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NGLs Week is PetroChem Wire's 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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More NGL infrastructure planned for Permian on robust supply growth

HOUSTON, June 29, 2017 (PCW) -- The Permian Basin is one of the most prolific and economical plays in North America and, arguably, the world. Although it is primarily a crude play, it also contains plentiful amounts of associated natural gas and NGLs and has encouraged a wealth of new infrastructure aimed at bringing those supplies to the Mont Belvieu hub.

Permian NGL production is currently around 500,000 b/d with various analyst forecasts putting it between 700,000-850,000 b/d in 2020. Its raw NGL values are the second-highest priced in the US after the DJ Basin, thanks to the larger amounts of the more premium-priced normal butane and natural gasoline in its regional barrel, according to PetroChem Wire estimates.

The area, which has long been a source of major drilling, already has its fair share of NGL pipelines (predominantly Y-grade lines) and processing plants. The major trunklines and facilities include:

-- DCP Midstream’s 280,000 b/d Sand Hills Y-grade NGL pipeline, which runsfrom the Permian and Eagle Ford to Mont Belvieu, and two fractionators with acombined capacity of 35,000 b/d.

-- Enterprise Products Partners’ 280,000 b/d Seminole pipeline, from the 75,000b/d Hobbs hub in the Permian to Mont Belvieu; the 135,000 b/d Chaparral pipeline from New Mexico through the Permian to Mont Belvieu.

-- Oneok’s West Texas LPG 250,000 b/d pipeline, transporting supplies from thePermian and southeastern New Mexico to Mont Belvieu.

-- Targa has 10 processing plants in the Permian with a combined capacity of 1.2Bcf/d and 95,000 b/d of NGL production.

-- Energy Transfer’s assets include the 507,000 b/d Lone Star Express Y-grade pipeline from the Permian and Barnett Shale to Mont Belvieu; the 240,000 b/d West Texas Gateway Y-grade pipeline from the Permian and Delaware basins and the Eagle Ford to Mont

But the current crop of infrastructure does not service the Permian alone with the basin’s supplies often coming along for the ride alongside production from other fields. With expectations running high about Permian supplies through the end of the decade, new or expanded infrastructure has recently been announced, which could increase takeaway capacity by at least 39%. These include:

-- DCP’s Sand Hills expansion to 365,000 b/d from 280,000 b/d in 4Q;

-- EPD’s 571-mile, 250,000 b/d Shin Oak Y-grade pipeline from the Hobbsfractionation facility in Gaines County, Texas, to Mont Belvieu. The line could be expanded to 600,000 b/d and is expected to come online in 2Q 2018;

-- Targa’s 300,000 b/d Grand Prix Y-grade line from the Permian and Targa’s NorthTexas system to its Mont Belvieu facility. The pipeline could be expanded to 550,000 b/d. It is expected to go into service by 2Q 2019. -- Samantha Hartke

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