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India, which is among the top buyers of ethane from the US , has witnessed its import share of the commodity from the North American country decline for the sixth straight year in 2024. According to the US Energy Information Administration (EIA), India was the third largest ethane buyer accounting for 13.22 per cent, or around 23.
80 million barrels, of the total, after China (46 per cent) and Canada (15 per cent) in the last calendar year (CY). In 2023, India was the second biggest ethane importer from the US , procuring 26.85 million barrels, or roughly 15.
62 per cent of the total outgoing cargoes, the US EIA data showed. In 2019, India accounted for more than one-third (30.41 million barrels) of the cumulative ethane exports by the US.
Since then, its share has declined consistently to 26.85 per cent in 2020, 19.38 per cent (2021) and 18.
24 per cent (2022). Growth in global petrochemical demand, lower US prices and rising tanker capacity is driving the US export growth. The country is a major ethane exporter due to the shale gas revolution, which generated abundant liquefied natural gas (LNG) and liquefied petroleum gas (LPG).
On pricing dynamics, the US EIA explained when ethane prices are higher relative to natural gas prices, plant operators can recover more ethane from the natural gas stream. However, when ethane and natural gas prices are closer, more ethane can be left in the stream and sold for its heat value. Among the reasons behind the decline is India’s push for self-reliance.
“Make In India is helping to lower exports somewhat as PSU OMCs and others are expanding petrochemicals capacity for revenue diversification. Another is that new petrochemical plants are using dual natural gas and naphtha crackers,” a trade source said. Availability of cheaper domestic natural gas and global prices of ethane and its derivatives also factor in while importing the commodity, he added.
Ethane is largely used as a petrochemical feedstock to manufacture ethylene, which is used in making packaging films, wire coatings, squeeze bottles, plastics and synthetic rubber products. According to a September 2022 report by the US Department of Energy, India is actively seeking to develop its domestic petrochemicals industry. In 2020, India produced around 8.
9 million tonnes (mt) of ethylene and is forecast to increase production by over 46 per cent by 2028. In 2019, the country announced the Make in India initiative establishing a minimum percentage of local content—the use of domestic suppliers, products, or services—for public procurements ranging from 50 per cent in 2019 to 80 per cent by 2025. The International Energy Agency (IEA) in its February 2025 India gas market report said natural gas consumption in petrochemicals hit 2.
6 billion cubic meters (bcm) in 2023, a 27 per cent increase from the low point of 2 bcm in 2022. This was caused by high LNG prices and supply disruptions from Gazprom Marketing and Trading, which was taken over by the German government in that year (2022). However, consumption in 2023 remained about 25 per cent below the 2017-2021 average of 3.
5 bcm per year, as operators have increasingly relied on ethane and NGL-based feedstocks in recent years, it pointed out. “New petrochemical projects often use dual natural gas and naphtha crackers and prefer to use naphtha from integrated oil refining operations when it is available. Companies like Reliance Industries , Petronet and GAIL are also expanding the use of imported ethane and NGLs (natural gas liquids) as feedstock for their petrochemical plants,” IEA said.
Incremental gas demand growth is limited to recovering activity at existing gas connected facilities. This is projected to drive petrochemical sector gas demand to around 3.5 bcm per year by 2030, representing a 5 per cent annual increase from 2023, it added.
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