Ethane Supply/Demand

ST98

Updated March 2017

Figure S64.

Supply

  • Alberta ethane (C2) production from natural gas at processing facilities declined by an estimated one per cent in 2016 compared with 2015 and is expected to decline by 3 per cent by the end of the forecast period, as shown in Figure S6.4 [Tableau]. This is despite an increased focus on wet gas production, because producers are leaving ethane in the stream to realize a better natural gas price as a result of competition from imports.
  • Ethane produced from oil sands off-gas increased about 7 per cent in 2016 relative to 2015 and is projected to continue to gradually grow in response to the forecast increase in upgraded bitumen production, as additional off-gas is sent for processing.
  • Pembina’s Vantage pipeline imported an estimated 3.7 thousand cubic metres per day (103 m3/d)─23.4 thousand barrels per day (103 bbl/d)─of ethane to Alberta in 2016, and this number is projected to increase over the forecast period to meet Alberta demand.
  • Ethane production is expected to remain relatively stable over the forecast period, increasing slightly from 35.3 103 m3/d (223.5 103 bbl/d) in 2017 to 35.4 103 m3/d (224.1 103 bbl/d) in 2026.

Table S6.5

In 2016, ethane prices were relatively low, and producers chose to leave ethane in the gas stream and sell it as marketable gas to realize a better natural gas price reflecting the higher heating value of the gas stream. Table S6.4 [HTML] shows ethane production from Alberta is projected to remain relatively stable over the forecast period, reaching 35.4 103 m3/d (224.1 103 bbl/d) in 2026. This is due to producers continuing to leave ethane in the gas stream as a result of competition from increasing imports on the Vantage pipeline. Table S6.5 [HTML] shows ethane extraction volumes at gas plants in 2016.

Ethane from off-gas is projected to grow gradually based on the forecast for processed gas from upgraded bitumen production. Ethane from off-gas is forecast to increase from an estimated 1.5 103 m3/d (9.5 103 bbl/d) in 2016 to 2.3 103 m3/d (14.6 103 bbl/d) by 2026, shown in Figure S6.4 [Tableau].

Demand

  • In 2016, ethane demand remained relatively stable at an estimated 39.3 103 m3/d (248.8 103 bbl/d). Demand is forecast to reach 46.1 103 m3/d (291.8 103 bbl/d) in 2026, based on assumed continued investment in the petrochemical sector.
  • Since 2008, there have been no removals of ethane from the province and this is expected to remain the case over the forecast period.

The petrochemical industry in Alberta is the major consumer of ethane recovered from natural gas, with four ethylene plants using ethane as feedstock. The AER anticipates an increase in the demand for ethane in 2017 as a result of continued investment in processing capacity in the petrochemical industry. After 2017, gradual improvements are expected to be made to current facilities, enabling them to extract more ethane, and demand is projected to grow to 45.8 103 m3/d (289.9 103 bbl/d) by 2026.