Tuesday, December 07, 2010
Producers and gas processors operating in rich gas (high-BTU content) and oil plays to receive disproportionate share of financial rewards from U.S. NGL boom.
EVERGREEN, CO (December 7, 2010) – According to a new report from BENTEK Energy, LLC, the U.S. natural gas liquids (NGL) market is surging, driven by the combination of high NGL prices relative to natural gas, growing production in rich gas shale plays and the increased use of cryogenic gas processing technologies. BENTEK’s newest Market Alert, The Rich Get Richer: Shale Gas and NGLs, examines the net impacts of this regional shift in NGL production and details the consequences it will have on regional NGL markets.
“A large portion of financial windfall from shale gas production is flowing to companies near rich plays such as the Eagle Ford and Granite Wash,” said BENTEK Managing Director E. Russell (Rusty) Braziel. “With new drilling in the Gulf of Mexico currently chilled by a regulatory deep freeze in the wake of the BP Horizon disaster, NGL production is effectively shifting westward.”
According to The Rich Get Richer, the geographical shift of the NGL production epicenter is driving new midstream infrastructure investments in pipelines, gas processing plants and other facilities to serve an area known as “The Liquids Fairway.” Most of the prolific rich gas and crude oil plays are within the Fairway, which starts in South Texas and runs due north up the middle portion of the U.S., ending in Saskatchewan, Canada.
Over the last 12-18 months, U.S. drilling activities have moved dramatically into The Liquids Fairway, and as a result, both inlet volumes and GPM (gallons-per-thousand-cubic-feet) are increasing. More than 75% of incremental NGL production added over the past six months has been in the Texas Inland region. Rich gas plays in this region such as the Eagle Ford and the Texas side of the Granite Wash, plus associated gas from crude plays in the Anadarko and the Permian Basins, are responsible for a majority of the growth.
According to BENTEK increasing NGL production can be expected to impact prices and disrupt regional market dynamics. The important questions are when, how and by how much. The Rich Get Richer: Shale Gas and NGLs Market Alert examines these issues in greater detail.
For more information on The Rich Get Richer: Shale Gas and NGLs visit www.bentekenergy.com or call BENTEK at 888-251-1264.