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Market Snapshot: Western Canadian petrochemical demand for ethane at an all-time high
Release date: 2017-07-12
Ethane is a natural gas liquid obtained as a by-product of natural gas processing and oil refining. Ethane is the primary input for producing ethylene, a petrochemical used to manufacture plastics and other industrial and consumer products. Ethane demand in western Canada is driven by the petrochemical production facilities located in Alberta, and this reached an estimated all-time high of 280 thousand barrels per day (Mb/d) during the first quarter of 2017.
This growing Alberta demand has been met through a combination of increased domestic production and imports from the U.S. Western Canadian ethane production has increased since 2012 because of growing unconventional, liquids-rich gas production in Alberta and British Columbia.Footnote 1 Oil sands off-gas ethane extractionFootnote 2 has also increased. With regard to imports, the Vantage pipeline began shipping ethane from North Dakota to Alberta in 2014. Flows on Vantage have averaged 22 Mb/d since 2015.
Source and Description
Description: This combined stacked area and line graph shows historical ethane production, ethane imports, and estimated petrochemical demand in western Canada from 2000 to 2017. Data for 2017 is for the first quarter of the year. Western Canadian ethane demand averaged 212 in 2000, reached 258 Mb/d in 2004, and then fell to 214 Mb/d in 2010 before increasing to a record high of 280 Mb/d in the first quarter of 2017. This demand was supplied entirely by western Canadian ethane production until 2014, when the Vantage pipeline began importing ethane into Alberta. These imports have averaged 22 Mb/d since 2015.
Alberta’s four petrochemical plants have a total ethylene-producing capacity of 4.1 million tonnes per year.Footnote 3 One of these plants is located in Fort Saskatchewan. The other three are located in Joffre and combine to form the world’s second largest ethylene complex. Together, these four Alberta plants account for almost 80% of Canada’s total installed ethylene-producing capacity, with the remaining 20% located near Sarnia, Ontario.
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