The Known Unknown: Growing ethane demand will spell a tighter year for US dry gas
When the market talks about ethane and ethane rejection, it always comes from the viewpoint of the availability of ethane and the cost to supply the additional ethane. This is but one side of the picture with the other being demand – the natural gas industry and petrochemicals. Availability of abundant ethane has prompted more ethane being sold as natural gas on a heat equivalent basis, keeping ethane prices lower than heavier petrochemical feedstocks. This has in turn prompted a wave of new petrochemical projects and exports wanting to take advantage of this rejected ethane. This insight investigates the impact of decreasing ethane rejection on natural gas balances and ethane's competitiveness as US petrochemical feedstock.