On May 8, 2024, the spread between Mont Belvieu isobutane and normal butane soared to 60.5 cents per gallon (red oval in graph below), a level surpassed only once before, one day back in 2018. This spike was attributed to strong demand for isobutane to produce alkylate and exported MTBE for octane enhancement, further amplified by the start-up of Next Wave’s ethylene-to-alkylate plant in early April. At the time, we noted that this foray into unprecedented price differential territory would not be sustainable. But we certainly did not predict what happened next. During the summer, the iso-normal spread dropped like a rock, sinking to NEGATIVE -4.4 c/gal at the end of October, and is still limping along in negative territory so far in November (green oval).
Featured Articles
Mont Belvieu Iso-Normal Spread Soars To Record High
This Isobutane – Normal Butane Thing Is Getting Out of Hand
Drive My Car - The Thinking Behind a Planned Gulf Coast Ethylene-to-Alkylate Project
For a few years now, the Shale Revolution has been opening up development opportunities hardly anyone would have thought possible in the Pre-Shale Era. For example, new crude oil, natural gas and NGL pipelines from the Permian to the Gulf Coast, lots of new fractionators and steam crackers, as well as export terminals for crude, LNG, LPG, ethane and, most recently, ethylene. And here’s another. Thanks to the combination of NGL production growth and new ethylene supply — plus increasing demand for alkylate, an octane-boosting gasoline blendstock — the developer of a novel ethylene-to-alkylate project along the Houston Ship Channel has reached a Final Investment Decision (FID). Today, we discuss how the FID is driven by both supply-side and demand-side trends in the NGL and fuels markets.
