Narrowing oil-to-gas ratio calls in to question variety of US projects.

摘要

With crude prices continuing to decline around the world the oil-to-gas ratio in the US has narrowed considerably, eroding the price advantage enjoyed by a number of US producers that utilize gas-based feedstocks. The erosion of this price advantage has also called into question the viability of a variety of projects (e.g., crackers, ethane terminals, gas-to-liquids (GTL) units, LPG terminals, propane dehydrogenation (PDH) units) that were announced when the oil-to-gas ratio in the US was as wide as it has even been. According to the president of Petral Consulting Dan Lippe, "It has to force everybody who is planning to invest a couple billion dollars in ethylene and propylene capacity to at least redo their economics based on a significantly lower price environment for at least a few years." He did add that because these projects will have a typical lifespan of 20-30 years a final investment decision should be based on what a company expects crude prices to average in the long-term and not on the current short-term fluctuation in the market.