Shale Gas’ Impact on US Petchem Production

Overall petchem production from crackers/PDH (Mb/d)

Source: Bentek North American NGL Market Call/Platts Cracker Margin Yields

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Ethylene 922.47 947.45 999.44 1030.90 1050.03 1067.27 1210.91 1395.38 1455.14 1455.81 1454.13 1455.31 1455.31

Propylene 104.13 112.78 110.27 109.37 114.31 159.37 186.33 197.43 199.30 199.57 198.89 199.36 199.36

Crude C4s 51.42 54.14 54.70 55.83 57.74 58.31 63.76 71.22 73.28 73.43 73.05 73.21 73.21

Butadiene 33.19 34.90 35.67 36.25 37.28 36.75 40.09 45.28 46.72 46.80 46.60 46.70 46.70

Raffinate-1 18.23 19.25 19.03 19.58 20.46 20.26 21.77 24.04 24.66 24.73 24.55 24.61 24.61

Pygas 51.44 55.29 55.34 55.49 57.33 54.99 57.52 63.24 64.35 64.66 63.89 64.18 64.18

Benzene 21.51 22.98 23.14 23.32 24.06 23.29 24.65 27.27 27.85 27.97 27.68 27.79 27.79

Toluene 6.50 7.01 7.26 7.38 7.46 7.32 7.65 8.15 8.21 8.32 8.04 8.11 8.11

Xylene 0.20 0.22 0.17 0.19 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22 0.22

Other Aromatics 23.22 25.08 24.77 24.60 25.59 24.15 24.99 27.60 28.07 28.14 27.95 28.06 28.06

Gas Oil (6 oil) 6.93 7.52 8.09 8.44 8.33 8.47 8.73 8.73 8.60 8.86 8.20 8.33 8.33

Hydrogen/Fuel 272.61 287.82 292.16 294.97 304.26 308.61 338.76 381.00 392.34 392.67 391.84 392.60 392.60

TOTAL CRACKER CO-PRODUCT PRODUCTION

Potential polyethylene production (MT/year)

Source: Bentek North American NGL Market Call/Platts Modeling

• US/Canada polyethylene demand would need to grow by nearly 6% each

year through 2019 to absorb this new material. Recent growth is 1% to 2%

annually. Excess will be exported – most likely to Latin America. 3%

annual demand increase could leave about 3.7 million tons of polyethylene

available for export from the US.

Mexico may absorb 1.5 million tons by 2023

Source: Bentek North American NGL Market Call/Platts Modeling

• Assuming 4% annual growth in Mexican PE demand, stable PEMEX

production and the addition of Etileno XXI production in 2015/2016, Mexico

may be able to absorb 1.5 million tons of PE by 2023.

Central and South America also a growing market

Source: Bentek North American NGL Market Call/Platts Modeling

• Assuming 4% annual growth in Central and South American demand,

there could be a nearly 3 million metric ton market for imports by 2023.

Surpluses in 2018/2019

Source: Bentek North American NGL Market Call/Platts Modeling

• By 2018/2019 new cracker develops could fully supply polyethylene to all

of the Americas – assuming annual growth of 3% in US/Canada and 4% in

Mexico, Central and South America.

Slower growth could balance markets in 2023

Source: Bentek North American NGL Market Call/Platts Modeling

• Reducing the growth estimates by 1% annually, balances the markets in

2023 – and leaves nearly 2.7 million MT of material available to export to

Europe/Asia in 2019.

Thank you!

Jim Foster

Senior Analyst

Petrochemicals

Phone : (713) 658-3272

Email : jim_foster@platts.com