As we said in Part One of this series, the production of NGLs has risen sharply in the past five years, and the pace of growth is only increasing. In response, the four leading fractionators in Mont Belvieu have been adding new capacity and planning more. They also have been adding pipeline capacity to move NGLs in and out of Mont Belvieu’s massive storage capacity and building and expanding export terminals nearby to facilitate the export of LPG, ethane and other NGL-based products to consumers overseas. We also discussed how geography and geology have helped to make Mont Belvieu (30 miles east of Houston) the center of US fractionation activity. As we said, it is located near several oil and gas production regions; it is in the heart of petrochemical production; it is along the coast (a must for importing and exporting); and it sits atop one of the world’s largest salt dome formations). Finally, we talked about how fractionators in Mont Belvieu compete with each other for business primarily on price (fractionation fees) and logistics (the ability to provide the pipelines and storage needed to smoothly move product through the process), and how fractionators in other regions are always looking to take some of Mont Belvieu’s market share.
Last time, we examined the Mont Belvieu fractionation capacity and expansion plans of the two largest players there: Enterprise Products Partners (EPD) and Targa Resources Partners. As you recall, EPD owns all or part of eight NGL fractionation trains in Mont Belvieu with a combined capacity of 670 Mb/d (EPD’s share of that total is about 570 Mb/d), and Targa owns all or part of fractionators with a combined capacity of 538 Mb/d. EPD recently added two fractionator trains at Mont Belvieu; it also is expanding a nearby LPG export terminal and planning a big new ethane export facility. Targa, meanwhile, added a fourth fractionation train at its Cedar Bayou facility in Mont Belvieu last summer, and is likely to add two more trains there soon. It also is expanding its Galena Park export terminal near Houston.
By the way, if you are new to the business of fractionation, a train is not of the choo-choo variety. Instead a fractionation train is an integrated set of heaters, towers and other hardware that works together to split mixed NGLs into the purity products ethane, propane, normal butane, isobutane and natural gasoline.
Today we discuss the Mont Belvieu fractionation capacity and expansion plans of ONEOK Energy Partners and Lone Star NGL LLC.
ONEOK Partners
ONEOK Partners owns 80% of a 160 Mb/d fractionator (MB-1) at its Mont Belvieu complex and 100% of both a 75 Mb/d fractionator (known as either MB-2 or Frac-1) that came online in December 2013 and a 75 Mb/d fractionator (known as either MB-3 or Frac-2; estimated cost, $525 million to $575 million) that is under construction and expected to begin commercial operation in the fourth quarter of 2014 (see Figure #1).
Figure #1
Source: ONEOK (Click to Enlarge)
At year-end 2013, 80% of MB-3/Frac-2’s capacity was under long-term contract and, given the growing demand for fractionation services, the remaining 20% is likely under contract by now. In March 2014, ONEOK brought online a $46 million, 40 Mb/d ethane/propane splitter than can produce 32 Mb/d of purity ethane and 8 Mbd/ of propane. Also in March, ONEOK opened its new, 550-mile Sterling III pipeline (in Figure #1, the long red line), which can move 193 Mb/d of mixed NGLs or NGL purity products from Medford, OK to ONEOK’s Mont Belvieu fractionation and storage facilities. With additional pumps, Sterling III’s capacity could be increased to 260 Mb/d. As part of its NGL pipeline expansion effort, ONEOK also has been reworking its Sterling I and II NGL distribution pipelines (the yellow lines in Figure #1) so they can move mixed NGLs as well as purity NGL products.
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About the song
“My Generation” was written by Pete Townshend and appears as the sixth song on side one of The Who’s debut album of the same name. The song was released as a single in November 1965. It went to #74 on the Billboard Hot 100 Singles chart in the U.S., but soared to #2 on the UK charts, making it the highest-charting single for The Who in Britain, along with “I’m a Boy” in 1966. Personnel on the record were: Roger Daltry (lead vocals), Pete Townshend (guitar, backing vocals), John Entwistle (bass, backing vocals) and Keith Moon (drums).
The album My Generation was recorded at IBC in London from April to November 1965, with Shel Talmy producing. Released in the UK in December 1965, the album was released in the U.S. in April 1966 with a different cover picture and a slightly different track listing under the title The Who Sings My Generation. It failed to chart in the U.S., which is ironic since many critics since its release have rated it as one of the best rock records of all time. It has been re-released in various versions and different formats over the years. Four singles have been released from the LP.
The Who are an English rock band formed in London in 1964 by Roger Daltry, Pete Townshend, John Entwistle and Keith Moon. They developed from an earlier mod R&B group with the same members called The Detours. The Who identified with both the mod and pop art movements in Britain in the 1960s. The group used the on-stage destruction of guitars, amplifiers, and drums as part of their performance art.
Pete Townshend and John Entwistle were among the earliest users of Marshall stack amplifiers, designed by Jim Marshall in his London shop in 1962. The Who have released 12 studio albums, 16 live albums, 27 compilation albums, four soundtrack albums, four EPs and 58 singles. They have sold more than 100 million records worldwide. The band was inducted into the Rock and Roll Hall of Fame in 1990 and the UK Music Hall of Fame in 2005. Daltry and Townshend received Kennedy Center Honors in 2008. Keith Moon died in 1978 and was replaced by Kenney Jones until 1988. (Jones also reunited with the band for a benefit concert in 2014.) John Entwistle died in 2002. Current touring musicians include Zak Starkey (drums), Simon Townshend (guitar, backing vocals), Loren Gold (keyboards, backing vocals), and Jon Button (bass). The Who continue to record and tour. They are currently on a North American tour — “The Who Hits Back!” — with dates booked until November.
