US ethylene industry to expand 35% by 2017

The ongoing shale revolution will guide the US ethylene industry surge in the near future, growing by more than a third by 2017, according to a new report from business intelligence group GlobalData.

According to Thursday's report, US ethylene capacity dropped from 27.089 million tpy in 2000 to an estimated 26.137 million tpy in 2012.

However, increased investments in the industry will see this figure jump to 35.048 million tpy by 2017 – an increase of just under 35%.

In correlation with the recent surge in shale gas output, the production of natural gas liquids (NGLs) has increased significantly, the report notes. Ethane, a hydrocarbon almost exclusively used in petrochemical production, is a major component of NGLs and is cracked to produce ethylene.

In response, investors have been keen to be a part of an ethylene industry on the rise, and many major US ethylene producers are investigating the possibility of bringing new plants online with capacities of more than 1 million tpy in the near future.

Strong ethane production has also lowered prices and made the US petrochemicals industry much more competitive than in previous years, the GlobalData report says. 

Five years ago, the US was one of the most expensive places to produce ethylene, but the ethane-based US petrochemicals industry is now in a better position than the naphtha-based petrochemicals industries of Europe and Asia-Pacific, and second only to the Middle East in terms of production economy.

For more details on the GlobalData report, click here.

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