Sand Hills Pipeline

The widely held expectation that Permian NGL production will rise sharply through the early 2020s has set off fierce competition among midstream companies to develop new pipeline capacity out of the play — mostly to the NGL storage and fractionation hub in Mont Belvieu, TX, but also to Corpus Christi. Only some of the incremental pipeline takeaway capacity being planned is likely to be needed, though, raising the stakes among midstreamers to line up the long-term commitments they need to finance and build their projects. Today we continue our series on NGL-related infrastructure in the U.S.’s hottest shale play with a look at efforts to add new takeaway capacity as NGL production in the Permian ramps up.

The year-ago completion of Energy Transfer Partners’ Lone Star Express NGL pipeline from West Texas to the Mont Belvieu storage and fractionation hub near Houston was a big deal. The new, 533-mile pipe increased effective NGL takeaway capacity out of the Permian by more than 25% and gave Energy Transfer a larger conduit for moving NGL produced at its Permian natural gas processing plants directly to the company’s still-growing complex of fractionators in Mont Belvieu. Energy Transfer also owns another big NGL pipeline out of the Permian: the Lone Star West Texas Gateway. Today we continue our blog series on the NGL side of the Permian with a look at what is currently the biggest fish in the play’s NGL pond.

The utilization of NGL takeaway pipelines out of the fast-growing Permian is determined to a significant degree by the natural gas processing plants that the pipes are connected to. Midstream companies prescient — or lucky — enough to own NGL pipelines that extend out of the hottest, most productive sub-regions within the Permian’s Midland and Delaware basins are benefiting not only from higher NGL volumes now, but the likelihood of even fuller pipes as Permian production continues to ramp up. Today we continue our blog series on the NGL side of the Permian phenomenon with a look at existing gas processing plants in the play and their connections to NGL pipelines that move y-grade to storage and fractionators.