U.S. ETHYLENE GROWTH TO 2002 WILL RELY ON HEAVIER FEEDSTOCKS

Ethylene demand in the U.S. by 2002 will increase by 3.1%/year from an estimated 41.3 billion lb this year to 52.9 billion lb. Additionally, ethylene feedstock mix over the forecast period will tilt to heavier feeds such as naphtha, condensate, and gas oil and away from lighter ones, especially butane (Fig. 1). These are the major conclusions of an analysis by Petral Worldwide, a Houston-based consulting firm. The U.S. International Trade Commission, Washington, has reported current U.S.

Dec. 27, 1993

3 min read

Ethylene demand in the U.S. by 2002 will increase by 3.1%/year from an estimated 41.3 billion lb this year to 52.9 billion lb.

Additionally, ethylene feedstock mix over the forecast period will tilt to heavier feeds such as naphtha, condensate, and gas oil and away from lighter ones, especially butane (Fig. 1).

These are the major conclusions of an analysis by Petral Worldwide, a Houston-based consulting firm.

CAPACITY GROWTH

The U.S. International Trade Commission, Washington, has reported current U.S. ethylene nameplate capacity at 46.1 billion lb.

To meet the projected 2002 ethylene demand, an additional 6.8 million lb of production capacity will have to come on stream over the next several years, says Petral.

To support the projected increased ethylene production, total feedstock requirements will rise by 3.6%/year from 1.22 million b/cd in 1993 to 1.63 million b/cd by 2002.

According to Petral's analysis, the relative mix between light and heavy feedstocks over the next 16 years will move toward feeds heavier than butane, such as naphtha, condensate, and gas oil.

The reason projected ethylene feedstock growth is slightly greater than the corresponding projected increase in ethylene production is because heavier feedstocks yield less ethylene and more coproducts.

The trend toward heavier feedstocks, says Petral Worldwide, reflects both the anticipated strengthening of natural-gas prices vs. crude-oil prices and an increasing availability of light-naphtha streams.

N-C4 DEMAND

Implementation of more stringent gasoline vapor-pressure limits, increased production of oxygenated and reformulated gasoline, and changes in jet-fuel formulations underlie the increased availability of economic light naphtha feedstocks.

Before 1989, normal butane (n-C4) was not generally used as ethylene-plant feedstock because it commanded a premium value in motor-gasoline blending. Normal butane has an (R+M)/2 octane value of 92.5 and an Rvp of 52 psi.

With the introduction of U.S. Environmental Protection Agency's more stringent vapor-pressure regulations in 1989, however, n-C4 was displaced from the motor-gasoline pool and as a result became an economic ethylene-plant feedstock.

In recent years, growing demand for n-C4 to support production of methyl tertiary butyl ether (MTBE) has increased butane prices. These higher prices, by Petral's estimate, have caused the volume of n-C4 consumed as ethylene feedstock to fall from a 1989 high of 67,900 b/cd to an expected 1993 consumption level of 25,500 b/cd.

For the study period after 1994, butane consumed as ethylene plant feed will stabilize at about 10-15,000 b/cd.

In 1993, heavy ethylene feedstocks will account for 25% of the total feedstock consumed in ethylene production. By 2002, heavy feedstocks will grow to 32% of the total.

Over this same time period, ethane consumed as ethylene feed will decrease from 49 to 45%. The relative portion of propane and butane consumed as ethylene plant feeds will also decrease.

Because heavier feedstocks mean an increased volume of propylene and aromatics, this will push down prices for these chemicals.