U.S. ethane production and exports are set to rise as petrochemical companies in Asia switch from naphtha to cheaper ethane feedstock. This shift comes amid shrinking profit margins in the chemicals sector.
Ethane is a natural gas liquid extracted mainly during natural gas processing. It is a key raw material used to produce ethylene, an essential component in the petrochemical industry.
Producers in countries like South Korea, Thailand, and China are increasingly turning to U.S.-sourced ethane because it costs less than naphtha. This trend is expected to boost demand for American ethane exports.
Thailand’s PTT Global Chemical (GC) plans to increase its ethane imports from the U.S. The move aims to help reduce Thailand’s trade deficit and potentially avoid steep U.S. tariffs on Thai goods when a tariff pause ends in July.
In March, PTT Global Chemical announced it would start using U.S.-imported ethane as an alternative feedstock in its Thai operations. CEO Narongsak Jivakanun said the plan would strengthen trade ties between Thailand and the U.S. and create a more balanced trade relationship.
Under a contract with Enterprise Products Partners L.P., PTT will receive 400,000 tons of ethane annually from the U.S.
The U.S. Energy Information Administration (EIA) reported record highs in U.S. ethane production, consumption, and exports in 2024. In its May Short-Term Energy Outlook, the EIA noted that China removed a retaliatory 125% tariff on U.S. ethane imports in late April. This tariff had been imposed earlier in the month.
With the tariff lifted, the EIA expects continued strong growth in U.S. ethane production and exports. It forecasts production will reach 2.9 million barrels per day (b/d) in 2025 and 3.1 million b/d in 2026, up from 2.8 million b/d in 2024. Most of this increase will be exported to meet growing international demand.
New petrochemical plants in Europe and Asia, such as Ineos’s Project One ethylene cracker in Antwerp, Belgium, and Wanhua Chemical’s flex-feed cracker in China, will also use ethane. This will further expand the global market for U.S. ethane, the EIA said.
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