The Daley Note

While NGL fractionators in southeastern Texas are running all out, ample frac capacity is available across the state line in Louisiana. Yet for several reasons, the NGL market may never take advantage of this potential relief valve for growing supply.

Fractionators based in Louisiana are running below 50% capacity, a far cry from the near-100% utilization East Daley Analytics forecasts for fracs in Mont Belvieu, TX. According to the NGL Hub Model, Louisiana fractionators have 680 Mb/d of combined capacity, yet typically only average 30-40% utilization. The low utilization rates leave plenty of capacity to potentially absorb growth in Y-grade production.

Most midstream operators target Mont Belvieu as the preferred market to build fracs and sell NGL purity products. Growth at Mont Belvieu has coincided with investments in several nearby export terminals on the Texas Gulf Coast, creating ready markets for ethane and LPGs.

However, some barrels still move out of the region. Two primary pipelines, Cajun Sibon and LouTex,  move Y-grade from Mont Belvieu to Louisiana fracs. Cajun Sibon and LouTex have a combined capacity of 290 Mb/d, and as of 3Q25, throughput on these pipe averaged 258 Mb/d, or ~89% utilization. In the NGL Hub Model, East Daley’s data provides clear visibility into fractionation volumes in Louisiana.

The data shows that fractionated volumes closely track NGL barrels moving on pipes from Mont Belvieu to fracs in Louisiana (see figure above). This suggests that most of the inbound barrels are being fractionated. Even so, total fractionated volumes remain well below the state’s overall fractionation capacity.

Utilization at Louisiana fracs has increased slowly but steadily since 2022, though pipeline constraints limit further gains. Using the remaining ~30 Mb/d of capacity on Cajun Sibon and LouTex would lift utilization by only a few percentage points, still leaving about half of the state’s frac capacity idle.

Enterprise Products (EPD) and ONEOK (OKE) own most of the unused frac capacity in Louisiana (see figure at right) and are the most exposed to the region’s downstream bottleneck. This creates a potential incentive for these operators to pursue expansion or additional connectivity.

See East Daley Analytics’ NGL Hub Model for more information. While incremental pipeline capacity from Mont Belvieu could support modest volume growth, a more structural solution would involve improving market access out of Louisiana, either through new pipes to Mont Belvieu or direct connections to export infrastructure. Removing these downstream constraints is key to unlocking the full value of Louisiana fracs. – Sam Chen Tickers: EPD, OKE.