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Updated June 2021

 

Ethane

In 2020

Production: Ethane production in Alberta declined in 2020 by 0.4 per cent from 2019, to an average 36.3 thousand cubic metres per day (103 m3/d) or 229.5 thousand barrels per day (103 bbl/d). This was the result of an overall decrease in raw natural gas production and lower recovery at straddle plants. Alberta’s ethane supply is sourced from raw gas production, oil sands off-gas, and imports.

Demand: Alberta demand remained flat at 42.0 103 m3/d (265.9 103 bbl/d) in 2020. Ethane is imported via the Vantage pipeline to meet petrochemical demand.

Forecast for 2021 to 2030

Production: The production of ethane is forecast to recover by 2022 and increase year over year, reaching 43.0 103 m3/d (272.0 103 bbl/d) by 2030. This gradual growth is in line with the production forecast for natural gas and lower ethane rejection throughout the forecast period, in line with increased petrochemical demand.

Demand: Demand for ethane is forecast to increase, reaching 48.5 103 m3/d (307.1 103 bbl/d) by 2030, assuming continued investment in the petrochemical sector and moderate growth in the processing capacities of current facilities.

Last year, the Government of Alberta announced another investment program, the Alberta Petrochemicals Incentive Program (APIP), which offers grants of up to 12 per cent of project capital costs. This is expected to strengthen the demand for ethane in the province, in addition to the Petrochemicals Diversification Program (PDP) announced in 2018, which offers companies up to Cdn$500 million in royalty credits for selected projects.

Figure S6.1 shows Alberta’s ethane supply and demand.

Propane

In 2020

Production: Alberta’s propane production in 2020 was 34.5 103 m3/d (217.1 103 bbl/d), a decline of 5 per cent from production in 2019.

Demand: Alberta’s demand for propane declined to 8.6 103 m3/d (54.3 103 bbl/d) in 2020, down 19 per cent from 2019, led primarily by a decline in industrial and agriculture demand.

Forecast for 2021 to 2030

Production: Propane production is projected to recover and increase, reflecting anticipated growth in natural gas production and continued targeting of liquids-rich areas by producers over the short term. It is forecast to increase from 36.1 103 m3/d (227.7 103 bbl/d) in 2021, to 42.0 103 m3/d (264.7 103 bbl/d) in 2030. This gradual growth is driven by higher yields and is in line with the production forecast for natural gas.

Demand: Propane demand is projected to grow to 18.4 103 m3/d (115.7 103 bbl/d) by 2030. Inter Pipeline announced last year that construction on their propane dehydrogenation facility has been delayed due to COVID-19 and will likely begin operations in early 2022.

Pembina and Canada Kuwait Petrochemical Corporation (CPKC) announced in late 2020 that their propane dehydrogenation and polypropylene complex, which was expected to begin operations in 2023, has been suspended indefinitely due to ongoing risks arising from the pandemic. However, demand for propane is still projected to grow in the forecast period due to anticipated new project announcements under the APIP and PDP programs.

Propane is exported by rail to the U.S. to meet agricultural and seasonal demand.

Figure S6.2 shows Alberta’s propane supply and demand.

Butane

In 2020

Production: Alberta butanes production remained flat in 2020, settling at 20.8 103 m3/d (131.2 103 bbl/d). Despite lower butanes prices and lower raw natural gas production, producers are still targeting gas from liquids-rich areas to produce natural gas liquids. Excess supply is assumed to be stored or removed from the province, including as a mix product such as liquified petroleum gas (LPG).

Demand: Demand in Alberta for butanes declined 11.8 per cent from 2019 as a result of a decrease in butane demand from refineries for blending.

Forecast for 2021 to 2030

Production: Production of butanes is expected to recover by 2022 then increase gradually and flatten towards the end of the forecast period, reaching 23.5 103 m3/d (148.2 103 bbl/d) as producers continue to target economically attractive liquids-rich gas areas such as the Duvernay and Montney Formations.

Demand: Total butanes demand is forecast to recover then increase to 19.0 103 m3/d (119.8 103 bbl/d) by 2030, driven mainly by greater demand for blending with nonupgraded bitumen.

Figure S6.3 shows Alberta’s supply and demand of butanes from natural gas.

Pentanes Plus

In 2020

Production: Production of pentanes plus declined by 2.1 per cent in 2020 compared with 2019, averaging 53.1 103 m3/d (334.0 103 bbl/d). This was in line with the decline in raw natural gas production in 2020.

Demand: Alberta’s demand for pentanes plus also declined in 2020, falling to 96.9 103 m3/d (609.5 103 bbl/d), a 1.8 per cent change from 98.7 103 m3/d (620.9 103 bbl/d) in 2019.

Forecast for 2021 to 2030

Production: Production is projected to grow over the forecast period, reaching a high of 72.6 103 m3/d (456.5 103 bbl/d) by 2030 as producers will to continue focus on gas production from liquids-rich formations, such as the Montney, Upper Mannville, and Duvernay Formations.

Demand: Alberta’s demand for pentanes plus is anticipated to grow, reaching 154.1 103 m3/d (969.5 103 bbl/d) by 2030. This increase in demand correlates with the anticipated growth in bitumen production over the forecast period. 

Imports of pentanes plus into Alberta are also expected to increase over the next ten years to meet the forecast shortfall between supply and demand for diluent. Alberta currently imports pentanes plus by rail and pipeline (e.g., Kinder Morgan Canada Inc.’s Cochin and Enbridge Inc.’s Southern Lights pipeline systems).

Figure S6.4 shows Alberta’s supply of pentanes plus from natural gas and demand for diluent.

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