US Ethylene Export Report 2016-2020

  • ID: 3993753
  • Report
  • Region: United States
  • 68 Pages
  • FC Business Intelligence Ltd.
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North American Polyethylene Production Will Increase to Over 54 Billion Pounds Per Year by 2020


  • Axiall/Lotte
  • Chevron Phillips
  • ExxonMobil
  • Oxichem/Mexichem
  • Sasol
  • Shin-Etsu
  • MORE
  • Trade Flows
  • US ethylene production capacities and export volumes
  • Price Forecasting
  • Regression analysis and scenario modelling of prices to 2025
  • Export Costs
  • Shipping, packaging and logistics costs for key export markets

Innovations in oil and gas drilling have led to lower production costs for crude oil and natural gas in the US, leading to surpluses of ethane and ethylene supplies. Surplus ethane output is expected to reach nearly 700,000 barrels per day by 2020, even after the commissioning of new ethylene production capacity. The new additional ethylene production capacity planned by 2020 is projected at more than 10million metric tons. In the same time frame over 8 million metric tons of new additional polyethylene production capacity is announced to come online. However, to date, few U.S. firms have marketed significant amounts of ethane or ethylene to international buyers other than Canada or Mexico, to whom export is made via pipeline.

Lack of infrastructure in maritime transport for these commodities has been a key barrier to international buyers, but logistics infrastructure is being constructed near-term to overcome this barrier. The first ever significant volume U.S. ethane-export terminals are scheduled to operational within two years. Sunoco Logistics is commissioning their first phase new terminal at Marcus Hook, PA, at the end of 2015 with a throughput capacity of exporting 800,000 tons of ethane per year. They will commission a second train in this facility in the 4th quarter 2016 increasing capacity to a total of 1.4 million tons per year. Enterprise Products Partners plans to commission a second ethane export terminal at Morgan’s Point, TX, in 3rd quarter 2016 with a capacity of 4.1 million tons per year.

Both facilities are located so as to capitalize on the considerable shale gas production resources and the ethane supply glut is estimated to exceed 5 million barrels per day surplus between 2016 and 2020. Ethane maritime shipping and global markets are currently in their infancy, analogous to liquid natural gas markets 15 to 20 years ago. This study reveals there are both challenges and opportunities for U.S. ethane export.

To date, the U.S. has a single ethylene export terminal on line, though the terminal has shipped relatively small annual volumes since commissioning. The terminal is located at the Targa Resources’ Houston terminal, and a single exporter controls the terminal. The increased production of U.S. ethylene and the associated investment in new U.S. polyethylene capacity will increase North American polyethylene production to over 54 billion pounds per year by 2020, up from 44 billion pounds as of the end of 2014. This increase assumes 75% of the announced polyethylene projects are actually built and commissioned by 2020.

In addition, industry sources cite the potential addition of another 2 billion pounds of capacity over this time frame. The significant U.S. ethylene supply and U.S. ethylene feedstock cost advantages will increase U.S. polyethylene production beyond domestic demand and support export volumes over the period. Excess North American polyethylene production available for export will be 6–9 billion pounds within the 2016–2020 time frame, assuming 75% of the announced polyethylene projects are actually built and commissioned by 2020.The logistics infrastructure to transport polyethylene internationally in containers is well established and investments to support significant increase in polyethylene container exports from the U.S. focus on shipping container, product packaging, and container loading capacity improvements.

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  • Axiall/Lotte
  • Chevron Phillips
  • ExxonMobil
  • Oxichem/Mexichem
  • Sasol
  • Shin-Etsu
  • MORE

Industry and Market Overview
Export Logistic
U.S. Market Fundamentals
Price Forecast – Ethane, Ethylene, Polyethyle
Reference Case Resul 
Low Oil Price Case
High Oil Price Case
U.S. Ethylene Export Volumes and Infrastructure
International Market Fundamentals  
Import Demand 
Ethylene prices in Europe Forecast
Import Balance and Forecast
Import Logistics and Infrastructure
Ethylene Carrier Fleet 
Ethylene Freight Rate 
Competitiveness of U.S. Exports
Total Export Cost
U.S. Terminal and Throughput Cost Estimation for Ethane and Ethylene 
Throughput Costs for Other Products at U.S. Ports 
Throughput Cost Estimation for U.S. and International Port
Ethylene Terminal Cost Comparison . 
Feedstock Trade-Of 
U.S. Export Economic Analysis 

List of Tables
Table 1 Product Yield by Feedstoc
Table 2 Ethane Export Contracts Announced To Date
Table 3 Announced U.S. Ethane Cracker Expansion
Table 4 Reference case monthly Ethane, Ethylene, LDPE and HDPE Pricing forecast 
Table 5 Reference case yearly Ethane, Ethylene, LDPE and HDPE Pricing forecast
Table 6 Low Oil Price Case Ethane, Ethylene, LDPE and HDPE Monthly Pricing Forecas. 
Table 7 Low Oil Price Ethane, Ethylene, LDPE and HDPE Yearly Forecas
Table 8 High Oil Price Case Monthly Ethane, Ethylene HDPE and LDPE Pricing Forecas .
Table 9 High Oil Price Case Ethane, Ethylene HDPE and LDPE Yearly Pricing Forecas  
Table 10 U.S. Ethane Export Terminal. 
Table 11 U.S. Ethane Sale Contract   
Table 12 Feedstock Demand and Supply Forecast 2012 to
Table 13 U.S. Polyethylene Projects 
Table 14 U.S. Ethylene Export in 2015 through Targa Terminal, Houston, TX
Table 15 Largest Ethylene importing countries in 1,000 to  
Table 16 Ethylene International Trade Summary (1,000 Ton  
Table 17 Short-Haul Long-Term Ethylene Trades
Table 18 Long-Haul Ethylene Long-Term Trades
Table 19 Ethylene long haul trade (1,000 tons
Table 20 Ethylene prices in Europe January 2015 to December
Table 21 10-year ethylene price in Europe forecast 
Table 22 Major Ethylene Import Terminals
Table 23 European Ethane Import Infrastructure Cost 
Table 24 Reference Case Margin 
Table 25 Low Case Margin
Table 26 High Case Margin

List of Figures
Figure 1 Steam Cracker Feedstock Sources
Figure 2 Steam Cracker Cost as a Function of Feedstock Weight
Figure 3 Ethane feedstock product yiel.
Figure 4 Naphtha Feedstock Product Yield
Figure 5 Ethane Price 18-Month Forecas . 
Figure 6 Ethane Price Ten-Year Forecast 
Figure 7 Ethylene Price Eighteen-Month Foreca 
Figure 8 Ethylene Price Ten-Year Forecas . 
Figure 9 High Density Polyethylene Price Eighteen-Month Forecas
Figure 10 High Density Polyethylene Price Ten-Year Foreca  
Figure 11 Low Density Polyethylene Price Eighteen-Month Forecas
Figure 12 Low Density Polyethylene Price Ten-Year Forecas  
Figure 13 Ethylene Production by Feedstock in U.S. 2012 to 2015
Figure 14 U.S. Ethylene Exports 2001–2015
Figure 15 Quarterly U.S. Ethylene Export 2010–2015 by Destinatio
Figure 16 Global Cracker Capacity by Region 
Figure 17 Long Haul Ethylene Import by Region
Figure 18 Global Ethylene Trade 2010 to 2015
Figure 19 Regional Ethylene Trade 2010
Figure 20 Ethylene Prices in Europe and Nonlinear Estimation with Interaction Ter  
Figure 21 Ethylene Price Forecasts 
Figure 22 Ethylene prices in Europe 2015 to 2020 
Figure 23 Total Ethylene Trade vs. Brent Crude Pri
Figure 24 Liquefaction and Throughput Cost Benchmarks for U.S. Ports  
Figure 25 Project Investment and Corresponding Throughput/USD/Ton Cos   
Figure 26 Margin Flow Proce 
Figure 27 Domestic Feedstock Margin Calculatio
Figure 28 Imported Feedstock Margin Calculatio
Figure 29 U.S. Reference Case Ethylene Export Margin Forecast By Feedstock 
Figure 30 U.S. High Case Ethylene Export Margin Forecast By Feedstock 
Figure 31 U.S. Low Case Ethylene Export Margin Forecast By Feedsto
Figure 32 Ethane margin breakdown by region

List of Appendices
Appendix 1 EIA National Average Natural Gas Composition Dat
Appendix 2 Ethane Forecast Based On Natural Gas Liquid & Crude Oil Production (August 2015-November 2016) 
Appendix 3 Annualized Production Of Ethane, Crude Oil, And Natural Gas Liquids (1000S Of Barrels) 1981–2014. 
Appendix 4 Crude Oil And Natural Gas Liquids Conversion From Quadrillion Btu To 1,000 Barrels/Year. 
Appendix 5 Report Estimation Methodology 

Table A Regression parameters from daily day
Table B Two-step methodology and assumption 
Table C Linear model parameter figures of merit for significance
Table D Regression Coefficient and MAE during Backward Stepwise Regression

Figure A EIA WTI Oil Forecasts by Case .
Figure B EIA Brent Oil Forecasts by Case
Figure C EIA Natural Gas HH Forecasts by Case
Figure D Ethylene Price in Europe (orange series) and Estimated Price Using Brent and Naphtha Prices in Europe

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  • Axiall/Lotte
  • Braskem
  • Chevron Phillips
  • Dow Chemical
  • ExxonMobil
  • Formosa
  • Oxichem/Mexichem
  • PTT/Marubeni
  • Sasol
  • Shell
  • Shin-Etsu
  • Total
  • Williams
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