US hydrocarbon gas liquids production reaches 5Mbpd

MOSCOW (MRC) -- US production of hydrocarbon gas liquids (HGLs) reached 5 million barrels per day (Mbpd) in 2018, an increase of more than 0.5 Mbpd (13%) over 2017 levels. HGLs accounted for over a quarter of total US petroleum products output in 2018, as per Hydrocarbonprocessing.

The increase in HGL production since 2010 is largely a result of growing domestic natural gas production. In 2018, US natural gas production, measured as gross withdrawals, averaged 101.3 billion cubic feet per day (Bcf/d), a 38% increase over 2010 levels and the highest volume on record. As natural gas production has grown, an increasing share of HGLs are produced at natural gas processing plants, from about 75% in 2010 to nearly 90% in 2018.

HGLs produced at natural gas processing plants are called natural gas plant liquids (NGPL), which include ethane, propane, normal butane, isobutane, and natural gasoline. A smaller share of HGLs are produced at petroleum refineries, which include refinery olefins and refinery liquefied petroleum gases (LPG). HGL production has been relatively flat at petroleum refineries since 2010, averaging about 630,000 b/d.

Ethane and propane account for two-thirds of HGL production. Ethane production reached 1.71 million b/d in 2018, a 20% increase over 2017 levels. Ethane, the lightest NGPL, can (within some limits) be left in the processed natural gas stream at natural gas processing facilities—a process called ethane rejection—or it can be recovered from natural gas if ethane’s value is sufficient to cover the additional costs to produce and distribute the ethane to markets.

Demand for ethane in 2018 was driven by increased use in the petrochemical sector, which converts ethane into ethylene for use in the production of plastics, resins, and fibers that go into the production of many consumer goods. Several new petrochemical crackers were commissioned in the United States in 2018. Chevron Phillips Chemicals and ExxonMobil each commissioned facilities that process an estimated 90,000 b/d of ethane as feedstock. Indorama Ventures commissioned a smaller petrochemical cracker estimated to consume 20,000 b/d of ethane as feedstock.

International demand for ethane also increased, and new export infrastructure—the 50,000 b/d Utopia pipeline to Canada—has increased the capacity to ship ethane abroad.

Besides the petrochemical sector, where demand growth has been robust, the capacity of the U.S. domestic marketto consume HGLs has not expanded at the pace of growing supply. The international market has become the preferred destination for most of the incremental growth in US HGL production. HGL exports have been growing rapidly, particularly for propane, increasing 14% over 2017 levels. In 2018, nearly a third of U.S. HGL production was exported.

Propane production grew from 1.54 million b/d in 2017 to 1.70 million b/d in 2018, a 10% increase. Changes in domestic demand for propane, which is used in the residential and commercial sectors as a heating and cooking fuel and in the industrial sector as a petrochemical feedstock, are mostly driven by weather and consumption. Propane demand has been fairly flat on an annual basis in recent years.

US production of butanes, natural gasoline, and refinery olefins also increased in 2018. Domestic markets for normal butane, isobutane, and natural gasoline have experienced relatively slow growth, meaning much of the production increase has been exported.
MRC

MOSCOW (MRC) -- South African petrochemicals firm Sasol Ltd said that a second unit at its US ethane cracker project came online last week, reported Reuters.

The company’s Lake Charles Chemicals Project (LCCP), which will convert natural gas into plastics ingredient ethylene, said the plant started producing ethylene oxide on May 31.

As MRC informed before, in March 2019, Sasol Ltd., the world's biggest maker of fuel from coal, said the cost of its giant Lake Charles chemicals project in Louisiana will balloon to as much as USD12.9 billion, or about 50% more than initially planned.
MRC

MOSCOW (MRC) -- Norwegian oil workers and their employers have extended their pay talks past a midnight deadline in a bid to avert a strike that would reduce the country’s oil and gas output, reported Reuters with reference to negotiators.

The Lederne trade union has threatened to strike at offshore fields operated by Equinor, Aker BP and others, which the oil firms said would curb production by some 440,000 barrels of oil equivalents per day.

The deadline for the wage talks had originally been set to midnight on Monday (2200 GMT).

As MRC informed before, in March 2018, Norway’s Statoil announced plans to change its name to Equinor, reflecting its commitment to become a broad energy company rather than one focused only on oil.
MRC

MOSCOW (MRC) -- France’s Total declared force majeure on the production of jet fuel at its Leuna refinery in Germany following the supply of contaminated crude from Russia, reported Reuters.

"We have declared Force Majeure on the jet fuel from the Leuna refinery," a Total spokeswoman said.

The spokeswoman said that due to ongoing problems with crude supply through the Druzhba pipeline, the Leuna refinery was still operating at a reduced rate using crude oil from stocks and alternative supply routes via Gdansk port."

"Total is making its best efforts to limit the effect on the supply of petroleum products to customers and service stations thanks to additional supply channels."

As MRC informed previously, in December 2017, Total inaugurated the new units at its Antwerp integrated refining & petrochemicals platform, which had progressively started up in the previous few months.
MRC

MOSCOW (MRC) -- Four units are down at Cameroon’s only refinery, but the shortage will be covered by imports starting on Tuesday, reported Hydrocarbonprocessing with reference to the energy minister's statement.

As MRC informed earlier, the 42,000 barrel-per-day Sonara refinery in Limbe declared a force majeure on Saturday after a tank exploded, causing a fire that halted output.

"Flames consumed four of the 13 production units, stopping all the Sonara refining process," Minister of Water Resources and Energy Gaston Eloundou Essomba said. "The market will remain supplied by imports."

Sonara, which is almost entirely state owned apart from a 4% stake held by Total, has a capacity of 2.1 million tonnes of crude a year. It serves the whole country, so any delay in getting it back up and running has the potential to cause severe fuel shortages.

As MRC wrote before, in December 2017, Total inaugurated the new units at its Antwerp integrated refining & petrochemicals platform, which had progressively started up in the previous few months.
MRC