Downstream Technology Editor
With its strategic location along the US Gulf Coast, proximity to major refining complexes, underground storage capacity, and access to onshore and offshore transportation for shipping liquids to market, Mont Belvieu, Tex., continues to attract plans for fractionation expansions alongside North America's flourishing shale gas production. The site is 30 miles east of Houston and above one of the world's largest salt dome formations.
An overview of existing NGL fractionation and storage capacities at Mont Belvieu—the pricing point for North American NGL markets—shows the four operators currently dominating NGL-related activities at the hub intend to retain their market hold as future projects take shape.
Enterprise Product Partners
Enterprise Products Partners LP (EPP) maintains the world's largest NGL complex at Mont Belvieu, with the operator currently using about 38% of its entire 5-sq-mile footprint for fractionation and storage.
In addition to its NGL distribution system of more than 100 pipeline interconnections, EPP's Mont Belvieu holdings include eight NGL fractionators with combined capacity of about 670, 000 b/d. These plants fractionate mixed NGLs from several North American NGL supply centers, including the Eagle Ford shale, Rocky Mountains, Midcontinent, and Permian and San Juan basins, according to EPP's yearend 2013 and first-quarter 2014 filings with the US Securities & Exchange Commission (SEC).
The company also maintains propylene fractionation at Mont Belvieu, with whole ownership of three plants at the site and working interest in an additional three. Combined, the six propylene splitters have a capacity of 95,000 b/d, according to EPP's yearend 2013 SEC filing.
EPP also owns and operates at Mont Belvieu a 116,000-b/d butane isomerization plant consisting of three isomerization units and nine deisobutanizer units as well as an octane enhancement production plant with production capacity of 12,000 b/d for isooctane or 15,500 b/d for methyl tertiary butyl ether, EPP's yearend 2013 filing shows.
Mont Belvieu also serves as its largest underground storage site, where the company maintains 35 underground storage caverns with combined capacity of about 110 million bbl to store and redeliver mixed NGLs and NGL purity, petrochemical, and related products for industrial customers along the upper Texas Gulf Coast.
In addition to its existing operations there, EPP is moving forward with plans for another propane dehydrogenation (PDH) unit designed to take advantage of low-cost propane derived from increased NGL production out of nearby shale gas development (OGJ Online, Mar. 18, 2014; Aug. 6, 2013).
EPP has said it expects the proposed 35,000-b/d PDH unit to be able to produce as much as 1.65 billion lb/year (about 750,000 tonnes/year) of polymer-grade propylene and begin operating in third-quarter 2015 (OGJ Online, June 21, 2012).
Targa Resources LP
With total NGL fractionation capacity of 518,000 b/d, Targa Resources LP maintains the second largest fractionation ownership at Mont Belvieu.
Those fractionation operations center on the company's Cedar Bayou Fractionator (CBF), for which Targa acts as operator and owns 88% interest in a partnership with BP PLC, which owns the remaining 12%.
Until mid-2013, CBF included Trains 1-3, each with a capacity of 100,000 b/d. The start-up of CBF's $385 million Train 4 in August 2013 expanded "gross" fractionation capacity to 353,000-b/d (OGJ Online, Aug. 19, 2013).
Train 4's capacity includes 40,000 b/d of additional butane-gasoline fractionation capacity, the company said in its yearend 2013 filing with SEC.
When it announced plans for Train 4 in 2011, Targa also said it was evaluating another 100,000-b/d Train 5 expansion (OGJ Online, Oct.20, 2011), which would boost CBF's fractionation capacity to 453,000 b/d.
In late December 2013, Targa announced it had formed a joint venture with Kinder Morgan Energy Partners LP to build new NGL fractionation at Mont Belvieu in connection with the planned Utica Marcellus Texas Pipeline (UMTP) to serve producers in the Utica and Marcellus shales in Ohio, West Virginia, and Pennsylvania (OGJ Online, Dec. 20, 2013; Nov. 11, 2013).
While the UMTP does not yet have commitments, the continued success of producers in the Permian, Eagle Ford, and Midcontinent provides other potential commercial needs for Train 5 beyond UMTP, and commercial discussions regarding Train 5 capacity are ongoing, Joe Bob Perkins, Targa's chief executive officer, said in a May 1 quarterly earnings call.
While the timing of Train 5 is subject to the conclusion of commercial agreements, Targa already has secured the permit as well as the land for construction and expects to proceed soon, Perkins said.
Perkins added that the timing of a planned 100,000-b/d Train 6 also remains subject to commercial demand but believes that the project is simply a question of when and not if, according to the May 1 call.
In partnership with Phillips 66 and Devon Energy Corp., Targa also maintains a 38.8% interest in the $92 million, Phillips 66-operated Gulf Coast Fractionator (GCF). GCF's NGL fractionation capacity was expanded to 125,000 b/d in second-quarter 2012, Targa said in its yearend 2013 report to SEC.
The project originally was set to increase GCF's fractionation capacity to 145,000 b/d (OGJ Online, Oct. 11, 2010).
Targa also owns and operates a 30,000-b/d natural gasoline hydrotreater at the southeast Texas site. In 2012, the company completed modifications to the hydrotreater to add the capability to reduce benzene content of natural gasoline to help its customers meet increasingly stringent environmental standards, according to Targa's yearend 2013 SEC filing.
In addition, Targa owns and operates at the site 20 storage wells with combined NGL capacity of 43 million bbl, also acting as operator for another 6 wells owned by Chevron Phillips Chemical Co. LLC.
Anticipating increased NGL flows into Mont Belvieu alongside rising production from North American shale plays, Targa said in a May 1 presentation to investors that it plans to add three more underground storage wells.
Oneok Partners LP
Oneok Partners LP owns the third-largest NGL fractionation capacity at Mont Belvieu, with its current capacity of 235,000 b/d already set for expansion.
Oneok holds an 80% interest in and operates MB-1, a 160,000-b/d NGL fractionator (OGJ Online, Apr. 15, 2013), and has a long-term, third-party fractionation-services agreement for an additional 60,000-b/d NGL fractionation capacity, according to the company's yearend 2013 SEC filing.
In addition to MB-1, in December 2013 Oneok completed its $375 million, 75,000-b/d MB-2 fractionator at Mont Belvieu, the company said in its yearend 2013 report.
The company's Mont Belvieu operations receive either unfractionated NGLs or NGL purity products from growing NGL production in Midcontinent shale regions via a series of Oneok-owned NGL pipelines, the most recent of which—the 540-mile, 193,000-b/d OD Sterling III NGL pipeline—was commissioned in March (OGJ Online, Apr. 23, 2014).
The Sterling III pipeline will deliver NGL production from Cana-Woodford shale and Granite Wash areas as well as from Woodford shale region currently under development, according to Oneok's yearend 2013 filing.
Oneok's Mont Belvieu NGL storage includes cavern capacity of about 14.6 million bbl in a 105-acre area overlying the Mont Belvieu salt dome that the company purchased from Valero Refining-Texas LP in October 2006, according to an Oct. 25, 2006, release from Oneok.
Lone Star NGL
Lone Star NGL, a joint venture between Energy Transfer Partners LP (ETP) and Regency Energy Partners LP, maintains two NGL fractionators at Mont Belvieu for combined fractionation capacity there of 200,000 b/d.
The company most recently placed into service its 100,000-b/d Lone Star Frac II fractionator in November 2013 (OGJ Online, Nov. 4, 2013), with the Frac 1 unit previously completed in 2012 (OGJ, May 7, 2012, p. 88; June 6, 2011, p. 88).
Both fractionators receive NGLs from production from the Permian basin, Eagle Ford shale, and other producing regions via several sources, including Lone Star's West Texas NGL pipelines and ETP's Justice NGL pipeline.
Lone Star maintains a 46-million-bbl NGL storage capacity in 25 underground salt dome caverns, according to a November 2013 presentation by Steve Spaulding, Lone Star's executive vice-president.