Ethane is seldom transported in ships from one region to another due to the high costs of shipping cryogenic products and a general lack of petrochemical demand beyond indigenous supplies. Despite that difficulty, ethane is an extremely important component of the global petrochemical industry.
Nearly all ethane is extracted from natural gas. Its physical properties are between those of methane and propane. Methane is the main component of natural gas, and much of the ethane can either be left in the gas or extracted from it along with the LPG.
Whether to recover ethane generally depends on the economics of extracting it from the produced natural gas. If ethane is to be recovered, its price must be higher than its extraction and purification costs, including its gas-based heating value.
Analyses by Purvin & Gertz’ strategic partner, Chemical Market Associates Inc. (CMAI), Houston, show that ethane was used to produce almost 31 million tonnes of ethylene in 2006, or about 28% of the 110 million tonnes of ethylene produced during the year. Despite this very large market, ethane’s use is extensive in only a few regions of the world, primarily the Middle East and North America.
Regional ethane use
The largest regional use of ethane occurs in the US and Canada, which account for about half of all the ethane consumed in the world. In the US, ethane supplies are adequate to cover industry needs, as significant amounts of ethane are still not recovered from natural gas processing.
The Canadian petrochemical industry uses ethane extensively in Western Canada, while the eastern Canadian industry uses a wider variety of feedstocks. With ethane production declining in Western Canada, propane has been used to supplement that production. Longer term, additional gas supplies from the Mackenzie Delta, Alaska, or both should help supplement current ethane supplies.
Latin America (primarily Mexico and Argentina) produced almost 40% of its ethylene from ethane. Ethane consumption in Western Europe accounted for about 9% of that region’s total ethylene production.
Lastly, the Middle East has become a significant component of the global ethane market. About two-thirds of the ethylene produced in the region is derived from ethane. Thus, the Middle East uses about a quarter of the total world’s consumption of ethane. As new ethylene plants appear in several countries in the region, the Middle East’s share of the ethane market should grow to about 45% by 2010.
Additional ethane will need to be extracted from natural gas to satisfy global consumption for petrochemical production. Ethane demand could rise to around 50 million tonnes by the end of the decade. Most of this expected increase would occur in the Middle East.