Good To Be A Gas Processor - Processing Economics Model

Even though ethane prices have recovered by about 4 cnts/gal from the lows last week (January 14, 2013) most gas processing plants are still faced with ethane rejection economics. The past two blogs in our Gas Processing Economics series examined the impact of ethane rejection for a specific plant configuration, running a range of Eagle Ford gas streams.  But Eagle Ford gas is quite rich and high in ethane content – certainly not representative of the overall market.  Is it possible to use the RBN Gas Processing model to look at the aggregate market for U.S. gas processing?  That answer is yes, if you don’t mind hacking your way through some EIA statistics and manipulating a few input variables.

Over the past week (Jan 13-20, 2013) the ethane-to-gas ratio has recovered slightly from 0.99 to 1.05, mostly due to a 3 cnt/gal increase in the price of purity ethane at Mont Belvieu (OPIS 24.5 cnts/gal).  [See today’s Spotcheck “Ethane to Henry Hub Gas Ratio” graph.  Click here if you have trouble accessing Spotcheck.]   But that does not change the fact that the ethane market is still deep in ethane rejection territory.  What does it mean for gas processing economics?  And how do different gas streams impact NGL recoveries, ethane rejection and tailgate gas volumes.  That’s what we’ll examine today.

In time honored RBN blogging tradition – we’ve been at this blogging business three years –we look back today at the 250 blogs posted this year to see which ones had the highest hit rates.  The number of hits any blog gets tells you a lot about what is going on in the energy markets – which topics resonate with our members, and which don’t attract much attention.  Last year the big hitter blogs came in about 17,000 hits.  This year the big numbers are closer to 50,000.  With that many folks paying attention these days it is even more important that we take a page out of the late Casey Kasem’s playbook to look at the top blogs of 2014 based on numbers of website hits.