e-p mix

Last Friday the price for ethane in E-P mix in Conway dropped to 4.5 cnts/gal for a period of time.  According to OPIS, the price averaged 7.25 cnts/gal for the day.  Those numbers are all-time low prices for the product, and rock bottom by anyone’s definition.  As we discussed here in Monday’s post titled Monitor-Monitor on the Wall, Who’s the Cheapest Hydrocarbon of All, these are prices at the Conway Hub.  Most NGLs coming into Conway incur a transportation fee to get there and a fractionation fee to convert mixed NGLs into salable products.  That deduct can be between 6 and 12 cents per gallon.  Let’s say the deduct is 10 cnts/gal. Subtract that from 7.5 and by my math that’s negative 2.5 cnts/gal.  It’s hard to make money selling at negative prices.  Fortunately producers and natural gas processors are still making good money churning out propane, butanes and natural gasoline.

The cheapest hydrocarbon?  Natural gas you say?  Not even close.  It is ethane (in E-P mix) situated in suburban Conway, Kansas.  We’ve looked at cheap Conway ethane before, but never like this.  Because it has never been like this.  Even OPIS, which has been tracking NGL prices since Methuselah was a young whipper-snapper has not seen this level of prices.