•EIA NGL production was essentially unchanged M-o-M for May, as rig counts dropped off across most basins. However, production remains +8% Y-o-Y. We expect production will only grow slightly through the end of the year as new processing plants are added in the Permian, offset by lower ethane recovery as more gas egress capacity comes online in the basin.
•Ethane demand has been especially high this year, driven by both domestic consumption and exports. PADD 1 especially saw significant growth in May as ethane exports jumped 17%. Recovery has generally been high this year to match the higher demand, but took a dip in May, driven by the TX Inland (-3% M-o-M) and the Northeast (-8% M-o-M).
•The decrease in Permian ethane recovery in May was likely due to lower frac-spreads, which averaged ~$0.12/gal for the month. Ethane prices since jumped 50%+ in July and sent frac spreads to $0.21/gal, however that may be due to high temperatures impacting Permian processing plants’ ability to recover ethane. We expect recovery to slow down based on the current forward curve and Permian gas egress expansions coming online in 4Q22. In the Northeast, ethane recovery continued to be impeded due to ongoing disruptions at Shell’s Monaca Cracker.
•Interested in tracking basin and sub-basin NGL production, ethane rejection, and fractionator utilization? EDA’s NGL Network Model and Purity Product Forecast will help you dig deeper than EIA data and connect the dots between NGL supply and demand.
The NGL Roundupreviews monthly NGL data from EIA and East Daley’s own basin-level supply forecasts of Y-grade and NGL purity products. Follow key NGL data trends:
NGL production by basin
Supply forecasts by NGL purity product
Ethane recovery by basin
Historical and future NGL prices
Conway and Mont Belvieu frac spreads
NGL storage trends
Regional NGL exports
The NGL Roundupis East Daley’s latest product driving transparency to energy markets. We provide a FREE snapshot of data from ourNGL Network ModelandPurity Product Dataset.These reports tie our NGL supply forecasts to downstream markets, providing asset-specific insights such as pipeline and fractionation volumes and rates.
We use our patented method to monitor midstream flows from processing plants to fractionation centers, identifying infrastructure bottlenecks before the market recognizes them. Using a bottoms-up approach to supply, we go deeper than the PADD or sub-PADD level to truly understand what is happening on the ground in NGLs.
