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NGLs Week

NGLs Week Newsletter  

PetroChem Wire and Genscape have partnered to create NGLs Week, a comprehensive summary of price trends, upstream and downstream costs, operations news and supply/demand forecasts. The report contains everything you'll need to understand what's happening in the NGL markets.

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ANALYSIS--NGLs: The Year Ahead

HOUSTON, January 5, 2016 (PCW) -- With NGL prices hitting multi-year lows in 2015, the market is looking to 2016 to provide some price support in the form of incremental demand.

While the world-scale crackers that could soak up much of the supply overhang are still a few years away, several cracker expansions and greenfield export terminals coming online should help to soak up some of the supply overhang (see list below).

However, NGL production continues to grow with the EIA reporting on Thursday that supplies hit record highs of 106.269 million barrels in October after a brief dip in September (see News, this page). Still, compared to 2014 levels, production appears to be slowing (see Forecast, page 6).

But in 2016, helping to process and transport more of those burgeoning supplies are an additional 385,000 b/d of fractionation capacity, about 3.7 Bcf/d of natural gas processing capacity (mainly in PADD III) and nearly 850,000 b/d of NGL pipeline takeaway (again, mainly in PADD III).

From a price perspective, 2016 forward values of NGL purity products (see page 1) finished 2015 lower compared to the beginning of the year, reflecting some of these bearish fundamentals, while also being relentlessly pressured by softer crude and natural gas futures. -- Samantha Hartke

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