and the prospects for cheap, large volumes of natural gas as potential feedstock (OGJ, May 7, 2010, p. 88).

Consequently, US ethylene is becoming more competitive in global markets given its feedstock price advantage over naphtha, ESAI reported Aug. 2 in its 5-year Global Industrial Fuels Outlook. ESAI is based in Boston.

Two proposed crackers tentatively are scheduled to come on stream during 2012-16, and several existing plants are undergoing upgrades to absorb more ethane. The last time a cracker was built in the US was 2000.

In response to increased liquids production from Marcellus and Utica shales in Pennsylvania and Ohio, Royal Dutch Shell selected a site near Pittsburgh for the potential construction of a petrochemical complex (OGJ Online, Mar. 15, 2012).

Dow Chemical Co. plans to invest $1.7 billion to build a 1.5-million-tpy cracker at its Freeport, Tex., center (OGJ Online, Apr. 30, 2012).


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