| Frac Spread |
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0.01
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| Last updated: October 23, 2026 03:01 | |
Gas Processing Frac Spread
The Gas Processing Frac spread (also known as Frac Spread) as we use the term here is the difference between the value of natural gas (front-month Henry Hub natural gas futures price) and the value of NGLs (a weighted average of Mont Belvieu NGL prices) that’s converted from cents per gallon to dollars per Btu). The higher the frac spread, the more value is created by extracting NGLs from natural gas. That value goes not only to producers, but also to midstream companies providing processing, transportation and fractionation services and to end-users that enjoy the benefits of growing supplies of NGLs.
In addition, the Frac Spread signals changes to the broader market. When there is a significant change in the cost of a process input relative to the price of a process output, there will be big winners and equally big losers, both in terms of assets and investors in those assets. Thus, following the frac spread is a good way to keep your finger on the pulse of the whole gas midstream sector. The units of the frac spread are $/MMBtu.
To dive deeper into the Frac Spread, read our blog, "People Out There Turnin' Natgas Into Gold - NGLs, Gas Processing and the Frac Spread."
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