Fractionation capacity is an underappreciated constraint in the US NGL value chain, and the limits are being tested. Rapid growth in NGL supply has most fracs running at full throttle, with bottlenecks beginning to surface at Mont Belvieu.
In the NGL Hub Model, East Daley Analytics expects fractionation utilization at Mont Belvieu to edge above 101% in 1Q26, signaling a market operating beyond nameplate capacity.
Y-grade output from gas processing plants must be fractionated into purity products before it can be consumed at scale, making fractionation a critical step in the value chain. When capacity is tight, even minor disruptions can cascade through the system: Y-grade inventories build faster than they can be processed, forcing barrels to back up into storage.
East Daley expects capacity to loosen in 2Q26 with the startup of Targa Resources’ (TRGP) 150 Mb/d Train 11, followed by Energy Transfer’s (ET) 165 Mb/d expansion in 4Q26. Even so, we expect Targa’s new capacity to fill quickly, with total Mont Belvieu utilization once again edging above 100% in 3Q26.
See East Daley’s NGL Hub Model for more details. We forecast an average quarterly contribution of $215MM from Targa’s Logistics and Transportation assets, which include fractionation assets. Fractionation remains the choke point in the NGL value chain, and control of capacity will determine who captures value as production continues to grow. – Julian Renton Tickers: ET, TRGP.
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