Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you a link to reset your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you a link to reset password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Natural Gas | Petrochemicals

Perry, US DOE lend support to creation of petrochemical complex in Appalachia

Commodities | Energy | Coal | Electric Power | Natural Gas | Oil | Crude Oil | Shipping | Coronavirus

Market Movers Americas, Oct 26-30: US refinery earnings to shed light on demand recovery

LNG | Natural Gas | NGL

Platts LNG Alert

Commodities | LNG | Natural Gas | NGL | Financial Services | Infrastructure & Utilities

Gas Storage Outlook Conference, 18th Annual

Natural Gas | NGL | Oil | LPG | Petrochemicals | Olefins

US LPG arrival to Asia in Nov seen up to 2.1 mil mt on minimal disruptions

Perry, US DOE lend support to creation of petrochemical complex in Appalachia

Highlights

If Appalachia were a country, it would be third-largest gas producer

US production of NGLs expected to double by 2050

Houston — The US Department of Energy projects Appalachian Basin ethane production will surge to 640,000 b/d by 2025, more than 20 times 2013 levels, leading Energy Secretary Rick Perry to push for a petrochemical storage hub in the region.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

A 91-page report to Congress, which DOE published Tuesday, highlights the potential for the development of an ethane storage hub in the region to take advantage of the low-cost natural gas and natural gas liquids produced from the Marcellus and Utica shales.

In comments made to the National Petroleum Council in Washington, Perry said the US needs to diversify its petrochemical infrastructure beyond Texas and Louisiana. He said an Appalachian ethane storage hub would complement, not compete with, Gulf Coast producers.

"If the Appalachian region were its own country, it would be the third-largest gas producer in the world," Perry said. "The potential raw product is there, and they have particularly wet NGLs that can be separated, value added." The establishment of an Appalachian Basin ethane storage and distribution hub in the heart of the Marcellus and Utica plays "could provide benefits to the broader petrochemical and plastics industries along the lines of supply diversity," the report says. "The present-day geographic concentration along the Gulf Coast of petrochemical infrastructure and supply may pose a strategic risk, where severe weather events limit the availability of key feedstocks."

Perry said one of his great fears as Texas governor was a Category-5 hurricane moving up the Houston Ship Channel and the "stunning impact" it would have on the region's energy infrastructure, shutting as much as 95% of petrochemical operations.

"Someday the potential for that to occur is real," he said. "For us to be at this moment in time where we have the potential to diversify our petrochemical footprint, I think would be very inopportune for us to miss this opportunity."

US NGL PRODUCTION TO DOUBLE

According to the report, US NGL production is expected to nearly double between 2017 and 2050, supported by an increase in global petrochemical industry demand. The largest increases are expected to occur over the next 10 years, driven by crude oil and gas production from the Marcellus and Utica plays in the northeastern US and from the Permian Basin in the Southwest. By 2050, the two regions are forecast to account for more than 60% of total NGL production in the US, the report says.

Data from the US Energy Information Administration projects ethane production in the East region to continue to grow rapidly in the coming years.

"Projected production in 2025, at 640,000 b/d, is more than 20 times greater than regional ethane production in 2013," the report said. "By 2050, ethane production in the region is projected to reach 950,000 b/d."

The report bolsters the case for the creation of a second major US petrochemical storage and distribution hub, to supplement the Gulf Coast regional hub in Mont Belvieu, Texas. Advocacy groups promoting the concept, such as Shale Crescent USA, cheered Tuesday the release of the DOE report and Perry's strong endorsement.

"The DOE report solidifies the notion that diversifying America's petrochemical manufacturing base -- and investing in a second petrochemical hub in the Shale Crescent USA -- would increase our global petrochemical market share, while better and more reliably fulfilling domestic demand," Shale Crescent USA Co-founder Jerry James said in a statement.

-- Jim Magill, jim.magill@spglobal.com

-- Meghan Gordon, meghan.gordon@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com