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Global Ethane Market Outlook


The Ethane Forecast 2022 is FGE’s detailed assessment of the mid/long-term operating environment for the global ethane trade. In this new study, we forecast ethane demand and review changing supply dynamics to identify the key factors at play in the rapidly evolving ethane market.

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Overview

The Ethane Forecast 2022 is FGE’s detailed assessment of the mid/long-term operating environment for the global ethane trade. In this new study, we forecast ethane demand and review changing supply dynamics to identify the key factors at play in the rapidly evolving ethane market.

The global growth of ethane cracking capacity will continue to drive global ethane trade, with the USA remaining the world’s biggest supplier. Much of the incremental planned and proposed capacity, including a number of projects on the Chinese mainland, in Europe, and elsewhere, is predicated on the growth of US supply and exports of ethane through the 2020s.

With US shale supply recovering from the prolonged impact of COVID-19, and with the war in Ukraine forcing policymakers to rethink the notion of energy security, US natural gas/LNG appears to be a winner, for now. While it is still unclear to what extent the fallout from Ukraine will water down the Biden administration’s Energy Transition policies, the focus seems to be shifting towards supporting US supply growth.

For now, high crude prices continue to benefit US exporters of ethane. Despite a weak petrochemical market, this will give support to upcoming petrochemical projects in China, Belgium and Mexico, which are expected to require an additional 3-4 mmtpa of US ethane by the late 2020s. How will the economics of merchant ethane crackers fare following this huge rise in ethane demand? Will a shift in US energy policy and production economics be able to support the global ethane trade throughout the 2020s and beyond?

If not, where might new destinations for US ethane exports emerge in the future? Maybe the Middle East? In order to keep pace with this growth and trade, how does the orderbook for Very Large Ethane Carriers (VLECs) look like?

Scope of Coverage

  • Key Areas Addressed in This Study
    • Global supply and demand projections until 2040 for markets both West and East of Suez, at a country level.
    • The potential for new sources of ethane exports from Russia and the Middle East and additional demand outlets in Asia Pacific.
    • Ethane trade flows into Asia, Europe and Latin America from the USA, with added focus on infrastructure (e.g. pipeline and export capacities) for managing flows.
    • On the demand side, we assess the growth of import-dependent ethane demand and how that will or might match the availability of seaborne export supplies in the long term.
    • Price competition of ethane relative to other feedstocks as a cracker feedstock given the rapid growth of steam cracker capacity in Asia Pacific, the Middle East and North America.
    • Shipping economics of transporting US ethane to key demand markets in Asia.
  • Structure
    • Part I: Global Ethane Trade
      • Introduction and Concepts
      • Summary
      • Global Trade Flows
      • The Future of Ethane Trade
    • Part III: Other Americas
      • Brazil, Canada, Mexico
      • Supply and Demand Fundamentals
    • Part V: Middle East
      • Iran, Qatar, Saudi Arabia, UAE
      • Supply and Demand Fundamentals
    • Part VII: Others
      • Oceania – Australia
      • Africa – Egypt
    • Part IX: Ethane Shipping
      • Introduction to Ethane Shipping
      • Current Fleet and Orderbook
      • Shipping Trade Routes
      • Bunkering
    • Part II: Ethane in the US
      • Production Outlook
      • Pipeline, Storage and Export Infrastructure
      • Ethane in Petrochemicals
      • Ethane Rejection and Exports
      • Pricing
    • Part IV: Europe
      • North Sea (UK and Norway) Supply
      • European Trade Flows and Demand
    • Part VI: Asia Pacific
      • China, India, Indonesia, Malaysia
      • Supply and Demand Fundamentals
    • Part VIII: Petrochemical Trends
      • Trends of Cracker Feedstock Dynamics
      • Cracking Economics
      • Pricing and Delivered Costs

 

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