Climbing NGL supplies spark infrastructure expansion on US Gulf

17 April 2012 00:08  [Source: ICIS news]

NEW ORLEANS, Louisiana (ICIS)--Natural gas liquids (NGL) production, particularly ethane and propane, is the key to profitable shale drilling and causing massive supply increases and infrastructure issues, an executive with Enterprise Products Partners said on Monday.

Demand for NGL is expected to grow through 2015, but that does not take into account construction of ethane crackers after that year, said Enterprise vice president of fundamentals and supply appraisal Tony Chovanec.

He spoke at the Gas Processors Association (GPA) annual meeting.

“Last year I thought there would be one more world-scale ethylene plant,” Chovanec said.

He said there are now five plants being seriously discussed, or already announced, and 15 additional plants in discussion. The ethylene industry is taking advantage of cheap US ethane feedstock, largely developed from shale basins, Chovanec said.

Enterprise Products has forecasted an increase of 280,000-315,000 bbl/day in ethane by 2015, in addition to 140,000-180,000 bbl/day propane supply jump and a general (NGLs) supply up by 520,000-680,000 bbl/day.

There are two existing propane export facilities, which are owned by Enterprise. The company plans to expand both of them.

Targa Resource Partners approved a $250m (€190m) expansion of its Gulf coast import and export marine terminal to provide export capability for 5,000 bbl/hour of refrigerated, low ethane propane, the company announced in 2011.

Chovanec said this will be a growing market and more propane export facilities will likely be announced.

For the NGL sector, there is over 2m bbl/day of pipeline expansions underway for completion by 2015, said Chovanec, and Enterprise has a hand in 1.3m bbl/day of the total expansion capacity.

He said fractionators and pipelines will not be at full capacity as soon as the projects come into service. Many pipelines underway will start around 40-50% capacity and incrementally increase by 20 percentage points every couple years, Chovanec said. 

A handful of companies have announced expansions to fractionators. Chovanec said he expects more announcements for expansions to come.

Enterprise has a number of projects underway to relieve the NGL supply glut and bring product to market, said Chovanec.

Last week, Enterprise Products announced its Front Range pipeline with Anadarko and DCP Midstream, which will bring NGL from the Denver-Julesberg Basin in the Rockies to the Gulf coast. The pipeline will begin with a capacity of 150,000 bbl/day and expand to 230,000 bbl/day.

Enterprise is also working on its Appalachia to Texas (ATEX) Express Pipeline to transport ethane from the Marcellus and Utica shale basins to the Gulf coast.

Additionally, the Texas Express Pipeline, which is expected to be complete in the second quarter of 2013, is a project between Enterprise, DCP Midstream and Enbridge.

The pipeline will start near Skellytown, Texas, and extend about 580 miles to Enterprise's NGL facility in Mont Belvieu, Texas. The pipeline’s current NGL commitments are about 252,000 bbl/day.

By: Sheena Martin
+1 713 525 2653

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