Mont Belvieu natural gas liquids (NGLs) frac spread margins were more improved this week than their Conway counterparts, although the two largest margin improvements for any single NGL were both recorded at Conway.
The Conway ethane margin was up 10% and the Conway butane margin increased 6% from the previous week. The largest margin increase at Mont Belvieu was for butane, which rose 4%. The largest decrease in margin at both hubs was for propane, which was down 3% at Conway and 2% at Mont Belvieu.
The most profitable NGL to make at both hubs was C5+ at US$1.29 per gallon (/gal) at Conway and $1.27/gal at Mont Belvieu. This was followed, in order, by iso-butane at $1.07/gal at Conway and $1.17/gal at Mont Belvieu; butane at 94¢/gal at Conway and $1.01/gal at Mont Belvieu; propane at 78¢/gal at Conway and 77¢/gal at Mont Belvieu; and ethane at 29¢/gal at Conway and 41¢/gal at Mont Belvieu.
Natural gas in storage finally seems to have worked off its excess volumes due to the frigid winter experienced throughout the country. For the week of February 19, the most recent data available from the U.S. Energy Information Administration was down 172 billion cubic feet to 1.853 trillion cubic feet (Tcf) from 2.025 Tcf reported in the previous week. This represented a 3% decline from the storage level of 1.909 Tcf reported last year at the same time and is just 1% greater than the five-year average of 1.840 Tcf.
However, just as this overhang has been worked off, the frigid temperatures have exited from the highly important Northeast corridor where temperatures have been normal for this time of year. The U.S. National Weather Service is predicting this region to experience warmer than usual weather. These temperatures will extend into the Great Lakes region with the Mid-Atlantic and much of the Midwest experiencing normal late winter temperatures. The Southern and the Rockies’ regions are expected to help keep demand up somewhat as temperatures are predicted to be colder than normal. – Frank Nieto
Current Frac Spread (Cents/Gal) | |||||
Date: March 4, 2010 | Conway | Change from | Mont | ||
last week | Belvieu | last week | |||
Ethane | 60.20 | 72.54 | |||
Shrink | 30.90 | 32.02 | |||
Margin | 29.30 | 10.41% | 40.52 | 2.34% | |
Propane | 120.82 | 121.62 | |||
Shrink | 42.69 | 44.24 | |||
Margin | 78.13 | -2.92% | 77.38 | -2.12% | |
Normal Butane | 142.45 | 150.88 | |||
Shrink | 48.32 | 50.09 | |||
Margin | 94.13 | 6.43% | 100.79 | 3.97% | |
Iso-Butane | 153.70 | 165.10 | |||
Shrink | 46.41 | 48.11 | |||
Margin | 107.29 | -1.84% | 116.99 | 2.36% | |
Pentane+ | 180.50 | 180.16 | |||
Shrink | 51.68 | 53.56 | |||
Margin | 128.82 | 1.65% | 126.60 | 0.12% | |
NGL $/Bbl | 48.08 | -0.24% | 50.20 | 0.16% | |
Shrink | 17.02 | 17.64 | |||
Margin | 31.06 | 1.78% | 32.55 | 0.70% | |
Gas ($/mmBtu) | 4.66 | -3.72% | 4.83 | -0.82% | |
Gross Bbl Margin (in cents/gal) | 71.16 | 1.53% | 76.04 | 0.56% | |
NGL Value in $/mmBtu | |||||
Ethane | 3.31 | 2.68% | 3.99 | 0.92% | |
Propane | 4.19 | -3.20% | 4.22 | -1.65% | |
Normal Butane | 1.54 | 2.76% | 1.63 | 2.33% | |
Iso-Butane | 0.96 | -2.41% | 1.03 | 1.41% | |
Pentane+ | 2.33 | 0.06% | 2.32 | -0.16% | |
Total Barrel Value in $/mmbtu | 12.33 | -0.27% | 13.20 | 0.10% | |
Margin | 7.67 | 1.95% | 8.37 | 0.64% | |
Price, Shrink of 42-gal NGL barrel based on following: Ethane, 36.5%; Propane, 31.8%; Normal Butane, 11.2%; Isobutane, 6.2%; Pentane+, 14.3%, Fuel, frac, transport costs not included. Conway gas based on NGPL Midcontinent zone, Mont Belvieu based on Houston Ship Channel. | |||||
Shrink is defined as Btus that are removed from natural gas through the gathering and processing operation. |
Recommended Reading
What's Affecting Oil Prices This Week? (May 6, 2024)
2024-05-06 - Stratas Advisors forecast that oil demand for 2024 will increase by 1.41 MMbbl/d in comparison to 2023 and that oil demand will increase by 810,000 bbl/d in comparison to 2Q23.
TC Energy Preparing for Natural Gas Demand Surge
2024-05-06 - TC Energy executives expect data centers in Wisconsin and Virginia to drive as much as 8 Bcf/d of natural gas demand for power generation.
It’s Complicated: E&Ps Find Some Financial Tailwinds, But It’s Not All Smooth Sailing
2024-05-03 - Relatively stable WTI prices in the $80s/bbl provide some breathing room as companies allocate cash for operations, and pragmatism is seeping into the energy transition movement.
Pitts: US, Qatar Face off in LNG ‘Olympics’
2024-05-03 - In the LNG exporting space, the U.S. is squaring off with its fiercest competitor, Qatar, with both countries expected to outpace Australia
Chesapeake Stockpiles DUCs as Doubts Creep in Over Southwestern Deal
2024-05-02 - Chesapeake Energy is stockpiling DUCs until demand returns through growth from LNG exports, power generation and industrial activity.