You're the One That I Want - Steam Cracker Feedstock Selection In Changing Times
The Shale Revolution has had a profound impact on U.S. NGL markets by vastly increasing production and by lowering NGL prices relative to the prices of crude oil and natural gas. That has been good news for the nation’s steam crackers, the petrochemical plants that have enjoyed low NGL feedstock prices since 2012. But NGL markets are in for some big changes as new U.S. steam crackers coming online over the next two years will be competing for supply with export markets, raising the specter of higher NGL prices—a good thing for NGL producers, but not so for petrochemical companies. How this plays out will be determined by the feedstock supply decisions petrochemical producers make as NGL prices respond to rapidly increasing demand. Today we begin a series on how steam cracker operators determine day-by-day which feedstocks are the most economic, and on the factors driving the value of ethylene feedstock prices.
