Frac Spread: Ethane Hits 12-Week High

Prices and margins improve across the NGL spectrum.

Frac Spread 0905

(Source: Shutterstock, HartEnergy.com)

Mont Belvieu, Texas, ethane continued its—dare we say it—rally last week, climbing to a 12-week high as NGL almost uniformly demonstrated strong pickups in price.

Since its average weekly price dropped dangerously close to single digits at the end of July, Mont Belvieu ethane has soared 68% and its margin has turned around from -4.24 cents per gallon (gal) to almost 2 cents/gal.

Demand is primed for a surge with the completion of Sasol Ltd.’s Lake Charles (La.) Chemicals Project, though the nearly $13 billion facility continues to be plagued by delays. Still, ethane should clear 20 cents/gal in September, EnVantage Inc. predicts, in anticipation of that project and other crackers.

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Joseph Markman

Joseph Markman, senior editor for Hart Energy, covers markets and provides data analysis for all Hart Energy editorial products.