How to Predict Price of NGLs – The Spread Between Oil & NatGas

Here’s a little known factoid that will be useful for anyone wondering what the price of NGLs (natural gas liquids) will bring in a given market at a given time. The U.S. Energy Information Administration (EIA), our favorite government agency, points out NGLs almost always fetch prices that are “range-bound” between the price of oil on the high end, and the price of natural gas on the low end. Natural gasoline (an NGL) tracks closest the high end and the price of crude oil, while ethane is at the bottom of list closest to the price of methane.
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PTT Signs Contract with Mountaineer NGL Storage Hub for OH Cracker

Just yesterday MDN told you about one expert’s view that there won’t be one massive NGL storage hub built in the Marcellus/Utica, but a number of smaller hubs (see Expert Says Massive Appalachian NGL Storage Hub Won’t Get Built). One of the smaller hubs we highlighted is the Mountaineer NGL Storage project. Lo and behold…yesterday PTT Global Chemical, the Thailand-based petrochemical giant seeking to build a giant ethane cracker plant in Belmont County, OH, signed a contract with Mountaineer to use their NGL storage services when/if the mighty cracker gets built.
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Expert Says Massive Appalachian NGL Storage Hub Won’t Get Built

Last week MDN brought you details of the Appalachian Storage Hub Conference coming to the Pittsburgh area (and online) on August 27 (see Appalachian Storage Hub Conference Aug 27: In-Person and Online). ShaleDirectories.com, the conference organizer, has just released details about one of the featured speakers for the event. Mike Tritt, President and CEO of Lane Power and Energy Solutions Inc., is an expert on building natural gas liquids storage facilities. Tritt has some interesting and likely controversial things to say about the planned Appalachia Storage and Trading Hub.
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Shell Stops Adding Workers at Cracker Site After New Virus Cases

When the COVID-19 coronavirus hit, Shell stopped all work on its mighty cracker plant in Beaver County, PA, sending nearly 8,000 workers home in mid-March for what was thought to be “a few days to a few weeks” (see Shell Shuts Down SWPA Cracker Plant Construction re COVID-1). In early May Shell began bringing back 300 workers each week. Roughly 3,500 work on-site now. Because of a spike in new coronavirus cases among workers, Shell has temporarily stopped adding back new workers.
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Appalachian Storage Hub Conference Aug 27: In-Person and Online

MDN is happy to help promote the 4th Annual Appalachian Storage Hub Conference coming August 27. This conference provides comprehensive information about the development of the petrochemical industry in the Appalachian Basin. Here’s the exciting part: You can attend the event in-person at the Southpointe Office Park (near Pittsburgh), or for the first time, attend online virtually. At this event, you’ll hear…
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Trump DOE Report Backs Cracker, Petchem Investment in Marc/Utica

In April 2019 President Trump issued an Executive Order instructing the U.S. Dept. of Energy (DOE) to assess opportunities to promote growth in the Appalachian region. Yesterday a report was released by DOE doing just that. The 75-page report is titled “The Appalachian Energy and Petrochemical Renaissance: An Examination of Economic Progress and Opportunities” (full copy below). The report not only outlines petchem opportunities in the Marcellus/Utica, it makes recommendations to put those opportunities on steroids.
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M-U Pipelines Continue Construction Despite Pandemic, Lawsuits

Two of the largest not-yet-completed pipeline projects in the Marcellus/Utica, Mountain Valley Pipeline (MVP) and Atlantic Coast Pipeline (ACP), are currently on hold with no construction activity due to various legal challenges by Big Green (see today’s story, Mountain Valley Pipe Update: Done and In-Service Early 2021). However, there are several other large and small M-U pipeline projects where construction continues, even with restrictions from the coronavirus pandemic. Which pipelines?
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Marcellus/Utica NGL Production & Exports – Shortage Coming?

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The Marcellus/Utica region is a tale of two shales. One is dry gas, or methane only, and the other is methane plus NGLs–other hydrocarbons that come out of the hole along with methane, including ethane, propane, butane, and few others. NGL production can turn a breakeven or possibly money-losing venture into a profitable venture. The wet gas area is located in portions of southwestern PA, eastern OH, and the northern panhandle of WV (see the map). Given the pandemic, fluctuating natgas prices, curtailments, and the general craziness in the markets, what do the next 12 months look like for NGL production in the M-U?
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Philly Petchem Workers Isolate 28 Days to Make Virus Equipment

Marcellus/Utica propane flows from eastern Ohio and southwestern Pennsylvania all the way to southeastern PA via the Mariner East pipelines (ME1 and ME2). A petrochemical facility operated by Braskem America in Marcus Hook (near Philadelphia) processes some of that propane, turning it into polypropylene–the raw plastic used to make N95 masks, hospital gowns, and sanitary wipes–items in critical demand right now to protect health care workers against the COVID-19 coronavirus. This will bring tears to your eyes as it did ours: Some 40 workers at the Braskem plant voluntarily decided to stay at the plant for 28 days straight–working 12-hour shifts–not leaving once during that time so they could be sure of no COVID contamination while they worked to make polypropylene that in turn would be used to make personal protective equipment for healthcare workers. We salute them one and all!
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With Condensate Near $0, Utica Drillers Shift Permits to Dry Gas

Last week MDN highlighted an article from the Pittsburgh Post-Gazette about the low low prices Marcellus/Utica condensate has fetched since the beginning of the year (see M-U Condensate Prices Briefly Go Negative, Down 91% from Jan 1). S&P Global is currently reporting prices for Utica condensate have not yet recovered, sometimes still dipping into negative territory. As a result, drillers are reducing their new permits and drilling in “wet gas” areas of the Utica and instead shifting gears to “dry gas” regions.
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PA Petrochemical Growth May Happen Due to…Coronavirus?

Quick: What’s the raw material used to make respirator masks, gloves, face shields and other high-demand products used by the medical community to combat the coronavirus pandemic? Correct, it’s plastics. And what is the primary feedstock used to make the plastic that in turn makes all of those live-saving products? Correct again: natural gas and natural gas liquids. Or another word for it, petrochemicals. The “Think About Energy” seminar series, usually held in-person, hosted its first virtual event yesterday. Four fantastic speakers spoke about how the coronavirus pandemic, among other things, may drive the expansion of petrochemicals in PA. Expanding the petchem industry in the Keystone State may literally be a life or death issue.
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Enverus Finds Bright Spot in the “Dark Side of the Boom”

Enverus, a leading oil and gas SaaS and data analytics company, has just released its latest FundamentalEdge report called, “The Dark Side of the Boom.” The report focuses on the new global supply and demand outlook since the failure of OPEC+ to reach an agreement on temporary production cuts resulting in an all-out price war. It also takes into account the effects on world energy demand as a result of the coronavirus. The report covers not only the crude oil situation but also natural gas, NGLs, rig count changes and more. What “overlooked bright spots” does Enervus find in a sea of bad news?
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M-U Condensate Prices Briefly Go Negative, Down 91% from Jan 1

The Pittsburgh Post-Gazette is reporting Marcellus/Utica condensate, produced in places like southwestern Pennsylvania and eastern Ohio, briefly touched and went below $0/barrel last week, before recovering slightly. The article says the price M-U drillers are getting for condensate is down 91% from January of this year. What’s lacking in the Post-Gazette story is context for how important (or not) condensate is as a revenue stream for M-U drillers.
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How Oil Crash/Virus has Altered Future of NatGas, NGLs, Midstream

Everyone, and we mean everyone, is still reeling from the double shock of the COVID-19 coronavirus and its effect on the world economy, and the Saudis and Russians pumping more oil, driving oil prices into the ground. Frankly, the COVID-19 virus is the bigger deal. It will have long-lasting effects for years to come on the U.S. economy, including a big effect on the oil and gas industry. The question is, what kind of effect? Is there any way to predict what may happen in the coming couple of years and longer? No one can really predict, but if anyone could, it would be the bright minds at RBN Energy. They’ve attempted the near-impossible: Try to predict how things will change following the COVID-19 lockdown (around March 6). Try to divine how the oil and gas (and NGL and midstream) worlds will change in the coming months and years. Their assessment is sobering.
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Ohio NGL Storage Permit Expires, Builder Says Project Still Alive

Mountaineer NGL Storage is planning to build an NGL (primarily ethane) storage operation in Monroe County, OH, located just across the river (and border) from West Virginia. Last summer David Hooker, president of Mountaineer and president of the parent company Energy Storage Ventures (located in Denver, Colo.) announced the project had received all necessary permits to begin construction, and that construction “could” begin by the end of March this year (see Mountaineer NGL Storage Says Construction Begins in OH 1Q20). One teeny tiny problem. One of the necessary permits needed for the project expired last week. What’s going on?
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