US ethane output to rise 27% by 2017; olefins turnarounds to peak in April

Petrochemicals news you need to know.

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US ethane production to rise on new petchems construction, exports

Ethane production in the US is expected to grow from 1.1 million barrels per day (b/d) in 2015 to 1.4 million b/d in 2017 as petrochemical output and exports grow over the next few years, according to the US Energy Information Administration’s (EIA) Short-Term Outlook for Hydrocarbon Gas Liquids (HGLs) published in March.

Between 2015 and 2017, natural gas plant production of HGLs is forecast to increase by 450,000 b/d, with increased ethane production accounting for 66% of the growth on the back of investments in a wave of ethane-consuming petrochemical plants and export facilities.

The EIA projects ethane production to increase by 140,000 b/d in 2016 and by 160,000 b/d in 2017, compared with annual average growth of 50,000 b/d in 2008-2015.

Ethane consumption, production and net exports (2011-17)

Total production includes both natural gas plant production and refinery and blender net production. Differences between total consumption plus exports and total production are attributable to stock changes. Source: US Energy Information Administration, Short-Term Energy Outlook, March 2016.

The EIA expects ethane consumption, which was flat in 2015, to increase by 50,000 b/d in 2016 and by 80,000 b/d in 2017 (see figure below). Net exports are forecast to grow by 80,000 b/d in 2016 and 90,000 b/d in 2017, compared to growth of 30,000 b/d in 2015.

Ethane export capacity and net exports, quarterly 2014-17

Refinery Outages

Planned refinery maintenance in the US during the first half of 2016 is not expected to adversely affect the supply of gasoline, jet fuel and distillate fuel, according to an EIA report published on March 23.

Planned maintenance for atmospheric crude distillate, fluidized catalytic cracking and reforming capacity is very light in the East Coast (PADD 1) region in H1 2016. The planned outages will result in estimated production loss that accounts for only 2.9% of the existing gasoline inventory, 1% of the jet fuel inventory, and 1.2% of the distillate inventory, and could be covered by existing product inventory.

Planned maintenance in the Midwest (PADD 2) is concentrated from March to May and will result in moderate production loss of petroleum products from February to June. The high planned outages of reforming capacity could tighten the octane supply.

Planned maintenance on the Gulf Coast (PADD 3) will cause moderate production loss in petroleum products, accounting for 33% of the existing gasoline inventory, 18% of the jet fuel inventory, and 21% of the distillate inventory. According to the EIA, there may be a need to divert exports from the US Gulf Coast to domestic markets to offset the lost output.

Gulf Coast (PADD 3) production losses as a result of planned outages

Planned outages in the Rocky Mountains (PADD 4) will be moderate and concentrated in February-April but will require supply from other regions to offset the lost production.

On the West Coast (PADD 5), planned outages between February and June will result in petroleum production losses accounting for 66% of the existing gasoline inventory, 47% of the jet fuel inventory and 20% of the distillate fuel inventory. This will require imports of gasoline and jet fuel to ensure adequate supplies during the maintenance period.

Dow, CP Chem, LyondellBasell delay turnarounds

Dow Chemical has pushed back the planned turnaround of its LHC-3 unit in Plaquemine, Louisiana, from early April to the third quarter, IHS Chemical Week reported.

Despite the Plaquemine delay, April and May will still have a substantial amount of capacity off-line. April is expected to have the highest amount of offline olefins capacity in 2016 after several delays in planned turnarounds in February and March.

Turnaround and expansion work at LyondellBasell's cracker in Corpus Christi, Texas, which was originally planned for February, has been postponed until mid-April and is expected to last through July.

In mid-March, Chevron Phillips' #24 Sweeny cracker in Texas began its turnaround, which is expected to run through the end of April.

Meanwhile, the company has reached a final investment decision to expand the low-viscosity polyalphaolefins (PAO) capacity at its Cedar Bayou plant in Baytown, Texas by 10,000 tpa, or about 20%, the company announced on March 29.

Construction on the project will begin in April and the facility is expected to start up by mid-2017. Feedstocks for the project will come from the company’s recent 100,000 tpa expansion of normal alpha olefins (NAO) capacity at its Cedar Bayou plant.