US production of hydrocarbon gas liquids (HGL)—a group of products that includes ethane, propane, butanes, and natural gasoline—is expected to increase from 3.86 million b/d in 2015 to 4.33 million b/d in 2017, according to the US Energy Information Administration’s most recent Short-Term Energy Outlook (STEO).
HGLs are produced at both gas processing plants and refineries, but gas plants are expected to provide more than 95% of the forecast production growth, EIA said.
Between 2008 and 2015, HGL production at gas processing plants, including fractionation facilities, increased as a byproduct of the growing supply of gas from shale and tight oil formations.
Also, projects that increased the capacity to produce, store, transport, export, and consume HGLs enabled the supply of HGLs to expand at a faster rate than gas production. HGL production growth will continue to outpace gas production growth in 2016 and 2017 as more HGL infrastructure projects are completed.
“Ethane production, which was constrained by lack of demand and low prices in recent years, is expected to increase at a faster rate than other HGLs in 2016 and 2017, as expanded petrochemical and export capacity provides new outlets for supply and allows more ethane to be recovered from raw natural gas,” EIA said.
According to the agency’s forecast, US gas plant ethane production will increase by 300,000 b/d between 2015 and 2017, accounting for two thirds of total HGL production growth.
Meanwhile, the US, which was a net importer of all HGL products in 2007, became a net exporter of natural gasoline in 2008, of butane and propane in 2011, and of ethane in 2014. Annual average net propane exports increased from 10,000 b/d in 2011 to an estimated 500,000 b/d in 2015, as liquefied petroleum gas export capacity, including propane and butanes, increased by almost 1 million b/d.
Net propane exports are expected by EIA to increase to 640,000 b/d in 2016 and to 740,000 b/d in 2017, as exports ramp up at two Gulf Coast terminal projects that began operating in the second half of 2015, and at another project scheduled to come online in this year’s second half.
In March, the first waterborne shipment of ethane left the US from ethane export facilities at Marcus Hook, Pa. A second ethane export facility is expected to open in this year’s third quarter at Morgan’s Point, Tex. EIA projects net ethane exports to rise by 80,000 b/d in 2016 and by 90,000 b/d in 2017 as exports ramp up at these terminals.