docFinder alert PLS PLS
Week of August 27, 2012Volume 2, No. 30

NGL Prices, Players and Markets
Growing supplies spur midstream and downstream growth


NGL Prices

Ethane Reaching Fresh Lows


August 16, 2012


Full Presentation



Mont Belvieu vs. Conway

NGL Frac Spread


August 16, 2012


Full Presentation


 With the industry focus on liquids rich plays and supplies of NGLs increasing, the midstream sector is rapidly building out additional infrastructure for gas processing and NGL transport. Downstream NGL demand is increasing from the Gulf Coast petrochemical industry as the lighter NGL feedstock gives this market a competitive cost structure second only to the Middle East. Competitive global propane prices are also spurring additional export capacity. Upstream, short term bottlenecks are impacting pricing and production in some cases.  Recently in the Permian, Pioneer Natural Resources announced 4,800 boe/d negative impact on production due to a fractionation shortfall and Berry Petroleum has been impacted by periodic gas curtailments, higher line pressures and ethane rejection as gas plants fill up.

This  docFinder Alert highlights recent presentations by the industry regarding the NGL markets. Timely and accurate data is critical to your business.  PLS's docFinder database saves you time and money and provides you critical intelligence to make better decisions.

Courtesy of QEP Resources, the two slides above are from a presentation QEP gave regarding the Black Forks gas processing complex it is expanding for area producers in Wyoming for area producers as an alternative to the Mont Belvieu market.  Highlights of the two slides are:

  • Mont Belvieu ethane price is currently 19% of NYMEX crude oil - versus a historical 43%
  • Propane price is 47% of crude - versus historical 68%
  • Butanes and natural gasolines are currently not down much
  • Frac Spreads at the two core NGL hubs (Mont Belvieu and Conway) are both trending down
  • Conway frac spreads are worse than Mont Belvieu
  • Conway ethane frac spread is negative in Q2 2012

More HOT slides and data below. 

PLS highlights recent key slides and presentations on the US NGL markets.  Below are additional presentations from leading NGL midstream companies MarkWest Energy Partners, Enterprise Products Partners, and ONEOK Inc. On the producer side, we highlight Marcellus NGL pricing from leading producer Range Resources.

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    featured.slides from docFinder

    Slide Slide Slide Slide

    NGL Forecast

    Production Growth

    August 22, 2012


    Propane Export

    Gulf Coast Expansion

    July 16, 2012


    NGL Environment

    Supply/Demand Growth

    August 22, 2012


    Marcellus NGL Pricing

    $36.89/bbl in Q2 2012

    August 13, 2012


    MarkWest Energy is the midstream leader in the northeast shales (Marcellus, Utica, Huron).  Slide above forecasts US NGL extraction from gas processing (breaking out ethane specifically). Currently nearing 2.5 MMbbl/d with growth to over 3.0 MMbbl/d by 2016. Propane derived from gas processing will back out imported propane and refined propane.  By 2014, MarkWest's Liberty segment will have 2.5 Bcf/d processing capacity and 234,000 bbl/d fractionation capacity.


    Enterprise Products Partners is an integrated midstream company with $8 billion of projects under construction. NGL services are 58% of EPD's earnings stream. Ethane demand by US petrochemical industry and international markets is also leading to more demand for propane. As a result EPD is building a world-scale PDH unit on the Texas Gulf Coast designed to consume 35,000 bbl/d propane.  EPD is also expanding its capacity to export propane to 75 MMbbls/year.


    ONEOK Inc's presentation includes an appendix on NGLs. Today, fractionation capacity is tight with new builds underway at Mont Belvieu. The Conway-to-Mont Belvieu pipeline is full making price differentials between the markets volatile. ONEOK's "Four Straws" gameplan will provide additional capacity for producers in the Cana-Woodford, Granite Wash, Mississippian Lime and Bakken to deliver to Mont Belvieu markets. This slide shows sources, products and end users for NGLs.


    Range Resources slide above shows realized pricing by quarter for Marcellus NGL.  Q2 2012 was $36.89/bbl (40% of WTI).  This is down 28% from Q1's $51.10/bbl (50% of WTI). Currently all ethane is being sold with the gas not processed.  The average NGL bbl is 56% propane and pricing should follow propane seasonal prices during heating season.  In Range's SW PA rich gas area, Range currently has firm cryogenic processing capacity of 415 MMcf/d, increasing to 615 MMcd/d by Q3 2012.


    Full Presentation

    Full Presentation

    Full Presentation

    Full Presentation

    featured.transactions from PLS global M&A database

    08/28/12Stratex Oil & Gas acquires Magellan Petroleum (Australia)$114 MM
    08/23/12QEP buys Bakken/Three Forks from Helis, Black Hills, Sundance et al.$1,380 MM
    08/20/12Shell and Chevron swap assets in Australia$4,240 MM
    08/17/12Petroceltic Intl. buys Melrose Resources (Egypt)$442 MM

    Source: PLS M&A Database