The Permian and Williston basins are both constrained by inadequate gas pipeline egress. Yet when it comes to managing the associated ethane, that’s where the similarities end - Permian ethane is valued as a purity product, and Bakken supply plays second fiddle. Market dynamics are likely to change from new pipeline projects that will open markets for Bakken NGLs.
In the Permian, ethane production has hit record highs to avoid low gas prices and leave as much space as possible on constrained gas pipes ahead of the Matterhorn pipeline start-up. While gas takeaway is also constrained in the Bakken, much of the ethane is rejected back into the gas stream because the in-basin netback price is “out-of-the-money” compared to gas, given high transportation costs to market.
Operators’ rejection of Bakken ethane is reflected in the high heating content of gas flowing on Northern Border Pipeline (NBPL) to the Midwest. In recent years, the heating content has increased on NBPL as inbound flows from Western Canada have been displaced by ethane-rich gas from the Bakken.
The egress dynamics will change for natural gas and NGLs when new projects come online. On the natural gas side, TC Energy (TRP) has filed for the Bison XPress project to expand Northern Border Pipeline and reverse Bison Pipeline, adding up to 300 MMcf/d of swing egress from the Bakken. Bison XPress opens the route from the Kurtz meter station in Morton County, ND to the Buffalo meter in Campbell County, WY.
For Bakken NGLs, ONEOK’s (OKE) Elk Creek expansion will open 135 Mb/d of takeaway capacity for Y-grade (mixed NGLs) by 1Q26. Another 85 Mb/d of capacity will come online when Kinder Morgan (KMI) finishes its planned conversion of the Double H crude oil pipeline to NGL service.
East Daley Analytics tracks NGL flows from the Bakken in the NGL Hub Model, plus the Ethane and Propane Supply & Demand purity product forecasts. The Bakken has three main NGL pipeline egress routes (Vantage, Elk Creek, and OKE Bakken) plus six fractionators in the basin that produce C3 and C4+. These NGLs are trucked or railed to local markets. Propane can also be injected into Alliance Pipeline to be processed at the Aux Sable plant in Chicago.
East Daley plans to deliver a monthly Supply and Demand report that will allow clients to take a detailed dive into how purity products move from the Bakken to Canada and the Conway and Mont Belvieu markets. – Maria Paz Urdaneta Tickers: KMI, OKE, TRP.
NEW Webinar – Fast and Furious: Production, Constraints and Opportunity
East Daley will host our latest MCAP webinar on September 25th at 10 am MT. In “Fast and Furious: Production, Constraints and Opportunity,” we will look at opportunities across the energy complex:
- Crude: Double H Conversion's impact on crude fundamentals, and who can capture that upside.
- Gas: What the Blackcomb pipeline means for TRGP's G&P growth in the Permian.
- NGLs: The fight for barrels in the Permian, and the implications of OKE's acquisition of ENLC.
Register here to join us.
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East Daley NGL Insider provides weekly updates on the US NGLs market including supply and demand fundamentals, basin-level views, and analysis of market constraints and infrastructure proposals. We explore sub-basin dynamics and provide market insights on NGL flows, infrastructure, and purity products. Sign up now for the NGL Insider.
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