NGL production in Western Canada hit an all-time high in 2025 and looks to be headed even higher in the years ahead. Major midstream players, such as AltaGas, have been undertaking infrastructure expansions to deal with all the additional gas processing, Y-grade fractionation and product exports.
The Permian is in the midst of an NGL infrastructure boom as midstream companies are investing to keep up with the strong production growth projected over the next several years — but until these new projects are up and running, NGL pipeline capacity to the Gulf Coast is only going to get tighter. In today’s RBN blog, we look at five pipeline projects that are under construction or in the planning process that would significantly boost NGL takeaway capacity out of the Permian.
In just over a month, the price of Mont Belvieu purity ethane doubled, from 19 c/gal to 39 c/gal on Friday. Sure, the price of natural gas was up about 15% over the same period. But that increase was nowhere near ethane’s, so it was certainly not the price of gas that was making ethane take off. In fact, with ethane rocketing into space and gas prices still in the dumper, the ethane-to-gas ratio — a key measure of the value of ethane — skyrocketed, soaring from 1.2X in mid-June to 2.2X on Friday. A ratio at this level has only happened twice before in the past decade: once in 2018 due to a collision between fractionation capacity and new petchem plants coming online, and then again in 2020 during the COVID petchem demand surge. But the most recent price surge didn’t last long. On Tuesday ethane came back to earth, crashing 22% in a single day, and the ethane-to-gas ratio deflated down to 1.6X. So what’s happening? There are a lot of conspiracy theories out there that we won’t repeat here. Instead, in today’s RBN blog, we’ll lay out what we think are the most likely contributing factors behind this wild ride.
Less than a handful of U.S. midstream companies own and operate extensive NGL networks that do it all: extract mixed NGLs from associated gas at their processing plants, transport that “Y-grade” to their underground salt-cavern storage facilities in Mont Belvieu, fractionate mixed NGLs into so-called “purity products” at their fractionators, then pipe that ethane, LPG and other products either to domestic end-users or to company-owned export docks. Enterprise Products Partners is a member of that select group and, as we discuss in today’s RBN blog, its NGL network — which stretches from Appalachia to the Permian to the Rockies — is the most extensive.
Crude oil production in the Permian continues to grow, gas-to-oil ratios in the basin are on the rise, and a slew of new gas processing plants are coming online, extracting more and more NGLs that need to be transported, fractionated and shipped to end-users. Targa Resources, with its full slate of NGL-related assets — gathering systems, processing plants, NGL pipelines, fractionators and an LPG terminal — is a big winner in all this. In today’s RBN blog, we continue our series on the U.S.’s robust and growing NGL networks with a look at Targa’s array of assets in the Permian and other production areas.
Natural gas and NGL production growth in the Marcellus/Utica slowed and then leveled off in the early 2020s, largely due to gas-pipeline takeaway constraints. Still, the Northeast remains a key supplier of natural gas and NGL “purity products,” and Energy Transfer’s NGL pipelines and Philadelphia-area marine terminal continue to play critical roles in balancing the region’s ethane and LPG markets. In today’s RBN blog, we continue our series on the U.S.’s robust-and-growing networks of NGL pipelines, fractionators and export terminals, this time with a look at Energy Transfer’s Mariner West and Mariner East pipeline systems and the company’s Marcus Hook terminal.
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.
The feeling is almost palpable among midstreamers: In a fast-changing energy industry, the companies that gather, transport, store and export hydrocarbons need to consolidate and augment — and be smart about how they get bigger. Scale, that’s the key. That — plus complementary assets that provide synergies, lower costs and increase free cash flow, a sizable portion of which can be returned to shareholders as dividends and buybacks — is what investors are looking for. Oh, and don’t forget this important M&A goal: gaining a larger footprint and a more prominent role in the Permian, the dominant U.S. production area. ONEOK, a midstream company heretofore primarily focused on moving NGLs and natural gas, earlier this week announced an $18.8 billion agreement to acquire Magellan Midstream Partners, which is best known for pipelines that transport refined products and crude oil. In today’s RBN blog, we and our friends at East Daley Analytics kick the tires, look under the hood, and give our thoughts on the deal’s pros and potential cons.
What’s the fastest-growing U.S. hydrocarbon? You guessed it — ethane. Since 2016, ethane production has grown at almost 2.5 times the rate of crude oil or natural gas and 1.5X that of other natural gas liquids (NGLs). And there’s a lot more upside potential where that came from. It’s entirely demand-pull, meaning that U.S. ethane production growth is being driven by increasing domestic and export demand for the petrochemical feedstock. Shell’s new steam cracker in Pennsylvania is online, CP Chem and Qatar Energy are planning a new cracker in Orange, TX, and other projects are in the works. On the exports front, both Enterprise and Energy Transfer announced export-terminal-expansion projects in 2022. All this new ethane demand needs supply, and fortunately the U.S. has the barrels, not only from ever-increasing NGL production, but also from ethane that today is being rejected and sold as natural gas. And the markets will need new pipes, fractionators, and ships to get that ethane to market. With today’s RBN blog, we begin a series to explore what these developments mean for U.S. ethane market players.
Financial pain, increasing regulatory scrutiny, and rising environmental mandates have been keenly felt across the entire energy industry in the past few years. When times are tough and companies are struggling to regain their footing, corporate mergers often increase in frequency. One recently announced merger between two large Canadian midstream providers, Pembina Pipeline and Inter Pipeline, has grabbed headlines and is also turning into a corporate dogfight with a prominent third party trying to scuttle the merger and take control of Inter Pipeline. Today, we examine the two companies and what the combined entity might look like and what it might mean for the energy industry in Canada.
