NGLs vs. LPGs – Clash of the Titans

I’m doing two more conferences this week. Yesterday I was a speaker at the Gas Processors Association (GPA) annual conference in New Orleans.  Appropriately the theme of this year’s conference is …Laissez les bons temps rouler… …Let the good times roll, and that was certainly the case.  As extensively documented here in our series on gas processing economics -  the Golden Age of Natural Gas Processors – times have never been better for gas processors.  And it seemed like there was a smile on everyone’s face to prove it. 

So of course it fell to me to sprinkle just a little rain on the parade.  Not much, but just enough to remind the big crowd attending the NGL Business Forum that trees don’t grow to the sky. The prices of natural gas liquids (NGLs) may be at astronomical levels relative to the price of natural gas, but there is competition out there.  Gas plants are not the only producers of NGLs.  Refineries produce liquefied petroleum gasses – LPGs. LPGs include refinery propane, refinery normal butane and refinery isobutane.  And these products are chemically equivalent to the propane and butanes produced by gas plants.   Of total U.S. propane (C3) and butanes (C4) production, refineries produce about 25% on a year-round basis, and more than one-third during the summer.   In a world of increasing supply and flagging demand (that’s the world we are in), it means heads up competition between NGLs and LPGs for end-use markets.

I’ve attached a pdf of my full presentation at the bottom of this blog with speaker notes.  The title is “NGLs versus LPGs - Gas Plants vs. Refineries”.  (Warning it’s a 3.8 mb download).  Please ignore cryptic notes-to-self.  This is a lot of information, and may be way more about NGLs and LPGs than you really want to know.  Remember I was speaking to a room full of NGL people, and they love this stuff.  If you are looking for the bottom line – here it is:

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