Ethane supply hit another record in Nov '24, now the fifth monthly record high in 2024 per EIA data. The Permian Basin has been the primary driver of ethane and NGL supply overall, but the Marcellus and Utica are also contributing to the NGL growth party.
East Daley forecasts NGL production and flows from the Northeast (Marcellus+Utica) in the NGL Hub Model. The region had back-to-back record months of ethane supply in Oct ’24 and Nov ’24, according to the Energy Information Administration (EIA), while propane also achieved an all-time high in November. This bodes well for Northeast producers that target rich-gas areas of the Marcellus and Utica.
Antero Resources (AR), EQT Corp (EQT), Range Resources (RRC) and several other producers report NGL production that's highly correlated with Northeast NGL supply overall (see figure). Because of that, East Daley expects these operators to report strong volumes and earnings. (Note: AR this week reported an 8% increase in 4Q24 liquids production.)
Through Nov ’24, NGL production is up 10% vs 3Q24. Similarly, MPLX (MPLX) saw Marcellus fractionation grow 17% from 3Q24 to 4Q24 – a positive read-through for AR and RRC specifically, as data in East Daley’s Energy Data Studio shows.
The production growth underscores the need to build new demand outlets in the Northeast. As EDA has written about before, Marcus Hook is relatively constrained already, and the tea leaves suggest Energy Transfer (ET) is close to announcing a final investment decision (FID) to expand the export facility that accesses European petrochemical markets. On its 4Q24 earnings update on Feb. 11, ET guided to a $1.1B capital budget on NGL projects in 2025, including spending on the Marcus Hook optimization project.
MPLX is doing its part close to the wellhead by expanding the Harmon Creek III processing facility and adding fractionation and de-eth capacity (see map). If ET moves ahead with the Marcus Hook expansion, we anticipate these plans will facilitate NGL growth for AR and RRC. – Rob Wilson and Julion Renton Tickers: AR, EQT, ET, MPLX, RRC.
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