Ethane production in the United States, where nearly all ethane is recovered at natural gas processing plants, has eased in recent weeks from record highs set earlier this year.

Record U.S. natural gas production last year led to record volumes of ethane recovery at processing plants in the first half of 2024. However, recovery has recently fallen from all-time highs due to record-high levels of stocks.

While the end of this year sees some easing in U.S. ethane production, continued strong export demand and expanded export capacity are set to support growth in U.S. ethane output in 2025 and beyond.

Ethane is the key feedstock in the petrochemicals sector, used to produce ethylene, which in turn is used to make plastics and resins.

In 2023, U.S. ethane production, consumption, and exports set new record highs amid growth in ethane consumption in the global petrochemical sector and rising ethane recovery associated with natural gas production, data from the U.S. Energy Information Administration (EIA) showed earlier this year.

Driven by the record U.S. natural gas production, ethane output jumped by 9% to average 2.6 million barrels per day (bpd) last year.

The Texas Inland and New Mexico refining districts, which span the Permian Basin, accounted for 61% of all U.S. ethane production in 2023, according to the EIA data.

U.S. ethane exports averaged a record-high 471,000 bpd during 2023, up by 57,000 bpd compared to the previous record set the year before.

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Earlier this year, ethane production in the United States reached a new monthly record—at 3.0 million bpd in May. First-half output was also at a new record-high at an average of 2.8 million bpd, per EIA data.

However, ethane recovery at processing plants has been falling since May due to a decline in U.S. natural gas production as operators hit the brakes amid low natural gas prices. In addition, ending stocks of ethane reached an all-time high of 80.9 million barrels in July, easing to 79.5 million barrels as of the end of August, according to the latest EIA data.

But next year, additional natural gas liquids (NGL) export capacity is planned to come online in the U.S. Gulf Coast, which is set to boost U.S. ethane recovery amid continued growth in the global petrochemicals sector.

America’s NGL production is expected to grow all through 2040 despite the slowdown in overall U.S. shale output, analysts at RBN Energy say.

“Even though we project crude oil production to peak in the early 2030s, increasing gas-to-oil ratios (GORs) and higher NGL content (gallons per Mcf, or GPM) keep NGL production growing through the 2040 horizon,” they said in an October analysis.