Forecasting: Canada's NGL [natural gas liquids] supply outlook

A perspective is given on Canada's supply and demand balance of ethane, propane, and butane, and Canada's participation in meeting the expected increases in United States import requirements. Increases in Canadian natural gas liquids (NGL) supply depends on increases in natural gas production. Since new production (except for the Shell Caroline gas discovery) is tending to have lower yields of liquids, NGL supply will not increase as much as the increase in natural gas production. Nearly 50% of Canadian NGLs are produced in straddle plants located at the inlet of gas transmission lines. Surpluses of ethane and high capital costs means that new straddle plants will not be built in the near future, but expansions of existing plants will occur to maximize propane and butane production. The potential ethane supply will increase, notably from the Shell Caroline project. The primary market for ethane in Canada is the Alberta petrochemical industry, and a new ethylene plant to be started up in 1994 will increase demand. The use of ethane for miscible flooding will decrease to the end of the decade. Propane production is expected to increase to a total of 180,000 bbl/d by 2000; demand growth in traditional markets such as heating and cooking is expected to be marginal, and the petrochemical sector is expected to show the largest growth in propane demand. The use of butane for producing methyl tertiary butyl ether is expected to increase butane demand for the rest of the decade. Exports of NGL to the USA are largely via the Cochin pipeline system. Modest increases in NGL exports are expected. A number of gas pipeline projects are at various stages of planning, and completion of these projects would enable an increase in Canadian exports. 8 figs