condensate splitters

Since the mid-2010s, MPLX has been developing a far-reaching pipeline system for delivering heavier natural gas liquids and field condensate from the Utica and “wet” Marcellus plays to Midwest refineries for gasoline blending and refining, and to the Alberta oil sands for use as diluent. The multi-year, multi-project effort, which has involved the construction of new pipelines, the repurposing of existing pipes, and the development of new storage capacity, will reach another milestone next month, when MPLX starts batching normal butane and isobutane through most of the pipeline system. And further enhancements are on the horizon. Today, we provide an update on the master limited partnership’s long-running strategy for moving Marcellus/Utica-sourced liquids to market more efficiently and at a lower per-barrel cost.

The combination of rising condensate demand as new splitter capacity came online and falling conde supply resulted in just what you’d expect — higher conde prices. Worse yet for the companies that made throughput commitments for those new splitters, the once-favorable price differentials between conde and light-crude benchmarks West Texas Intermediate (WTI) and Louisiana Light Sweet (LLS) have been turned on their heads, and a number of splitters are operating at far less than capacity. Today, we continue our look at the roller-coaster world of conde, this time focusing on conde prices and differentials, and on the forces that may change the conde market once again.