American Oil and Gas Reporter - October 2016 - 83

SpecialReport: Natural Gas Update
eight years after it was mothballed, explains Gordon Milne, Grangemouth operations director.
In 2008, with the KG ethylene cracker
unable to operate at full capacity, INEOS
was left with no option but to close the
second train, according to Milne. He says
the U.S.-supplied ethane will be used as
a supplementary feed for the ethylene
plant to allow it to operate both trains
and increase capacity.
"We are now in great shape to receive
shale gas from the United States to finally
run the Grangemouth plant at full rates,"
Milne comments. "All the parts of the
jigsaw finally are coming together and
Grangemouth soon will be back in the
premier league of European petrochemical
plants."
Increased Ethane Recovery
The U.S. Energy Information Administration says it has collected monthly
data on natural gas heat content by state
since 2013. Because ethane's heat content
exceeds that of methane, a natural gas
stream with higher heat content often in-

dicates that ethane is being rejected, or
left in the natural gas. The heat content
of natural gas in states that receive gas
produced from the Marcellus and Utica,
such as Ohio, Maryland, Delaware and
Pennsylvania, consistently had been reported at or above national average levels.
"However, since early 2016, the natural
gas has trended downward, indicating
that producers increasingly have been
extracting ethane," EIA states in a report.
"The lower heat content has coincided
with the start of ethane exports from
Marcus Hook, which sources all of its
ethane from the Marcellus and Utica."
From 2010 to 2015, ethane's share of
total natural gas plant liquids (NGPL)
production dropped from 42 to 34 percent,
according to EIA. It goes on to say that,
although other NGPLs have found ready
markets close to key shale plays, the lack
of pipelines and local markets for ethane
in these areas has limited recovery. With
more export capability and growth in domestic petrochemical demand, the agency
predicts more ethane will be recovered

and brought to market.
EIA projects that NGPL production
will continue growing, from 3.6 million
barrels a day in May 2016 to 4.0 MMbbl/d
in December 2017, with ethane representing nearly half of the total increase
in NGPL production.
"Although an expectation of increasing
oil prices and an associated increase in
NGPL prices contributes to the outlook,
a major driver of increased ethane production is growth in ethane demand, both
within the United States and internationally," EIA concludes.
❒

Coming In November
AOGR's Northeast Activity profile
turns to leading Marcellus and Utica
players to identify optimal drilling and
completion practices, including lateral
lengths, numbers of horizontal wells
per pad, frac stage spacing, the volumes of proppant pumped, and water
management/recycling strategies.

ws
Flo
n
io

ere
Wh

at
ov
n
In

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OCTOBER 2016 83


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Table of Contents for the Digital Edition of American Oil and Gas Reporter - October 2016

Contents
American Oil and Gas Reporter - October 2016 - Cover1
American Oil and Gas Reporter - October 2016 - Cover2
American Oil and Gas Reporter - October 2016 - Contents
American Oil and Gas Reporter - October 2016 - 4
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American Oil and Gas Reporter - October 2016 - Cover3
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