Natural Gas Daily
Bentek: Significant shale-driven ethane price declines unlikely

Tuesday, January 04, 2011

Even as natural gas liquids production balloons in the US, sufficient new fractionation capacity and petrochemical demand will prevent a significant decline in prices, particularly for ethane, a new Bentek Energy report says.

The Colorado-based firm wrote Tuesday that the substantial NGL growth has occurred because of shale drillers’ rush to wet gas plays in an area it termed “The Liquids Fairway,” which runs from the Eagle Ford Shale in South Texas to the Bakken Shale in North Dakota.

NGL output from US natural gas plants hit a new record of 2.036 million b/d in September, according to Energy Information Administration data. More than 75% of the increase in NGLs from January 2009 was from the Texas inland region, which includes the Eagle Ford, Granite Wash, Anadarko and Permian basins, the report states.

Additionally, 67% of the new 884 drilling rigs now in operation are located within the Liquids Fairway.
This shift of production westward – away from traditional fractionation facilities and petrochemical markets along the Gulf Coast – has resulted in new midstream investments in pipelines and gas processing plants.

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