Daily Blog

... Ready for It? - Midstream Giants Prepare for More NGLs Bound for Export Docks

U.S. production of natural gas liquids and NGL “purity products” continues to rise (aside from occasional hiccups) and domestic demand for the commodities remains flat, so — you know what’s coming — the vast majority of incremental output of ethane, LPG and natural gasoline is headed for export docks. That’s good news, and so is the fact that the midstream sector has the infrastructure in place — or under development — to handle the increasing volumes of NGLs coming their way. In today’s RBN blog, we begin a series on the U.S.’s robust-and-growing networks of NGL pipelines, fractionators and export terminals, starting with a look at Energy Transfer’s “well-to-water” system for NGL gathering, processing, transportation, fractionation, storage and shipment in Texas.

As we said a few months ago in When the Levee Breaks, U.S. production of NGLs from gas processing has been growing (with some fits and starts) since the start of the Shale Revolution, from an annual average of 1.8 MMb/d 15 years ago to 5.9 MMb/d in 2022  — a 9% compound annual growth rate. Today, NGL production exceeds 6 MMb/d. A number of drivers are pushing NGL production higher, including the related facts that most drilling is crude-oil-focused, most crude-focused basins are experiencing higher and higher gas-to-oil ratios (GORs), and higher GORs mean more associated gas — and, in many basins (including the Permian), associated gas that is highly saturated with NGLs.

The rise in U.S. NGL production over the past decade and a half was accompanied by a massive build-out of NGL-related infrastructure: everything from gas gathering systems and gas processing plants to NGL pipelines, fractionators, ethane-consuming steam crackers along the Gulf Coast (and in western Pennsylvania), and export terminals capable of loading and sending out ethane, propane, butanes and natural gasoline. We’ve chronicled this construction boom in a long list of blogs, most of which looked at either an individual project of note (such as Enterprise Products Partners’ Morgan’s Point ethane export terminal) or important groups of assets (such as new gas processing plants in the Permian or fractionators in Mont Belvieu, TX).

Join Backstage Pass to Read Full Article

Learn More