You Ain’t Seen Nethane Yet—Ethane Exports Will Rise, But Will They Soar?
On Thursday, November 20, the ratio of ethane to natural gas hit its lowest point since 2005 – ethane only 64% of natural gas on a BTU basis. According to OPIS, the price of ethane in Mont Belvieu was 19.25 cents/gallon while natural gas at Henry Hub was $4.49/MMbtu. At this level it makes economic sense to reject as much ethane as possible. All the rest of the ethane that gets produced needs to find a use, a purpose, a home. Demand for ethane as a feedstock for the petrochemical industry will rise considerably as new ethane cracking capacity comes online, mostly in the 2017-19 period. Even so, ethane rejection is likely to remain commonplace for the foreseeable future. But what about ethane exports, not just to Canada but to Western Europe, Asia and other overseas markets? Today we update developments on the ethane export front.
