EIA: US to increase hydrocarbon gas liquids production in 2016

EIA anticipates propane exports will increase through 2017.

U.S. production of hydrocarbon gas liquids is expected to increase from 3.86 million barrels per day (bpd) in 2015 to 4.33 million bpd in 2017, according to the U.S. Energy Information Administration’s (EIA) Short-Term Energy Outlook. Hydrocarbon gas liquids are a group of products, including ethane, propane, butanes and natural gasoline.

Hydrocarbon gas liquids are produced at both natural gas processing plants and petroleum refineries. EIA says natural gas plants are expected to provide more than 95 percent of the forecasted hydrocarbon gas liquids production growth.

Between 2008 and 2015, hydrocarbon gas liquids production at natural gas processing plants, including fractionation facilities, increased as a byproduct of the growing supply of natural gas from shale gas and tight oil formations. In its Short-Term Energy Outlook, EIA expects hydrocarbon gas liquids production growth to continue to outpace natural gas production growth in 2016 and 2017 as more hydrocarbon gas liquids infrastructure projects are completed.

According to EIA, ethane production is expected to increase at a faster rate than other hydrocarbon gas liquids in 2016 and 2017, as expanded petrochemical and export capacity will provide new outlets for supply and for more ethane to be recovered from raw natural gas. EIA forecasts that natural gas plant ethane production will increase by 300,000 bpd between 2015 and 2017, accounting for two-thirds of total hydrocarbon gas liquids production.

EIA reports the U.S. became a net exporter of natural gasoline in 2008, of butane and propane in 2011 and of ethane in 2014. Annual average net propane exports increased from 10,000 bpd in 2011 to an estimated 500,000 bpd in 2015, as the capacity to export LP gases increased by almost 1 million bpd.

In its Short-Term Energy Outlook, EIA expects net propane exports to increase to 640,000 bpd in 2016 and to 740,000 bpd in 2017, as exports ramp up at two Gulf Coast terminal projects that began operating in the second half of 2015 and at another project scheduled to come online in the second half of 2016.