Table of Contents
1 Table of Contents
1 Table of Contents 4
1.1 List of Tables 6
1.2 List of Figures 7
2 Introduction 8
2.1 Overview 8
2.2 GlobalData Report Guidance 9
3 Shale Gas - A Vital Source of Energy Made Available Through Continuous Technological Evolution 10
3.1 What is Shale Gas? 10
3.1.1 Shale Gas is extracted through Horizontal Drilling and Hydraulic Fracturing 10
3.1.2 Natural Gas Liquids Fractionated from the Shale Gas are Used in Petrochemical Production 11
3.1.3 The US has the Second Largest Shale Gas Reserves in the World 11
3.2 Increasing Shale Gas Production has Increased Natural Gas Liquid Supply 12
3.2.1 Barnett Shale Play is the Oldest and the Largest Natural Gas Liquid-producing Shale in the US 12
3.2.2 Eagle Ford is One of the Most Liquid-rich Shale Plays and has the Necessary Associated Infrastructure 14
3.2.3 Marcellus Shale Play will Supply Huge Quantities of Ethane after the Completion of Planned Pipelines and Planned Projects 15
3.2.4 Bakken Shale is Primarily an Oil Play with a High Natural Gas Liquid Content 17
4 The US Natural Gas Industry Witnessed a Turnaround after Shale Gas Significantly Enhanced Production 19
4.1 Historic US Natural Gas Production and Consumption, 1970-2000 19
4.2 Natural Gas Imports Continued to Increase until Advanced Drilling Technologies Made Production from Shale Plays Viable 20
4.2.1 Natural Gas Supply Shortage until 2005 20
4.2.2 Breakthrough in Drilling Technology Improved Natural Gas Production 20
4.2.3 Shale Plays have created a Plentiful Supply of Natural Gas Production for the Rest of the Decade 22
4.3 Natural Gas Prices Fell as a Result of Excess Production 23
4.4 Lower Natural Gas Prices have Forced Producers to Seek Liquid-rich Shale Plays 24
5 Turnaround in the Natural Gas Industry to Enhance Ethane Supply for the US Petrochemicals Industry 25
5.1 The US Petrochemicals Industry Became Less Competitive with the Emergence of the Middle East as the Most Economic Production Center 25
5.2 The US has been Overtaken by China as the Leader of the Global Petrochemicals Industry 25
5.2.1 China has emerged as the Leader of the Global Petrochemicals Industry in the Last Decade 25
5.2.2 Slower US Petrochemicals Demand Growth due to Mature Domestic Market 26
5.2.3 Chinese Production Increased at an Unprecedented Pace to Fulfill Domestic Demand 28
5.3 US Poised to Regain Strength as Shale Reserves will Provide Abundant Supply of Ethane Feedstock 30
5.4 Lower Cost of Ethane has Driven Ethylene Margins in the US 32
5.5 More Ethane Crackers are Being Planned in the US to Benefit from the Advantageous Feedstock Scenario 34
5.6 Increase in Natural Gas Liquid Production has Boosted Fractionation Capacity 35
5.7 Increasing Investment will Increase Ethylene Capacity Substantially by 2017 36
6 Government Regulation and Inadequate Pipeline Infrastructure May Hamper the Ethane Supply in the US 38
6.1 Tightening Fracking Regulations to Make Drilling More Difficult 38
6.2 Pipeline Infrastructure Must be Improved to Bring Ethane to Petrochemical Markets 40
7 Major Companies Utilizing Shale Resources for Expanding Petrochemicals Business 41
7.1 The Dow Chemical Company 41
7.1.1 Business Overview 41
7.1.2 Dow’s Ethylene Capacity by Country 42
7.1.3 Dow’s Active Olefins Capacity in the US 43
7.1.4 Dow’s Shale Gas-based Investments in the US 44
7.2 Chevron Phillips Chemical Company LLC 45
7.2.1 Business Overview 45
7.2.2 CPC’s Ethylene Capacity by Country 45
7.2.3 CPC’s Active Olefins Capacity in the US 46
7.2.4 CPC’s Shale Gas-based Investments in the US 46
7.3 ExxonMobil Corporation 47
7.3.1 Business Overview 47
7.3.2 ExxonMobil’s Ethylene Capacity by Country 48
7.3.3 ExxonMobil’s Active Olefin Capacity in the US 49
7.3.4 ExxonMobil’s Shale Gas-based Investments in the US 49
7.4 The Royal Dutch Shell 50
7.4.1 Business Overview 50
7.4.2 Shell’s Ethylene Capacity by Country 51
7.4.3 Shell’s Active Olefins Capacity in the US 52
7.4.4 Shell’s Shale Gas-based Investments in the US 52
7.5 Sasol Limited 53
7.5.1 Business Overview 53
7.5.2 Sasol’s Ethylene Capacity by Country 53
7.5.3 Sasol’s Active Olefin Capacity in the US 54
7.5.4 Sasol’s Shale Gas-based Investments in the US 54
8 Latest Trends in the US Petrochemicals Industry Triggered by Shale Gas Developments 55
8.1 Improved Ethane Supplies will Drive the Use of On-Purpose Technologies in the Future 55
8.2 Ethane from Marcellus Shale will Fulfill Demand from Overseas Markets 56
8.3 Utica Shale May Emerge as Another Source of Ethane 57
9 The US Petrochemicals Industry has a Bright Future as the Advantaged Feedstock Supply will Remain in the Long Term 58
10 Appendix 59
10.1 Abbreviations 59
10.2 Definitions 59
10.2.1 Installed Capacity 59
10.2.2 Process 59
10.2.3 Technology 59
10.3 Bibliography 59
10.4 GlobalData’s Research Methodology 61
10.4.1 Coverage 61
10.4.2 Secondary Research 61
10.4.3 Primary Research 62
10.4.4 Expert Panel Validation 62
10.5 Contact Us 62
10.6 Disclaimer 62
List Of Figures
Figure 1: Natural Gas Industry, US, Shale Gas Production Process 10
Figure 2: Natural Gas Industry, Global, Technically Recoverable Shale Gas Resources (tcf), 2011 11
Figure 3: Natural Gas Industry, US, Barnett Shale Area 13
Figure 4: Natural Gas Industry, US, Eagle Ford Shale Area 15
Figure 5: Natural Gas Industry, US, Marcellus Shale Area 16
Figure 6: Natural Gas Industry, US, Bakken Shale Area 18
Figure 7: Natural Gas Industry, US, Production and Consumption (tcf), 1970-2000 19
Figure 8: Natural Gas Industry, US, Share of Shale Gas in Total Natural Gas Production (%), 2000-2035 21
Figure 9: Natural Gas Industry, US, Production and Consumption (tcf), 2001-2011 22
Figure 10: Natural Gas Industry, US, Average Quarterly Natural Gas Price ($/MMbtu), 2000-2012 23
Figure 11: Petrochemical Industry, US and China, Basic Petrochemicals Demand (MMtpa), 2000-2016 26
Figure 12: Petrochemical Industry, US and China, Basic Petrochemicals Production (MMtpa), 2000-2016 28
Figure 13: Petrochemical Industry, US, Ethane Production (MMbbl), 2000-2012 30
Figure 14: Royal Dutch Shell and ConocoPhillips, US, Ethylene Margins ($/Ton), January 2010-April 2012 32
Figure 15: Ethylene Industry, Global, Cost of Production ($/Ton), 2005 and 2011 33
Figure 16: Natural Gas Industry, US, NGL Production (MMbbl), 2000-2011 35
Figure 17: Ethylene Industry, US, Capacity (MMtpa), 2000-2017 37
Figure 18: Natural Gas Industry, US, States with Hydraulic Fracturing Disclosure Requirements, As of May 30, 2012 38
Figure 19: The Dow Chemical Company, Ethylene Capacity by Country (%), 2011 42
Figure 20: Chevron Phillips Chemical Company LLC, Ethylene Capacity by Country (%), 2011 45
Figure 21: ExxonMobil Chemical Company, Ethylene Capacity by Country (%), 2011 48
Figure 22: Shell Chemical LP, Ethylene Capacity by Country (%), 2011 51
Figure 23: Sasol Limited, Ethylene Capacity by Country (%), 2011 53
Figure 24: Utica Shale Area, 2012 57
List Of Tables
Table 1: Natural Gas Industry, Global, Technically Recoverable Shale Gas Resources (tcf), 2011 12
Table 2: Natural Gas Industry, US, Geological and Economic Characteristics of Barnett Shale Play 13
Table 3: Natural Gas Industry, US, Geological and Economic Characteristics of Eagle Ford Shale Play 14
Table 4: Natural Gas Industry, US, Geological and Economic Characteristics of Marcellus Shale Play 15
Table 5: Natural Gas Industry, US, Geological and Economic Characteristics of Bakken Shale Play 17
Table 6: Natural Gas Industry, US, Production and Consumption (tcf), 1970-2000 20
Table 7: Natural Gas Industry, US, Share of Shale Gas in Total Natural Gas Production (%), 2000-2035 21
Table 8: Natural Gas Industry, US, Production and Consumption (tcf), 2001-2011 22
Table 9: Natural Gas Industry, US, Average Quarterly Natural Gas Price ($/MMbtu), 2000-2012 24
Table 10: Petrochemical Industry, US and China, Basic Petrochemicals Demand (MMtpa), 2000-2016 27
Table 11: Petrochemical Industry, US and China, Basic Petrochemicals Production (MMtpa), 2000-2016 29
Table 12: Petrochemical Industry, US, Ethane Production (MMbbl), 2000-2012 31
Table 13: Royal Dutch Shell and ConocoPhillips, US, Ethylene Margins ($/Ton), January 2010-April 2012 32
Table 14: Ethylene Industry, Global, Cost of Production ($/Ton), 2005 and 2011 33
Table 15: Petrochemicals Industry, US, Shale Gas-based Ethylene Capacity Expansion Details, 2012-2017 34
Table 16: Natural Gas Industry, US, NGL Production (MMbbl), 2000-2011 36
Table 17: Ethylene Industry, US, Inactive Plants, 2009 36
Table 18: Ethylene Industry, US, Capacity (MMtpa), 2000-2017 37
Table 19: Natural Gas Industry, US, Number of Pending Bills Related to Hydraulic Fracturing, by State, As of May 30, 2012 39
Table 20: The Dow Chemical Company, Key Facts 41
Table 21: The Dow Chemical Company, Ethylene Capacity by Country (%), 2011 42
Table 22: The Dow Chemical Company, US, Active Olefins Plants, 2011 43
Table 23: The Dow Chemical Company, US, Shale Gas-based Planned Projects, 2012-2018 44
Table 24: Chevron Phillips Chemical Company LLC, Key Facts 45
Table 25: Chevron Phillips Chemical Company LLC, Ethylene Capacity by Country (%), 2011 46
Table 26: Chevron Phillips Chemical Company LLC, US, Active Olefins Plants, 2011 46
Table 27: Chevron Phillips Chemical Company LLC, US, Shale Gas-based Planned Projects, 2013-2018 47
Table 28: ExxonMobil Chemical Company, Key Facts 47
Table 29: ExxonMobil Chemical Company, Ethylene Capacity by Country (%), 2011 48
Table 30: ExxonMobil Chemical Company, US, Active Olefins Plants, 2011 49
Table 31: ExxonMobil Chemical Company, Shale Gas-based Planned Projects Details in the US, 2013-2016 49
Table 32: Royal Dutch Shell plc, Key Facts 50
Table 33: Shell Chemical LP, Ethylene Capacity by Country (%), 2011 51
Table 34: Shell Chemical LP, US, Active Olefins Plants, 2011 52
Table 35: Sasol Limited, Key Facts 53
Table 36: Sasol Limited, Ethylene Capacity by Country (%), 2011 54
Table 37: Sasol Limited, US, Active Olefins Plants, 2011 54
Table 38: Cracker Yield by Feedstock (%) 55
Table 39: Propylene Industry, US, Planned Plant Details, 2012 56
