Matthew Jurecky, GlobalData's Head of Oil and Gas Research and Consulting, said: "The U.S. and China are driving ethylene capacity expansion projects, with the former benefiting from prolific shale gas and the latter from world-leading demand growth."
"The impact of tremendous growth in shale gas is only now being felt, as North American ethylene capacity had remained flat over the last few years. Meanwhile, China continues to lead growth, solidifying the Asia-Pacific as the single largest production region and helping to push global capacity over the 200 mmty milestone by 2017."
Jurecky adds that less expensive ethane derived from wet shale gas makes ethylene production highly attractive and is behind large-scale U.S. capacity additions. Many companies, such as Dow Chemical, Chevron Phillips, Exxon Mobil and Royal Dutch Shell, are betting on increased competitiveness in the U.S. and are constructing ethane crackers to produce cost-advantaged ethylene.
GlobalData's report also explains that the Asia-Pacific market will maintain its leading position due to high demand for ethylene from major downstream products, such as polyethylene and ethylene oxide, from China and India.
Jurecky comments: "Ethylene capacity expansion in China is comprised of several small plants based on heavy feedstock. Most new plants will come onstream in 2015 and 2016, boosting the country's capacity by approximately 53% by the end of the decade."