High natural gas liquids (NGL) prices relative to natural gas, combined with a boost in production in the gas shale plays and cryogenic gas processing technologies, have led to a surge in the U.S. liquids market, according to a new report by Colorado's Bentek Energy LLC.
"The Rich Get Richer: Shale Gas and NGLs," released on Tuesday, examines the net impacts of the regional shift in production and the consequences for regional 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 Rusty Braziel. "With new drilling in the Gulf of Mexico currently chilled by a regulatory deep freeze in the wake of the BP [Deepwater] Horizon disaster, NGL production is effectively shifting westward."
This shift of the "NGL production epicenter" has resulted in new midstream infrastructure investments in pipelines, gas processing plants and other facilities to serve an area known as "The Liquids Fairway," noted the report. "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."
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