Ever-increasing production of natural gas liquids is driving another round of fractionation capacity expansions in Mont Belvieu, TX, which is—and will remain—the hub of US fractionation activity. But Mont Belvieu fractionators are not without competition. Huge increases in fractionator capacity are also coming on-line in Appalachia to handle the rising volumes of natural gas liquids (NGLs) coming out of the Marcellus and Utica. Mont Belvieu may be king of fractionation, but others want a share of the kingdom. Today we update the ongoing NGL production boom and plans to add fractionation capacity in Mont Belvieu and NGL-related export capability nearby.
Production of mixed NGLs has risen sharply in the past five years, and the pace of growth is only increasing. Almost all of these mixed NGLs are the product of natural gas processing plants, which have increased in number by about 125 or 25 percent over the five year period. Fractionation facilities separate mixed NGL streams (sometimes known as “y-grade”) into so called “purity” products - ethane, propane, normal butane, isobutane and natural gasoline (also known as C5+) that are used in a wide variety of petrochemical, heating, gasoline blending and other markets. Mont Belvieu (about 30 miles east of Houston) has traditionally been the center of the fractionation world because of geography and geology. It is located near several oil and gas production regions; it is in the heart of petrochemical production; it is along the coast (necessary for both importing and exporting); and it sits atop one of the world’s largest salt dome formations (which provide ideal storage capacity for all kinds of volatile hydrocarbon products that must be stored under pressure). Given the US’s new leadership in the availability of low-cost NGLs, another key reason for Mont Belvieu’s importance is its proximity to existing and planned olefin cracking capacity and to existing and planned export facilities for propane, butane and other NGLs. As we have said in many other blogs (see for example Changes in Longitudes—Ethane Exports to Europe), the US shale revolution is spurring a major revival of petrochemical production, particularly along the Gulf Coast, that will result not only in increased olefin production (petrochemicals such as ethylene, propylene, etc.), but in increased exports of olefins and their derivative products. Because of its leader status, Mont Belvieu prices for NGLs and purity products also serve as the benchmarks, or prices against which NGL prices in other parts of the US are referenced.
US fractionation capacity totals about 4.4 MMb/d; of that, 1.6 MMb/d is in Mont Belvieu, and several expansion projects are under way or being considered there. Competition for fractionation business and market share is based on three primary factors: (1) the fractionation fee, (2) the ability of the fractionation company to provide the pipelines, storage capability and other key logistics needed to smoothly move product through the process, and (3) the demand (and prices) for purity products in the fractionator’s local market. In addition to competing with each other, the Mont Belvieu fractionators also compete on a more limited basis with fractionators in Conway, KS, a number of decentralized, smaller fractionation facilities around the country, and increasingly with fractionators in the Appalachia.
There are four big players in Mont Belvieu fractionation: Enterprise Products Partners (EPD), Targa Resources Partners, ONEOK Partners, and Lone Star NGL (Energy Transfer). EPD owns all or part of eight NGL fractionation plants in Mont Belvieu with a combined capacity of 670 Mb/d (EPD owns all but about 100 Mb/d of that), while Targa owns all or part of fractionators with a combined capacity of 538 Mb/d. ONEOK and Lone Star follow with 235 Mb/d and 200 Mb/d, respectively. Now we will begin our look at each of the Big Four individually, note their recent fractionator additions, and discuss expansions under construction or planned.
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About the song
“My Generation” was written by Pete Townshend and appears as the sixth song on side one of The Who’s debut album of the same name. The song was released as a single in November 1965. It went to #74 on the Billboard Hot 100 Singles chart in the U.S., but soared to #2 on the UK charts, making it the highest-charting single for The Who in Britain, along with “I’m a Boy” in 1966. Personnel on the record were: Roger Daltry (lead vocals), Pete Townshend (guitar, backing vocals), John Entwistle (bass, backing vocals) and Keith Moon (drums).
The album My Generation was recorded at IBC in London from April to November 1965, with Shel Talmy producing. Released in the UK in December 1965, the album was released in the U.S. in April 1966 with a different cover picture and a slightly different track listing under the title The Who Sings My Generation. It failed to chart in the U.S., which is ironic since many critics since its release have rated it as one of the best rock records of all time. It has been re-released in various versions and different formats over the years. Four singles have been released from the LP.
The Who are an English rock band formed in London in 1964 by Roger Daltry, Pete Townshend, John Entwistle and Keith Moon. They developed from an earlier mod R&B group with the same members called The Detours. The Who identified with both the mod and pop art movements in Britain in the 1960s. The group used the on-stage destruction of guitars, amplifiers, and drums as part of their performance art.
Pete Townshend and John Entwistle were among the earliest users of Marshall stack amplifiers, designed by Jim Marshall in his London shop in 1962. The Who have released 12 studio albums, 16 live albums, 27 compilation albums, four soundtrack albums, four EPs and 58 singles. They have sold more than 100 million records worldwide. The band was inducted into the Rock and Roll Hall of Fame in 1990 and the UK Music Hall of Fame in 2005. Daltry and Townshend received Kennedy Center Honors in 2008. Keith Moon died in 1978 and was replaced by Kenney Jones until 1988. (Jones also reunited with the band for a benefit concert in 2014.) John Entwistle died in 2002. Current touring musicians include Zak Starkey (drums), Simon Townshend (guitar, backing vocals), Loren Gold (keyboards, backing vocals), and Jon Button (bass). The Who continue to record and tour. They are currently on a North American tour — “The Who Hits Back!” — with dates booked until November.
