margin

On September 19, 2014, the operating margin for a representative Gulf Coast steam cracker running ethane hit a record high – an astonishing 70.4 cents per pound.  Steam cracker margins depend not only on the spread between feedstock costs and the market price of ethylene but also on the varying amounts of propylene, butadiene and other byproducts that result from using different feedstocks. Understanding steam cracker profitability in the context of recent market developments is critically important, and it is the subject of RBN’s latest Drill-Down Report. In today’s blog we provide highlights of the report, which examines what is behind the ongoing shift from heavier to lighter NGL feedstocks, unveils RBN’s downloadable Steam Cracker Feedstock Selection Model, and discusses how new U.S. cracker capacity, NGL exports and other factors will impact these markets.

Midstream companies are building or planning 400 Mb/d of new condensate splitter capacity to process Eagle Ford production by 2016. BASF/Total have been operating a 75 Mb/d splitter at Port Arthur since 2000. The new splitters are being built in response to a flood of condensate range material coming out of the Eagle Ford into Houston and Corpus Christi. So what’s the big deal with condensate splitters? Today we look at splitter economics.

Gulf Coast diesel cracks (margins over crude) have averaged $8/Bbl more than gasoline for the past two years. As a result, Gulf Coast refiners have been producing more diesel than gasoline for the first time since records began. US demand for diesel has remained flat but exports have boomed. Diesel has been a shining light for US Gulf refiners at a time when their colleagues on the East Coast and in Europe are heading for the exits. Today we examine the diesel boom and where it is headed.

Natural gas production seems totally dependent on NGLs.  In turn, NGLs are highly dependent on petrochemical crackers.  How does this work?  What could go wrong?  That’s the topic of this multi-part series on NGLs in the petrochemical industry.  Part I is an overview of the market dynamics involved and will set us up for going deep into the math of petrochemical feedstocks.  So let’s get cracking.

This is Part IV of a multi-part series on the Golden Age of Natural Gas Processors.  The first three parts covered the following topics:

Today we look at how much money natural gas plants make, who gets the money and what that means for both producers and processors.