Utopia Pipeline

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.

The availability of vast amounts of ethane from the nearby “wet” Marcellus and Utica plays is spurring a petrochemical rejuvenation in Sarnia, ON. Two years ago NOVA Chemicals stopped using naphtha as a feedstock at its 1.8 billion pound/year ethylene plant in Sarnia’s Chemical Valley and now relies on a combination of ethane, propane and butane. Next year the company is planning to complete the plant’s conversion to 100% ethane and is considering the possibility of building a big polyethylene plant nearby. Today, we continue our comprehensive review of southwestern Ontario’s NGL, petchem and refining infrastructure, including Sarnia’s NGL fractionation, storage and end-use markets.