Bentek TM

Wednesday, November 16, 2011

The impact of shale drilling technologies has created a surge of natural gas liquids (NGL) production and is driving huge investments across North America in gas processing, pipeline transportation, liquids fractionation and petrochemical facilities.

DENVER, CO and DALLAS , TX (November 16, 2011) – A joint market study from BENTEK Energy and Turner, Mason & Company (TM&C) reports that U.S. gas plant natural gas liquids (NGL) production is expected to increase more than 40% over the next five years. The increase will total approximately 950,000 b/d, with volumes reaching at least 3.1 MMb/d by 2016. At the same time, crude production from the U.S. and Canada will grow by more than 2.8 MMb/d, further impacting NGL supplies as crude quality changes and new refinery upgrading capacity comes online. Current levels of NGL infrastructure are inadequate to handle the surge in NGL production and significant new investment is needed to relieve bottlenecks. The BENTEK and TM&C joint study, The Great NGL Surge!, finds that as a result of excess NGL supply, transportation constraints and demand limitations, the North American NGL and crude oil markets will experience wide and volatile regional price differentials during the next few years.

“The shale revolution is having a dramatic effect on the NGL market in North America, and that in turn is driving changes in all aspects of the market, ranging from production, processing, fractionation and transportation to the petrochemical industry,” noted BENTEK Vice President E. Russell (Rusty) Braziel.

“At the same time NGL production from gas processing is surging, the U.S. refining industry is in the middle of a significant capital program to accommodate a changing crude slate, which will present still more challenges and opportunities to the NGL market,” added TM&C Senior Vice President John Auers. “Traditional supply/demand relationships for each NGL product are being transformed by these developments.”

The rise in NGL supply has the potential to wreak havoc on the NGL market, the study reports. Surplus ethane volumes from the anticipated increases will outpace demand from the U.S. petrochemical industry until new ethylene units are completed. Propane supply is increasing while demand in the home heating sector is down, putting a premium on marine dock space for shipment of incremental supply to offshore markets. Butanes will see wider summer-winter swings in supply, demand and prices. Additionally, natural gasoline will increasingly flow into the diluent market for Canadian heavy crude and could experience a dramatic decline in motor gasoline blending if certain Environmental Protection Agency (EPA) vapor pressure and octane regulations are implemented.

To provide insight into these issues, BENTEK and TM&C have jointly prepared a comprehensive analysis of NGL markets in the U.S. and Canada titled, The Great NGL Surge! BENTEK contributed the analysis of natural gas production, natural gas BTU content, NGL production, transportation, storage, petrochemical demand and heating demand. TM&C contributed refinery models of NGL production and demand, an analysis of shifting crude oil slates on refinery NGL production and the analysis of other refinery sector developments on NGL demand. Together these projections provide a broad assessment of macro-level developments in NGL markets, and drill down to a product-by-product, region-by-region review of the data behind each assertion and conclusion.

For more information on The Great NGL Surge!, a joint market study from BENTEK and TM&C, visit (1-888-251-1264) or visit (214-754-0898).

BENTEK is a leading energy markets information company. Based in Evergreen, CO, BENTEK brings customers the analytical tools and competitive intelligence needed to make time-critical, bottom-line decisions in today's natural gas, crude oil, NGLs and power markets. BENTEK is a business of Platts, a leading global provider of energy, petrochemicals and metals information. Additional information about BENTEK Energy is available on the Web at

Turner, Mason and Company (TM&C)
Turner, Mason & Company (TM&C) provides management and engineering consulting services for the petroleum and petrochemical industries. The firm consists of a highly qualified staff of chemical engineers, all of whom have had significant experience with operating companies. TM&C, which was founded in 1971 and is based in Dallas, TX has an international scope and serves a wide variety of clients operating in these industries. It also develops and publishes various studies and forecasts of the petroleum business, including subscription Outlook products, as well as special studies.