U.S. exports of ethane and ethane-based petrochemicals rose 135 per cent from 2014 to 2023

This article was published by the US Energy Information Administration on Nov. 4, 2024.

By Jordan Young, Josh Eiermann

U.S. exports of ethane and ethane-based petrochemicals reached an all-time high of 21.6 million metric tons (MMmt) in 2023, up 135 per cent since the United States began exporting ethane in 2014 and 17 per cent more than in 2022, according to data from the U.S. Census Bureau. The rapid expansion of U.S. ethane and ethane-based petrochemical exports has been fuelled by the growth in domestic ethane production, which has increased with the country’s natural gas production and the buildout of export and production infrastructure.

Ethane is a natural gas liquid that’s primarily extracted from raw natural gas during processing. It’s mainly used as a feedstock for ethylene production, one of the most important building blocks in the petrochemical industry. Ethylene is a gas used to produce a wide range of products, including plastics, resins, and synthetic rubber.

All elements of the ethane value chain are produced in, consumed in, and exported from the United States, including ethane, ethylene, polyethylene, and other ethylene derivatives. We publish data on U.S. ethane production, exports, and product supplied (deliveries to domestic consumers); the U.S. Census Bureau publishes export data for ethane and ethane-derived products.

The volume of exports of U.S. ethane, ethylene, and various ethylene derivatives is affected by:

• U.S. demand
• U.S. production capacity and production costs
• Importing countries’ downstream processing capacity
• Availability of infrastructure necessary to move these products, which in some cases may require special handling such as cryogenic refrigeration

U.S. ethane exports

The United States started exporting ethane in 2014 via pipeline to petrochemical plants in Canada. In 2016, the United States began exporting ethane to countries in Europe from marine export terminals. U.S. ethane export capacity has increased since 2016 with the completion of two new pipelines and three more marine export terminals—Marcus Hook, Pennsylvania; Morgan’s Point, Texas; and Nederland, Texas. In addition, the number of destination countries continued to grow along with the fleet of specially built tankers.

U.S. ethane exports increased to a record high of 3.0 MMmt in 2023, up 12 per cent from 2022. In 2023, U.S. ethane was mostly exported to China, which accounted for 45 per cent (1.4 MMmt) of U.S. ethane exports, followed by India (16 per cent), Canada (14 per cent), Norway (9 per cent), and the United Kingdom (7 per cent).

U.S. ethane exports to China increased fastest between 2022 and 2023, rising 35 per cent last year. China’s Satellite Petrochemical has begun ethylene production at two new ethane crackers since 2021, which has increased domestic ethane demand in China. Ethane exports to Norway rose the second fastest, rising 32 per cent to 288,000 metric tons in 2023. Other importers of U.S. ethane include Belgium, Brazil, Canada, Mexico, and Sweden.

Ethane’s high ethylene yields and cost advantages over naphtha in ethylene production have driven export volumes of ethane higher since 2014. Most petrochemical crackers have some flexibility in switching between ethane and naphtha as a feedstock, depending on the relative profitability of each feedstock. In the United States, cracking ethane to produce ethylene has historically generated higher profit margins compared with the margins from cracking naphtha, the most common feedstock in Western Europe and East Asia. Global petrochemical manufacturers looking to secure low-cost ethane feedstock to produce ethylene are developing new petrochemical crackers and associated infrastructure.

U.S. ethylene exports

In the United States, ethane is heated in a steam cracker to break (crack) the ethane molecule to produce ethylene. Ethylene, like ethane, is exported in specialized tankers after being cryogenically cooled. The United States has two ethylene export terminals—Galena Park and Morgan’s Point—both located in Texas on the Houston Ship Channel.

Ethylene export volumes fell 9 per cent from 2022 to 2023 to 1.1 MMmt. In 2023, 36 nations imported U.S. ethylene. China was the largest importer of ethylene from the United States in 2023, accounting for 38 per cent (419,000 metric tons) of all exports. Belgium (19 per cent), Indonesia (16 per cent), Taiwan (6 per cent), and France (5 per cent) rounded out the top five.

As with ethane exports, China was also the fastest-growing destination for ethylene exports. In general, ethylene exports to Asia grew 77 per cent from 2022 to 2023, while exports to Europe fell by more than 50 per cent during the same period amid a weak macroeconomic environment.

U.S. ethylene prices remain at a discount to international prices on average, providing U.S. ethylene producers with a long-term cost advantage and resulting in expanded manufacturing capacity along the U.S. Gulf Coast.

U.S. ethylene-derivative exports

After ethylene is processed by a polymerization reactor or another production unit, petrochemical manufacturers can develop intermediate products such as:

• Low-density polyethylene (LDPE): a thermoplastic used for more flexible plastic products such as dispensing bottles, plastic bags, and trays
• High-density polyethylene (HDPE): a thermoplastic used for more rigid plastic products such as piping, water gallon jugs, cutting boards, and motor oil jugs
• Ethylene alpha olefins: used for products such as flexible packaging, molding, and car applications

The United States exported ethylene derivatives to over 100 nations in 2023. Unlike ethane and ethylene, which require cryogenic cooling to turn them from a gas to a liquid, ethylene derivatives do not require special handling and can be exported or imported through any port or overland route capable of handling containerized traffic.

Total U.S. ethylene-derivative exports grew 20 per cent to 16.9 MMmt from 2022 to 2023, led by a 69 per cent increase (2.2 MMmt) in exports to Asia. U.S. exports to Canada fell by 10 per cent to 1.5 MMmt; exports to Mexico grew 3 per cent to 2.4 MMmt in 2023. Until 2017, North American destinations, particularly Canada and Mexico, accounted for the largest share of U.S. polyethylene and other ethylene-derivative exports.

Canada and Mexico do not impose tariffs on exports of U.S. ethane-derived chemicals because of reciprocal free-trade agreements. These countries also benefit from proximity and being able to import these products over land at lower cost compared with waterborne imports. However, exports to overseas destinations have also grown since 2017, with the exception of 2021 when the global pandemic led to lower demand.