Additional Feedstock for Ethylene Production

Ethylene derived from ethane will remain the preferred source with lower- cost ethane in the Middle East and North America responsible for the enormous increase in the capacity of polyethylene in the future. For example, the Middle East added about 20 billion poimds of new ethane-based polyethylene capacity between 2008 and 2012 [22]. 

The Burns McDonnell company headquartered in Kansas City, Missouri, provides a wide variety of consulting services. A recent report by M. W. Lockhart and E. Robertson, Shale Gas Boom - A New Era of Technology for Ethylene and Ethylene Derivatives, presents an excellent discussion on the impact of new sources of natural gas-based ethane in North America on the cost and location of future ethylene and polyethylene capacity expansions in North America [23]. 

This report forecasts the addition of about 40 million metric tons/year of ethylene capacity expansions in North America by 2018, and an additional 45 million metric tons of ethylene capacity by 2030, due to low-cost ethane supplied from shale-based natural gas liquids. 

Because as much as 50-70% of this new ethylene capacity will be used for the manufacture of polyethylene, this new ethylene capacity will make North America a significant polyethylene export region similar to the Middle East. If the 2030 ethylene forecast is reached, then about 60 million metric tons of additional polyethylene capacity will be available by 2030, mostly for the export market. 

This North American ethylene expansion will be driven by the cost advantage of ethylene produced from ethane compared to ethylene manufactured from naphtha, which will remain the primary source of ethylene in other regions of the globe. The Burns McDonnell report estimates the cost of ethylene in the Middle East at 5-15 cents/lb. North American ethane-based ethylene at 20-30 cents/lb, and naphtha-based ethylene at 50-60 cents/lb. Finally, the Burns McDonnell forecast estimates an investment of about 120 billion (USD) in new ethylene capacity in North America from 2013-2030. 

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