US natural gas plant liquids (NGPL) production has almost doubled since 2010, surpassing the natural gas production growth and set an annual record of 3.7 million barrels per day (b/d) in 2017, EIA reports.
NGPLs accounted for a growing share of marketed natural gas production between 2010 and 2017, making up 15% of total marketed production in 2017 in energy content terms, up from 11% in 2010. The growing NGPL production can be explained due to expanded capacity to produce, transport, and consume NGPL products.
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Moreover, natural gas plant operators may leave a little amount of NGPLs in dry natural gas. Natural gas specifications set by pipeline operators enable significant amounts of ethane to be left in dry gas. If ethane prices are low in comparison to the price of natural gas, more ethane is likely to be left in the dry natural gas stream, if the mix can still meet specifications required by natural gas pipeline operators.
As for ethane, two US ethane export terminals opened in 2016, and two US ethane-consuming petrochemical plants opened in 2017, adding more sources of demand. Annual average US NGPL production grew almost 400,000 b/d between 2015 and 2017, and 175,000 b/d of this increase was driven by growth in ethane production.
A number of petrochemical plants are to start operations in the US in 2018 and 2019, increasing ethane demand and prices. During the first-quarter of, 2018 US ethane production was 260,000 b/d higher than the first-quarter 2017 level.
Ethane production is expected to increase by 440,000 b/d more between the first quarter of 2018 and the fourth quarter of 2019, according to EIA’s Short-Term Energy Outlook, amounting for 86% of the growth in NGPL production.
