Analysis: Shale-gas extraction will sustain U.S. feedstock advantages

09/24/2010 | ICIS Chemical Business (U.K.)

Europe is finding itself at a significant cost disadvantage in petrochemical production, as the region relies on naphtha as its feedstock. In the U.S., petrochemical firms have the advantage of cheap feedstock costs, as the expansion of natural gas extraction from shale produces an abundance of ethane, said Joe Pilaro, president of U.S. petrochemical consultant BRAE Partners. "It's only in the past five or six years that we have seen, potentially, a major differential open up between ethane prices and naphtha," said chemical analyst Paul Hodges.

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