The South Texas NGL market has always been a world of its own, a self-contained liquids ecosystem running from Brownsville to Markham, a distant 200 miles from the NGL epicenter at Mont Belvieu. In recent years, however, the South Texas market has been undergoing radical change, first with the emergence of the Eagle Ford basin, then with the onslaught of Permian production and, most recently, with the aptly named EPIC NGL Pipeline and new fractionation capacity in greater Corpus Christi. More supply and demand are on the way, with new pipes, exports, and the largest ethane-only petrochemical plant in the world under construction. And with these developments, a strategy by several large, well-financed players has emerged – to develop an NGL storage and fractionation hub competitive with Month Belvieu. Today, we begin a series to examine the South Texas NGL market and how changes there will impact flows, utilization, and pricing across North America and beyond.
Over the past couple of years, we’ve made mention of the upcoming changes in the Corpus Christi-area NGL market. In Flick of the Switch, we mapped out the route of EPIC Midstream’s new, 24-inch-diameter y-grade NGL pipeline from the Permian to Corpus, mostly focusing on EPIC’s decision to initially put the pipe in crude service before completing its dedicated crude pipeline. And we referenced the company’s new, 100-Mb/d fractionation plant in Robstown, TX, about 20 miles due west of Corpus. In Happy Together, we explored some of the capacity contracts getting done on EPIC’s NGL pipe. But up until this point, we’ve never really focused on what a big deal EPIC’s projects are for the NGL market in and around Corpus Christi.
In fact, the EPIC pipeline and fractionator(s) are very big deals, and last month the whole EPIC NGL strategy got even bigger. Not only did EPIC announce the startup of the new Robstown fractionator, there was a whirlwind of joint ventures, business alliances, and transportation contracts announced involving EPIC, MPLX, Phillips 66, WhiteWater Midstream, and West Texas Gas. We’ll get into the nitty-gritty for what all these deals will mean for the Corpus market later in this blog series. But for now, the takeaway is that several high-profile and well-financed players are throwing their support behind an extended NGL storage and fractionation hub designed to provide a competitive alternative to Mont Belvieu for NGL producers and gas processors. Let’s just call it the MBA strategy — Mont Belvieu Alternative — for short.
It’s hard to grasp the significance of these developments unless you have a perspective on how the South Texas/Corpus market has evolved over the decades. So that’s where we’ll start, perhaps lingering over the fascinating history of this market a bit more than absolutely necessary.
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