U.S. ethane production has been one of the fastest growing energy commodities, increasing from just over 1.0 MMb/d in 2015 to more than 3.0 MMb/d in 2025 (left graph below). But even with that astronomical growth, a seasonal pattern has emerged. For five of the past 6 winters, frigid winter weather has resulted in natural gas wellhead freeze-offs and other market disruptions, which has slashed ethane production – regular as clockwork (right graph below).
It sometimes happens in December or February, but most often in January, as it has this year. According to RBN’s Natgas Billboard report, U.S. natural gas was curtailed about 15 Bcf/d during most of last week. Combined with opportunistic sales of ethane in the gas stream (incremental ethane rejection), we estimate that ethane production will be cut by about 300 Mb/d on average for January, with recovery expected in February – unless the market suffers another round of weather-related curtailments.
