Ethane production in the Northeast (Marcellus & Utica) hit a new record level in 2Q24 of 394 Mb/d, led by demand from Shell’s (SHEL) Monaca cracker in Pennsylvania. The new cracker has ramped in 2024 after initial start-up issues, with further upside ahead in our forecast.
According to data in East Daley Analytics’ Ethane Supply & Demand Report, Mariner West saw robust throughput, plus record demand on the Utopia ethane pipeline feeding petrochemical facilities in Sarnia, ON. The key driver for the increase in ethane supply, however, was record demand at the Shell cracker.
East Daley has written about the Shell Polymers Monaca plant in Beaver County, PA, the only petrochemical complex located within the Appalachian Basin. The Monaca plant entered service in 3Q22, but Shell has struggled to keep the facility running and experienced significant downtime in 2023.
Now there are reasons for optimism as Shell turns around performance. The Falcon Pipeline, a system built by SHEL to source ethane for the polymer cracker, reported its highest throughput ever in 2Q24 of 82 Mb/d. The record performance followed on strong results from 1Q24 (see figure). The Falcon pipe moves ethane from MPLX’s Cadiz and Houston processing plants in the liquids-rich SW Marcellus + Utica.
More good news came from state regulators this summer. In follow-up to the status of Shell’s federal Title V operating permit for air emissions, the Pennsylvania Department of Environmental Protection (DEP) “conducted an administrative review and determined the application to be administratively complete on July 2, 2024.” This means there is another ~20 Mb/d of ethane demand that has yet to surface.
Earlier this year, Shell CEO Wael Sawan revealed two of the three polyethylene trains are operating at capacity, and said the Monaca plant will not be fully online until 2025 or ’26. So we expect more upside ahead for assets supplying ethane to SHEL. – Rob Wilson Tickers: MPLX, SHEL.
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