Chris Smith
Senior Technology Editor
Rapid development of US shale gas has prompted a spike in domestic NGL production. Up to 75% of this new production will head to fractionators in Mont Belvieu, Tex.,1 with interest in exporting parts of it also growing. Either action will require building new pipelines and other midstream infrastructure.
The renewed ready availability of domestic NGL has reinvigorated demand from the US petrochemical industry, with export demand also growing as US supplies become increasingly price competitive. US extraction rose 38% since 2006 to reach 2.4-million b/d last year, according to Peter Fasullo of En*Vantage Inc., Houston, with bottlenecks emerging both in moving Y-grade material to Mont Belvieu and fractionating it once it arrived there.2
Announced US gas processing additions by 2020 total 15.5 bcfd, with nearly two-thirds of this growth in the Northeast US and Texas. An estimated 1.3-1.8 million b/d of NGL extraction will come on line in the same period.2
Transportation options are expanding to keep pace. New Y-grade capacity includes:2
• 60,000-135,000 b/d from the Bakken shale to the Midcontinent.
• 543,000-660,000 b/d from the Midcontinent to the US Gulf Coast.
• 289,000-415,000 b/d from the Rockies to West Texas and Conway, Kan.
• 580,000-640,000 b/d from West Texas to the US Gulf Coast.
• 200,000-400,000 b/d from the Marcellus and Utica shales to the US Gulf Coast.
Oneok Partners LP completed its 60,000-b/d Bakken NGL pipeline earlier this year, running 600 miles from Oneok and other gas processing plants in the region to a northern Colorado interconnection with the Overland Pass pipeline for further shipment to Conway and the Gulf Coast (OGJ Online, April 15, 2013). The company expects to complete its 193,000-b/d Sterling III pipeline from Medford, Okla., to Mont Belvieu by the end of this year.
Enterprise Products Partners will place an 82,500-b/d Rocky Mountain expansion of its Mid-America Pipeline system in service in third-quarter 2014, looping the existing system with 263 miles of 16-in. OD pipeline and modifying pump stations to move new Uinta, Piceance, and Great Green River basin liquids production to Mont Belvieu.
Williams Cos. and Boardwalk Pipeline Partners LP have proposed a joint-venture NGL pipeline system to transport mixed NGL from the Marcellus and Utica shales to US Gulf Coast petrochemical and export markets. The companies expect the 200,000-b/d Bluegrass Pipeline to enter service in second-half 2015 (OGJ Online, Mar. 7, 2013).
A number of projects are also under way to move batched or dedicated flows of ethane from production centers to consumers. Sunoco Logistics Partners LP and MarkWest Energy Partners LP's Mariner West pipeline will move 65,000 b/d of ethane from the Pennsylvania section of the Marcellus shale to Sarnia, Ont., starting the middle of this year. Mariner East will follow in first-half 2015, moving 40,000 b/d of ethane for export from Sunoco's Marcus Hook, Pa., terminal. The companies expect the pipeline to start delivering propane as early as second-half 2014 (OGJ, Feb. 4, 2013, p. 88), with the total initial capacity of the line 70,000 b/d but expandable if demand grows.
In between, the Vantage pipeline will move 40,000-60,000 b/d of ethane to Edmonton-Fort Saskatchewan from the Bakken shale by the end of this year, with Enterprise Products Partners LP's 190,000-b/d ATEX pipeline between the Marcellus shale and the US Gulf Coast following in first-quarter 2014 (OGJ Online, Aug. 31, 2012).
Exports
US propane exports are projected to grow to 400,000 b/d by 2018, with an additional 200,000 b/d of butane on top of that. Combined export capacity will reach 800,000 b/d by 2015 and maintain that level through 2018, creating 200,000 b/d of surplus capacity.1
Enterprise earlier this year completed an expansion of its Houston Ship Channel low-ethane propane export terminal to 250,000 b/d from 133,000 b/d, also increasing its ability to load fully refrigerated butane and isobutene at the site. Enterprise is considering another expansion of its Houston Ship Channel terminal, to 333,000 b/d by start of 2015 (OGJ Online, Mar. 7, 2013).
Targa Resources will bring 67,000 b/d of fully-ref low-ethane propane capacity on line at its Galena Park, Tex., terminal by third-quarter 2013 (OGJ, May 7, 2012, p. 109), expanding by another 67,000 b/d by third-quarter 2014.1 Targa also plans to add an HD-5 de-ethanizer at Mont Belvieu third-quarter 2013.
Based on the Mariner East pipeline, Sunoco plans to begin 25,000 b/d of propane exports from Marcus Hook third-quarter 2014.
Energy Transfer Partners LP, Sunoco Logistics, and Regency Energy Partners LP are jointly evaluating an NGL export terminal at Nederland, Tex., to enter service in early-2015. A Sunoco pipeline would connect ETP's Lone Star fractionator in Mont Belvieu to the Sunoco export terminal (OGJ Online, Feb. 27, 2013).
Coastal Caverns Inc. (CCI), a unit of the Vitol Group, entered into a joint development agreement with Itochu Corp. for an LPG export terminal drawing on CCI storage under development on the Spindletop dome near Beaumont. Phase 1 of the project will include 6-million bbl propane and butane storage and 100,000 b/d of processing and export capacity, with Phase 2 doubling the export capacity. The companies expect to start operations at the terminal in fourth-quarter 2014.
Williams and Boardwalk are exploring development of a new LPG export terminal near Lake Charles, La., to accompany the Bluegrass Pipeline. Occidental purchased property near Corpus Christi, Tex., to build a fractionator and export terminal supplied by Eagle Ford shale liquids.
Current US Gulf Coast NGL salt-dome storage totals 445-million bbl.2 In addition to the CCI expansion near Beaumont, Targa is adding between two and four brine ponds at Mont Belvieu, with Onoek also expanding its 14.6-million bbl of storage capacity there. Inergy is adding 9-million bbl near Tres Palacios, Tex.
Boardwalk is expanding its ethane and propane storage in Louisiana in conjunction with both the Bluegrass Pipeline and its potential export terminal. Initial expansion of ethane storage at its Choctaw hub and propane storage at Sulphur hub is to be completed by the third quarter of this year. ETP is expanding its brine pits, working on an ethane cavern, and converting a cavern to Y-grade storage.2
References
1. Braziel, E.R., "The New Geography of NGL Production: All Roads Lead to Mont Belvieu," Annual GPA Convention, San Antonio, Tex., Apr. 9, 2013.
2. Fasullo, P., "Reshaping the NGL Value Chain: Challenges and Opportunities," Annual GPA Convention, San Antonio, Tex., Apr. 9, 2013.