The Rich Get Richer: Shale Gas and NGLs

The geographical shift in NGL production is resulting in a disproportionate share of financial rewards going to gas processors near already-rich gas and oil plays.

The U.S. natural gas liquids (NGL) market is resurging, 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. NGL growth is shifting away from the traditional “fractionator alley” and petrochemical markets along the Gulf Coast and is now heading West to an area known as The Liquids Fairway.

Platts' Market Alert, The Rich Get Richer: Shale Gas and NGLs, examines how increasing NGL production will impact prices and affect regional market dynamics. The report includes analysis on the Louisiana Gulf Coast region, where processed volumes of offshore and onshore facilities continue to decline.

Most of the prolific rich gas and crude oil plays are within The Liquids Fairway, which starts in South Texas and runs due north up the middle portion of the U.S., ending in Saskatchewan, Canada. As a result, gas processors in the area are receiving additional inlet gas volumes and richer gas content, yielding greater average gallons-per-thousand-cubic-feet (GPM) in NGL production. Rich gas plays such as the Eagle Ford and the Texas side of the Granite Wash, and associated gas from crude plays in the Anadarko and the Permian Basins, are responsible for a majority of the growth and will be assessed in this report.