For a couple of years now, Buckeye Partners has been working to advance a controversial plan to reverse the western half of its Laurel refined-products pipeline in Pennsylvania to allow motor gasoline, diesel and jet fuel to flow east from Midwest refineries into the central part of the Keystone State. Some East Coast refineries that have relied on Laurel for 60 years to pipe their refined products as far west as Pittsburgh have been fighting Buckeye’s plan tooth and nail, arguing that it would hurt their businesses and hurt competition in western Pennsylvania gas and diesel markets — and refined-product retailers in the Pittsburgh area agree. Now, after a state administrative law judge’s recommendation that Pennsylvania regulators reject Buckeye’s plan, Buckeye has proposed an alternative: making the western half of the Laurel Pipeline bi-directional, which would allow both eastbound and westbound flows. Today, we consider the latest plan for an important refined-products pipe and how it may affect Mid-Atlantic and Midwest refineries.
Daily energy Posts
The year-ago completion of Energy Transfer Partners’ Lone Star Express NGL pipeline from West Texas to the Mont Belvieu storage and fractionation hub near Houston was a big deal. The new, 533-mile pipe increased effective NGL takeaway capacity out of the Permian by more than 25% and gave Energy Transfer a larger conduit for moving NGL produced at its Permian natural gas processing plants directly to the company’s still-growing complex of fractionators in Mont Belvieu. Energy Transfer also owns another big NGL pipeline out of the Permian: the Lone Star West Texas Gateway. Today we continue our blog series on the NGL side of the Permian with a look at what is currently the biggest fish in the play’s NGL pond.
In the Energy Information Administration’s (EIA) latest ethane production stats — for the month of May — gas plant production of ethane exceeded 1.4 MMb/d for the first time. In the same month, ethane exports also hit a record at 191 Mb/d, and ethane demand for petrochemical production — you guessed it — hit still another all-time high, topping 1.2 MMb/d. All this is just the beginning. These numbers and the throughput of any midstream infrastructure transporting or fractionating ethane will continue to increase over the next two years as new, ethane-only crackers come online, ethane rejection dwindles and overseas exports of ethane ramp up. By 2020, U.S. ethane demand is expected to reach 2 MMb/d — up by two-thirds from where it stands now. Today we continue our series on rising ethane demand, how the new demand will be met and what it all means for ethane prices.
The utilization of NGL takeaway pipelines out of the fast-growing Permian is determined to a significant degree by the natural gas processing plants that the pipes are connected to. Midstream companies prescient — or lucky — enough to own NGL pipelines that extend out of the hottest, most productive sub-regions within the Permian’s Midland and Delaware basins are benefiting not only from higher NGL volumes now, but the likelihood of even fuller pipes as Permian production continues to ramp up. Today we continue our blog series on the NGL side of the Permian phenomenon with a look at existing gas processing plants in the play and their connections to NGL pipelines that move y-grade to storage and fractionators.
A big question mark hanging over the Permian like a dark cloud is whether there will be sufficient pipeline takeaway capacity to deal with continued production growth in the U.S.’s hottest shale play. Mostly, takeaway-adequacy questions are asked about either crude oil or natural gas, but ensuring sufficient NGL pipeline capacity out of the Permian may ultimately be the biggest challenge of all. Why? Because just about everything involving NGLs seems to be more complicated — how they are produced, transported, stored and even priced. Today we begin a series on Permian natural gas processing, natural gas liquids production growth and existing plus planned NGL pipelines out of West Texas and southeastern New Mexico.
MPLX is wrapping up a three-part, $500 million plan to facilitate the pipeline transport of large volumes of field condensate and natural gasoline from the Marcellus and Utica plays to Midwest refineries, western Canadian heavy-crude shippers and other end users. But “wrapping up” may be the wrong phrase. In fact, MPLX sees its Cornerstone Pipeline, Utica Build-Out Projects and other elements of the company’s Midwest pipeline push as part of a larger and continuing effort to deal with remaining inefficiencies in the delivery of Marcellus/Utica liquids to market. Today we review what has been accomplished so far, and what expansions and enhancements to MPLX’s pipeline plan may be in the offing.
The last couple of years have been a wild ride for the U.S. ethane market, but look out ahead. It’s going to get crazy. The onslaught of new, ethane-only crackers is upon us at the same time overseas exports are expected to ramp up. At first glance, it might appear there is enough ethane to meet all that demand, coming from molecules that today are being rejected — that is, sold as natural gas rather than liquid ethane. But the big question — will it be enough? Because not all that rejected ethane has access to pipeline capacity needed to get it to market, at least not right now. In today's blog, we begin a new series on rising ethane demand, how the new demand will be met, and what it all means for ethane prices.
Plans are afoot to double and maybe triple the liquefied petroleum gas (LPG) export capacity of the Pacific Northwest — British Columbia, Washington State and Oregon — giving the region an enhanced role in what has been a booming business. Volumes being shipped to Asia out of the Ferndale marine terminal in northwestern Washington State are at near-record levels, and AltaGas and Royal Vopak are building a 40-Mb/d (and expandable) export facility in northwestern BC that is planned to come online in early 2019. Further, Pembina may be only months away from committing to the construction of a 20-Mb/d LPG marine terminal, also in BC. Today we continue our series on the expanding role of Western Canada in LPG exports with a look at plans for new propane/butane marine-dock capacity in BC.
The Pacific Northwest will never be a Houston or even a Marcus Hook when it comes to liquefied petroleum gas (LPG) export volumes, but the region — British Columbia, Washington State and Oregon — is finally poised to get a second marine terminal dedicated to loading propane and butane, the two LPG family members. When AltaGas and Royal Vopak’s planned 40-Mb/d LPG export terminal on BC’s Ridley Island comes online in the first quarter of 2019, it will join Petrogas’s 30-Mb/d terminal in Ferndale, WA, in offering time-saving, straight-shot LPG deliveries to Asia, which has emerged as a leading destination for North American-sourced propane and butane. Other LPG export terminals in the Pacific Northwest have been proposed. Today we begin a blog series on propane and butane exports from Ferndale and the prospects for regional export growth.
In the five years since the U.S. flipped from a net LPG importer to net LPG exporter, the vast majority of those exports have gone out from Gulf Coast marine terminals. That makes perfect sense. After all, Mont Belvieu, TX is North America’s main fractionation and storage center—most of the natural gas liquids produced in the U.S. are piped there to be fractionated into propane, butane and other “purity products.” But what’s also true is that a growing share of NGLs are produced and fractionated in the Northeast, that increasing export volumes are moving out of Sunoco Logistics Partners’ Marcus Hook, PA marine terminal, and that NGL pipeline capacity from the “wet” Marcellus and Utica production areas to Marcus Hook is about to increase significantly. Today we continue our review of the LPG export data with a look at propane and butane exports from East Coast marine terminals.
Five years ago, the U.S. was a net importer of propane and butanes, those products collectively called LPG, or liquefied petroleum gasses. Back then, demand from residential, commercial, refining and chemical markets slightly exceeded supply for the products. But then came shale, and LPG production from natural gas processing more than doubled, from 0.8 Mb/d to 1.7 Mb/d. Suddenly the U.S. was a net exporter—a very big exporter at that. Last year roughly half of all LPG from U.S. gas processing plants was exported, with the vast majority shipped to overseas markets. All those exports are now having an outsized impact on pipeline flows, inventories and prices. Consequently, it is increasingly important to keep close tabs not only on export volumes but on which export terminals are handling all these volumes, and where the LPG is heading. Today we discuss the current state of the LPG export market and insights on it from RBN’s most recent NGL Voyager Report. Warning, today’s blog includes a subliminal promo for the report.
Anticipating renewed growth in natural gas and natural gas liquids production in the Marcellus and Utica plays, midstream companies active in the region are planning new gas processing plants and fractionators, as well as new NGL takeaway capacity and in-region NGL storage. And Shell Chemicals has made a Final Investment Decision to build a $6 billion, ethane-consuming steam cracker in western Pennsylvania by the early 2020s. In today’s blog, “Unleashed in the (North)East—New Gas Processing and Fractionation Capacity in Marcellus/Utica,” Housley Carr continues our series on on-going efforts by midstreamers and others to keep pace with NGL growth in the epicenter of U.S. gas and NGL production.
Natural gas production in the Marcellus and Utica plays is projected to rise by 30% or more by 2022 under all of RBN’s forecast scenarios, and production of Northeast natural gas liquids is expected to increase even more quickly. Midstream companies are responding to this next phase of gas/NGL growth with plans for still more gas-processing plants, fractionators, NGL storage facilities, and NGL takeaway capacity––pipeline, rail, ship and barge. Also, Shell Chemicals continues to advance plans for an ethane-consuming steam cracker in Beaver County, PA, and another petrochemical company may soon decide to build a cracker in Ohio. Today we begin a new series on the latest push by midstreamers to keep pace with NGL growth in the epicenter of U.S. gas and NGL production.
Every day, about 1.8 million barrels of NGLs, naphtha and other ethylene plant feedstocks are “cracked” to make both ethylene and an array of petrochemical byproducts. And every day, decisions are made for each steam cracker on which feedstock—or mix of them—would provide the plant’s owner with the highest margins. Within each petchem company, these decisions are optimized by staffs of analysts and technicians using sophisticated and complex mathematical models that consider every nuance of a specific ethylene plants’ physical capabilities. Fortunately for us mere mortals, it is possible to approximate these complex feedstock selection calculations for a “typical” flexible cracker using a relatively simple spreadsheet model. Today we continue our series on how the raw materials for ethylene plants are picked with an overview of RBN’s feedstock selection model, a review of feedstock margin trends, and an explanation of how the model also can be used to indicate future NGL and naphtha prices and to assess the prospects for various industry players.
During the spring, summer and fall of 2016, U.S. propane inventories grew much more slowly than they did in the same period in 2014 and 2015, in part due to fast-rising exports. The situation isn’t dire––propane stock levels are relatively high as the winter of 2016-17 really kicks in, largely because last winter was a mild one that left inventories in good shape when the 2016 stock-building period started. But even-higher exports and the possibility of a “real” winter this time around raise the specter of an especially big drop in stored volumes over the next three months. Today we assess what the combination of higher exports and even an average winter could mean for propane inventories.
The normal butane market was anything but normal the past few weeks. All’s back to square one now, but in the last week of 2016 the price for normal butane spiked to more than $1.20/gal from only $0.73/gal in November. The differential between isobutane and normal butane plummeted into record-shattering negative territory. And the margin from cracking normal butane to make ethylene and other products fell off the chart—literally, our PowerPoints had to be reworked to show how much the margin had fallen. What the heck went on there? Today, we discuss the recent upheaval, what may have caused it, and why things snapped back to normal so quickly.