Natural Gas Daily
US liquids drive prompts demand for NGL outlets

Thursday, January 12, 2012

Producers continue to scramble for takeaway capacity for natural gas liquids (NGL) output from shales,
with midstream company Enterprise Products Partners reporting on Wednesday that shipping commitments for its Mid-America Pipeline (MAPL) Rocky Mountain expansion project have more than doubled. However, poor infrastructure may inhibit the growth of NGL in the United States, Interfax has learned.

“Ethane is the most favoured feedstock, with an average $0.10 per pound ethylene production margin over propane. !is is a result of weak natural gas prices relative to West Texas Intermediate (WTI) crude prices, with a crude-to-gas price ratio of roughly 34/1,” Bentek Energy analyst Jennifer Brickle told Interfax.

“Propane, butane, natural gasoline and gasoil prices tend to trend more with the price of crude, whereas ethane tends to trend more with natural gas,” Brickle said. Bentek and Turner Mason have estimated that low ethane prices have driven a 50% jump in ethane demand from the US petrochemical industry, with demand expected to grow by another 27% by 2016.

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