There’s an interesting aspect to the buildout of new Permian gas processing capacity, NGL pipelines, fractionators and NGL export terminals, namely that virtually all of the projects are being undertaken by midstream companies that handle NGLs along their entire value chain, from wellhead to water.
The rapid buildout of Permian gas processing plants and other NGL-related infrastructure in Texas and southeastern New Mexico isn’t just continuing, it’s accelerating. In today’s RBN blog, we discuss the latest project announcements and why gas and NGL production in the Permian are still rising.
Over the past decade, the only significant growth market for U.S. crude oil and NGLs has been exports, with over 90% departing from the Gulf Coast. Exports via Gulf of Mexico ports have surged from about 1 MMb/d in 2016 to over 6 MMb/d last year. Great news for PADD 3 export facilities, right? Well, it’s not that simple. The distribution of barrels has been wildly uneven, resulting in significant winners, forlorn losers, and everything in between. And export volumes are still ramping up, as is the competition among marine terminals for crude and NGL export market share, with far-reaching consequences for producers, midstreamers and exporters. This is one of the core themes at our upcoming NACON conference, which is all about PADD 3 North American Crude Oil & NGLs and scheduled for October 24 at the Royal Sonesta Hotel in Houston. In today’s RBN blog, we’ll delve into the highly competitive liquids export landscape, consider some of the important factors driving flows one way or the other, and — fair warning — slip in some subliminal advertising for the NACON event.
Over the past decade, the only significant growth market for U.S. crude oil and NGLs has been exports, with over 90% departing from the Gulf Coast. Exports via Gulf of Mexico ports have surged from about 1 MMb/d in 2016 to over 6 MMb/d last year. Great news for PADD 3 export facilities, right? Well, it’s not that simple. The distribution of barrels has been wildly uneven, resulting in significant winners, forlorn losers, and everything in between. And export volumes are still ramping up, as is the competition among marine terminals for crude and NGL export market share, with far-reaching consequences for producers, midstreamers and exporters. This is one of the core themes at our upcoming NACON conference, which is all about PADD 3 North American Crude Oil & NGLs and scheduled for October 24 at the Royal Sonesta Hotel in Houston. In today’s RBN blog, we’ll delve into the highly competitive liquids export landscape, consider some of the important factors driving flows one way or the other, and — fair warning — slip in some subliminal advertising for the NACON event.
Way back in 2018-19, U.S. NGL production was rising fast, new ethane-only steam crackers were coming online along the Gulf Coast, and new fractionation capacity wasn’t being added quickly enough — the capacity shortfall sent the NGL market into near-panic. Fast forward to now: NGL production is still rising but domestic demand is flat, resulting in an NGL-exports surge and a race to develop new export capacity. And fractionation capacity in Mont Belvieu and elsewhere? The market learned its lesson five years ago and, to avert another capacity crunch, midstream companies have been adding new fractionators at an almost frenetic pace. In today’s RBN blog, we discuss the ongoing fractionation-capacity buildout — and the need to quickly expand NGL export terminals.
Since the start of the Shale Revolution 15 years ago, U.S. NGL production has increased by an extraordinary 260% to more than 6.5 MMb/d. And it’s not just NGL production that’s up sharply. So are exports of NGL purity products, especially LPG (propane and normal butane) and ethane. All that growth — and the growth that’s still to come — wouldn’t be possible without a seemingly non-stop expansion of NGL-related infrastructure. Everything from gas processing plants and NGL pipelines to salt-dome storage, fractionators and export docks. And much of that infrastructure is in the hands of just a few large midstream companies that over the years have developed “well-to-water” NGL networks that enable their owners to collect multiple fees along the NGL value chain. In today’s RBN blog, we discuss highlights from our new Drill Down Report on NGL networks.
Since the start of the Shale Revolution 15 years ago, U.S. NGL production has increased by an extraordinary 260% to more than 6.5 MMb/d. And it’s not just NGL production that’s up sharply. So are exports of NGL purity products, especially LPG (propane and normal butane) and ethane. All that growth — and the growth that’s still to come — wouldn’t be possible without a seemingly non-stop expansion of NGL-related infrastructure. Everything from gas processing plants and NGL pipelines to salt-dome storage, fractionators and export docks. And much of that infrastructure is in the hands of just a few large midstream companies that over the years have developed “well-to-water” NGL networks that enable their owners to collect multiple fees along the NGL value chain. In today’s RBN blog, we discuss highlights from our new Drill Down Report on NGL networks.
Crude-oil-focused production growth in the Permian is generating increasing volumes of associated gas that need to be processed and mixed NGLs that need to be piped to Mont Belvieu, fractionated and exported. All that suggests the need for still more infrastructure — processing plants, NGL pipelines, fractionators and export facilities — and Enterprise Products Partners, a top-tier NGL midstreamer, recently laid out a multibillion-dollar plan to help Permian producers keep pace. In today’s RBN blog, we discuss the new set of projects Enterprise has in the works.
Phillips 66 is probably best known for its fleet of complex refineries, but the Houston-based company also is involved in marketing, chemicals and midstream services. In fact, P66 is one of only a handful of midstreamers offering the full range of “well-to-market” or “well-to-water” NGL services — everything from associated-gas gathering systems and gas processing to NGL pipelines, storage, fractionators and export facilities. And P66’s standing among NGL midstream providers has only been enhanced by the recent doubling of its ownership interest in DCP Midstream. In today’s RBN blog, we continue our series on major NGL networks with a look at P66’s NGL-related assets, most of which run from the Rockies, West Texas and South Texas to the NGL hubs in Mont Belvieu and Old Ocean, TX.
Six months on from the height of the crude oil price rout of April 2020 and the unprecedented market convulsions that followed, energy markets appear to be settling into a state of hyper-uncertainty amidst the ongoing pandemic. Crude oil prices have been downright equanimous, stabilizing near $40/bbl in recent months. Volatility has reigned in the gas market, but it has thus far managed to avoid a major collapse, and the NGLs market has dodged a complete derailment from norms, if barely. The relative calm provides the perfect opportunity to assess how COVID-era energy markets are operating and what lies ahead — which is what we’ll be doing next week at RBN’s Virtual School of Energy. There’s a new order taking shape, and we’re rolling out RBN’s freshly updated outlooks for U.S. crude oil, natural gas and NGL markets. As always, we’ll pull back the curtain on the fundamental analysis and models behind our forecasts, so you can understand how we arrived at our answers, and gain the skills and tools to adjust the assumptions as markets evolve. As you’ve gathered by now, today’s blog is an unabashed advertorial for our virtual conference, but read on if you’d like to hear more about the underlying premise behind our latest outlook.
