Published December 2014
The widespread commercialization of hydraulic fracturing (fracking) combined with horizontal drilling in hydrocarbon containing shale formations has resulted in an enormous increase in natural gas and natural gas liquids (ethane, propane, butane) production, as well as the production of petroleum condensate (light crude oil). Although these processes have been initially commercialized in the US and Canada, other regions of the world will soon (as of 2014) receive the same low cost hydrocarbon economic benefits, either through the importation of natural gas liquids from the US, or hydrocarbon production from their own domestic shale formation reservoirs.
Globally, nearly half of ethylene production is based on light naphtha steam cracking (liquids cracking), where the light naphtha is priced at nearly parity with crude oil ($US 100/bbl in 2014). Natural gas liquids produced via fracking are sold in 2014 at 4–8 $US/MM-Btu, equivalent to an oil price of $US 22-44/bbl, providing an enormous feedstock cost advantage for producing ethylene via steam cracking. The downside is that natural gas liquids steam cracking (gas cracking) produces a smaller amount of the heavier by-products (butadiene, isobutylene, n-butenes, pyrolysis gasoline) used in derivative petrochemicals production.
Where fracking is widespread (in 2014 predominantly in the US and Canada), chemical operating companies have announced significant grass roots projects to build world-scale ethylene steam crackers (gas crackers) that are designed to feed these low cost shale derived feedstocks, in order to capture the cost advantage of natural gas liquids production from shale reservoirs. This report presents current commercial process technology, and the corresponding production economics, for a) producing ethylene via 100% ethane steam cracking, b) producing ethylene via 50:50 ethane:propane steam cracking, and c) producing ethylene via 100% n-butane steam cracking.