U.S. ethane exports have risen steadily over the past five years, from next to nothing in early 2014 to an average of 255 Mb/d in 2018 and 269 Mb/d in the first three months of this year. But unlike its heavier NGL siblings propane and butane, which are in demand globally as fuels and feedstocks, ethane’s only established use is in steam crackers specifically equipped to process it, so there are only a few countries where exported ethane is likely to end up. Also, the waterborne transport of ethane is generally limited to specially designed ethane carriers, and there aren’t many of those around because of ethane’s restricted market. All this makes for an export commodity that stands apart. Today, we review the evolution of U.S. ethane exports and the challenges to export growth posed by the U.S./China trade war.
As we said a few months ago in Send It to Me, ethane — the lightest of the NGL “purity products” — can either be “rejected” into the natural gas stream at the gas processing plant and sold (at the price of gas) for its Btu value or extracted from mixed NGLs (through fractionation) like its purity-product brethren and sold to steam crackers (to produce ethylene and other petrochemical byproducts). But, with the rapid run-up in U.S. NGL production in the 2010s — and, with it, the increasing availability of ethane — a number of niche foreign markets for U.S.-sourced ethane have sprung up, providing NGL producers with new outlets for their product for boosting their bottom lines. Figure 1 shows U.S. ethane export volumes over the past five-plus years; the green layer shows exports via pipeline to Canada, and the blue layer shows exports by ship.