With the February price of natural gas soaring above $5/MMbtu last week in response to Winter Storm Fern, the ethane-to-gas ratio has been crushed below 0.75 for the first time since mid-2019 (left graph below). The ratio, which compares Mont Belvieu ethane prices to Henry Hub natural gas on a BTU basis is an indicator of ethane rejection economics. When ethane prices are lower than natural gas on a BTU basis, more ethane is “rejected” at the natural gas processing plant and sold as natural gas, assuming there are no physical or contractual constraints on doing so.
The ethane-to-gas ratio averaged 1.06 in 2025, and 0.92 so far in 2026, both very weak numbers. The dip below 0.75 (purple dashed circle, right graph) is primarily due to the 70% increase in the prompt natural gas price, while the price of ethane increased “only” 37%, from 19 c/gal to 26 c/gal.
