Published April 2017
Shale gas and tight oil extraction in the United States have competitive advantages over butanes production in the rest of the world because of the geological and geographic features of its assessed plays, a more evolved pipeline infrastructure to move the butanes, the versatility of drilling assets to switch from oil to gas and back again, private mineral rights ownership that incentivizes property owners to allow development, and the availability of water. Combined, these advantages have enabled the United States to boost butanes production. However, other regions are also beginning to produce natural gas liquids from shale gas and tight oil extraction.
This report focuses on butanes (n-butane and isobutane) and their major markets. The global butanes business is operated by oil and natural gas companies from the public and private sectors. Major global end uses for butanes include consumption for gasoline manufacture, use in petrochemical production, and fuel uses (as LPG).
The following pie chart shows world consumption of butanes:
The three leading applications for butanes are in residential and commercial fuel for heating and cooking (similar to propane), chemical production, and refinery applications. Combined, the three accounted for about 83% of the total consumption in 2016; the share is forecast to increase to 84% of total butanes consumption by 2021. Residential and commercial heating/drying accounted for about 48%, with growth forecast at 4.0% annually during 2016–21. Chemical production, which includes the production of ethylene, MTBE, maleic anhydride, and propylene oxide, accounted for about 24%, and refinery applications accounted for about 11.5%.
The other applications include use of butanes in engine fuel and for industrial heating/drying applications. Industrial uses are forecast to grow at just over 2% per year during 2016–21, while engine fuel use will remain stable.
Global production of butanes is forecast to grow at about 2.5% annually during 2016–21. The leading producing regions were the Middle East and the United States, with about a 20% share each. US production is forecast to increase at more than 3% per year through the forecast period, making the United States the largest global producer of butanes by 2021.
For further information, see the CEH Natural Gas Liquids, Ethylene, and Butylenes reports, and the IHS Specialty Chemicals Update Program Oil Field Chemicals report. Other useful reports on the end-use consumption of butanes include the CEH Gasoline Octane Improvers/Oxygenates, Maleic Anhydride, and Propylene Oxide reports.