Natural Gas Intelligence
NGL Investment Cycle Today, Crude Oil Tomorrow, Says BENTEK

Thursday, September 29, 2011

Anyone nostalgic for the natural gas infrastructure boom of the latter half of the last decade need only wake up to the natural gas liquids (NGL) infrastructure boom of today -- and look forward to what's to come in response to growing crude oil production -- according to an analysis to be finished in about three weeks.

Bentek Energy LLC and Turner, Mason & Co. (TMC) are partnering on a study of the infrastructure available and planned to handle growing NGL production over the next five years.

"Today it's about natural gas liquids," Bentek Vice President Director Rusty Braziel told NGI. "We're in the middle of a natural gas liquids investment cycle. For example, just natural gas liquids pipelines -- not counting gas plants, fractionators and chemical companies -- we're spending $5.7 billion on new NGL pipelines, doing many of the same things that we did a few years ago in natural gas.

"Natural gas pipeline, fractionation and processing investment [for NGLs] is adequate if it all gets built. Pretty much everything that's been announced has got to be built, and in that case we make it."

And plenty of projects have been announced. Bentek and TMC have tallied about 8.3 Bcf/d of gas processing additions planned by 2014. The Texas Gulf Coast leads, followed by the Marcellus Shale and then the Anadarko Basin. Spending on those plants will be on top of the $5.7 billion for new/expanded NGL pipelines.

On the market side, the petrochemical industry has planned numerous projects to take advantage of cheap U.S. ethane and the other gifts of the liquids-rich shale boom. "The petrochemical industry should be able to absorb most of the incremental ethane, but that construction has to happen," Braziel said. "The propane will move offshore, and there are some very interesting things happening between condensates and natural gasoline." (For instance, condensate from the Eagle Ford could one day make its way to Canada for use as a diluent in oilsands production, Braziel said.)

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