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May 6, 2014

U.S. purity ethane ships to Canada for first time in 25 years

graph of Vantage and Mariner West ethane pipelines, as explained in the article text
Source: U.S. Energy Information Administration

Republished May 6, 12:45 p.m., text was modified to clarify content.

Mistral Energy confirmed on Friday, May 2, that it has received exports of purity ethane in an inaugural shipment along the Vantage pipeline from the Williston basin in North Dakota, to connect with the Alberta Ethane Gathering System (AEGS) near Empress, Alberta, in Canada. Purity ethane is at least 95% pure ethane.

This announcement comes almost five months after Nova Chemicals announced the December receipt of purity ethane at its petrochemical complex near Sarnia, Ontario, from the recently completed Mariner West Pipeline. EIA's Petroleum Supply Monthly estimates this pipeline transported 24,000 barrels/day (bbl/d) of Marcellus ethane from southwestern Pennsylvania to Nova's petrochemical complex. Before these two announcements, purity ethane had not been shipped to Canada for the past 25 years.

What is purity ethane?

This term is generally applied to a marketed product that is 95% or more pure ethane. Purity ethane is different than blends, such as ethane/propane (E/P) mix, which is about 80% ethane, and Y-grade natural gas liquids (NGL), which varies but generally has a maximum of about 65% ethane. These blends are easier to ship in a product pipeline or vessel.

Ethane's extremely low boiling point (approximately -128°F at normal pressure) makes shipping it in a pure liquid form more complex than other petroleum fuels in that it must be done at higher pressures or kept cool. Meeting these requirements involves some degree of infrastructure specialization, particularly for storage tanks and vessels.

Ethane is principally used at cracker facilities to produce ethylene, which serves as the building block for a myriad of products, such as plastics, PVC pipes, and detergents. Strong growth in natural gas production from shale has provided the United States with an abundance of this feedstock, which has spurred investment in ethylene cracking plants. However, even the rapid construction of U.S. petrochemical facilities may not be able to keep pace with the surplus, creating the need for these pipelines. Coming pipeline and waterborne projects will also serve markets in Europe and possibly Asia.

The new 400-mile, 10-inch-diameter Vantage pipeline could ultimately transport up to 60,000 bbl/d of liquefied purity ethane extracted from natural gas processed at plants like Hess's recently expanded Tioga, North Dakota, facility, and other injection points. Exporting the ethane provides additional revenue for U.S. oil and gas producers, and is profitable for Canadian petrochemical companies, as it displaces crude-priced refined products for a feedstock with one that has declined in price to below that of natural gas. In addition to its economic benefits, exporting ethane may also reduce the flaring associated with Bakken oil and natural gas production. From Empress, the ethane will flow northwest to Nova's petrochemical complex in Joffre, Alberta, where it will be consumed or sent farther north to facilities in Fort Saskatchewan, Alberta.

Principal contributor: Bill Brown