Not long after crude oil prices crashed in 2014, natural gas processing economics hit the skids. From late 2014 through the first half of 2017, times were tough for natural gas processors and the producers processing natural gas to extract NGLs in their plants. That’s because the per-MMBtu price difference between natural gas prices and NGL prices was low. Very low. In fact, during 2015-16, it was the lowest it’s been over the past decade except for a brief period during the 2009 financial meltdown. But things are looking up. Thanks to a big boost in from propane and butane prices — and, to a lesser extent, rising ethane and natural gasoline prices — natural gas processing economics look healthier today than they have in years. It is going to get even better as more new ethane-only steam crackers come online. Given these developments, it is clearly time for another deep dive into what makes gas processing economics work, and how the numbers are about to change. Today, we begin our latest expedition into the wilds of gas processing.
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