The challenges and opportunities around US NGL and petrochemical exports
Friday February 26, 2016
Earlier this week we attended the NGL Feedstocks and Derivatives: Global Supply & Demand Dynamics 2016 conference in Houston, hosted by the American Business Conferences. During the presentations, Q&A sessions, round-table discussions, and our conversations with the industry during networking breaks, we debated the questions around exporting NGLs and petrochemicals out of the US. The best response when asking tough market questions was, “Well, it depends.” The US NGL market is gaining an increasing share of global demand as the shale boom has made it the world’s largest oil and gas producer and the largest LPG exporter since 2014. In 2015, the US produced 1.395 million b/d of propane and exported about 43% of the total (604,000 b/d), according to the US Energy Information Administration. It also produced 481,000 b/d of butane and exported about 24% (117,000 b/d), as of November 2015. With the recently completed Enterprise’s terminal expansion, total US LPG export capacity is at 1.045 million b/d. With strong production growth in the US and flat demand in Europe and the Americas, US LPG is increasingly reaching distant markets like Asia. Additionally, US ethane will also fulfill global demand as the first cargo of US ethane is set to leave this March from Sunoco’s Marcus Hook export facility in Pennsylvania. Sunoco’s 70,000 b/d Marcus Hook terminal in Pennsylvania and Enterprise’s 200,000 b/d Morgan’s Point terminal in Texas will serve to satisfy export demand, currently contracted to Europe and India. 
Following the startup of Enterprise’s terminal in 3Q 2016, US ethane exports are expected to ramp up to 150,000 b/d in 2016 and 283,000 b/d in 2017 from 69,000 b/d in 2015, according to Platts Bentek Market Call: North American NGLs, 1Q 2016. During roundtable discussions, conference participants discussed which country — China, Brazil, or India — was the best market for US ethane, propane, butane, and naphtha. And, of course, the answer was, “Well, it depends.” For US ethane exports, the consensus was that India is the best market. As of 2016, India has a capacity of 5.7 million m...