Demand growth for hydrocarbons from emerging markets will continue to dominate global supply with Asia leading the pack, stated Tony Chovanec, vice president of fundamentals and supply appraisal, Enterprise Products Partners. Chovanec served as the keynote speaker at the Economic Alliance Houston Port Region’s Industrial Procurement Forum. Additionally, gas is slated to displace coal as the second largest fuel across all forecasts.
As for natural gas liquids, he commented that ethane is plentiful, especially along the Gulf Coast. The U.S. Energy Information Administration (EIA) predicts ethane production to increase from an average of 1.25 million barrels per day (b/d) in 2016 to 1.7 million b/d in 2018. The petrochemical industry expects to consume this chemical “domestically as well as exported to other countries.”
Ethane is a petrochemical feedstock to produce ethylene, a compound used in the creation of plastic, with expansions at existing ethylene plants contributing to a 170,000 b/d increase in ethane consumption between 2013 and 2016, EIA’s latest Short-Term Energy Outlook report said.
Due to the shale boom producing more natural gas liquids, many operators are all taking part in the ethylene surge and are completing major ethylene and polyethylene plastics expansions.
By this time next year, construction at six new ethylene plants and one restarted plant will near completion and collectively be capable of using 450,000 b/d of ethane feedstock, the agency reported.
Last year, Enterprise built an ethane export facility, one of the largest of its kind and located on the Houston Ship Channel, which provides terminaling services. Chovanec said that in September 2016, the company placed its Morgan’s Point Ethane Export Terminal into commercial service. The terminal has an aggregate loading rate of approximately 10,000 barrels per hour of fully refrigerated ethane. Supply for the Morgan’s Point Ethane Export Terminal is sourced from the Mont Belvieu NGL fractionation and storage complex and is transported through a new 18-mile, 24-inch diameter pipeline that the company completed in February 2016.
The company stated that its LPG export services continue to benefit from increased NGL supplies produced from domestic shale plays such as the Eagle Ford Shale and international demand for propane as a feedstock.
Enterprise then announced plans in July 2017 to build another terminal, along the Houston Ship Channel to export ethylene, a building block of most plastics. Enterprise, along with the United Kingdom’s Navigator Gas, is “taking advantage of all the new ethylene production coming along,” Chovanec said.
“As the U.S. LNG exports are expected to grow substantially in the next four years,” he said, “we expect EPD assets to handle exports, imports, batching and blending of various crude oil grades and qualities. There’s no doubt in my mind that we will be able to export U.S. crude light sweet oil; it’s easy to blend and refine.”