Attendees at the recent Marcellus-Utica Midstream conference in Pittsburgh probably wouldn’t have minded going back in time just to tell their 2016 selves, “It gets better.”
The upbeat vibe in the David L. Lawrence Convention Center was reflected by an early-February, 43-month high in the Mont Belvieu, Texas, ethane price. Looking ahead, though, domestic demand will not echo NGL production’s upward tilt.
And it’s not just about ethane.
“The exports are growing, domestic demand is going down,” Bernadette Johnson, vice president of market intelligence for Drillinginfo Inc., warned the conference crowd about her outlook for propane. “We’re growing supplies, and what does that mean? That puts even more pressure on the export piece and that’s because exports are key for LPG.”
Drillinginfo sees propane exports growing from 848,000 barrels per day (Mbbl/d) in 2018 to 1.155 million barrels per day (MMbbl/d) in 2022. In that time, domestic use—which jumped from 350 Mbbl/d in 2017 to 457 Mbbl/d in 2018—will remain static at about 450 Mbbl/d in 2022.
Total supply will increase from 1.305 MMbbl/d to 1.605 MMbbl/d during that time, so export growth needs to kick in.
Same for butanes, she said. Exports are expected to double to almost 400 Mbbl/d in that time frame as domestic demand dips by 5.5%. Natural gasoline paints a similar picture: domestic trends down as exports trend up.
The game-changer in Appalachia is Sunoco Pipeline’s Mariner East 2 pipeline project, Amol Wayangakar of Enkon Energy Advisors told attendees. While progress had been delayed but was restarted in February, the project’s eventual completion will transform the region’s transport of NGL from rail, which now moves 80% of volumes, to pipe.
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