Published January 1996
Natural gas and associated natural gas liquids (NGLs) are projected to supply major shares of the incremental growth in global petrochemical feedstock demands. Natural gas--methane--is the dominant feedstock for ammonia and methanol production, and the C2-C4 fractions of NGLs (C2-C5+) extracted in processing raw natural gas are major feedstocks for olefins production. Thus, the supply economics and pricing of natural gas and NGLs to chemical and petrochemical manufacturers are and will be important determinants of profitability. This PEP Review assesses the pricing mechanisms for natural gas, with focus on the industrial/chemical end-use markets in the United States and Western Europe. The influence of natural gas pricing on the pricing of a major feedstock, ethane, is also summarized. Appendix A discusses natural gas resources estimates.
