Executive Summary: Rigs: The total rig count remained flat for the January 19 week at 531. Flows: US flow samples rebounded 3.1 Bcf/d (+4.7%) during the February 2 week to an average of 69.98 Bcf/d. Infrastructure: ONEOK (OKE) and MPLX (MPLX) have partnered to build out the downstream component of their NGL value chain, cementing their position as one of 6 large integrated energy companies transporting Permian supply growth to international NGL markets.
Rigs:
The total rig count remained flat for the January 19 week at 531. Liquids-driven basins increased by 1 rig W-o-W.
- Anadarko (+3): Double G Petro, Axia Energy, Eckard Operating
- Bakken (-2): Conoco Phillips, Continental Resources
- Permian (2):
- Delaware (-3): Devon Energy, Chevron, CPX Energy Operating
- Midland (+1): Occidental Petroleum
- Eagle Ford (+1): Verdun Oil Company
Flows:
US flow samples rebounded 3.1 Bcf/d (+4.7%) during the February 2 week to an average of 69.98 Bcf/d.
Samples rose W-o-W in nearly every basin, including a 5.5% gain in the Northeast, a 7.1% increase in the Permian, and an 8.3% W-o-W gain in the Anadarko Basin. Samples for the week were the highest since December ’24.
The big gains followed a period of lower delivery earlier in January caused by a powerful winter storm. The polar vortex brought frigid temperatures to most of the Lower 48 over January 20-26, reducing flows in many basins when wells froze over. But flows have recovered as temperatures warmed in late January. A surge in cash prices during the extreme weather also may have prompted some producers to restart shut-in wells.
*W-o-W change is for the two most recent weeks.
Infrastructure:
ONEOK (OKE) and MPLX (MPLX) have partnered to build out the downstream component of their NGL value chain, cementing their position as one of 6 large integrated energy companies transporting Permian supply growth to international NGL markets.
The Deal: Texas City Logistics is a 50/50 JV that includes a 400 Mb/d LPG export terminal in Texas City, TX. MPLX will construct and operate the facility, with an in-service date expected in early ’28. MPLX and OKE will each contribute $700MM for a total investment of $1.4B. Each party has contracted for 200 Mb/d of capacity at the low ethane propane (LEP) and NC4 terminal.
MBTC Pipeline LLC is an 80/20 JV owned by OKE (80%) and MPLX (20%), with OKE to construct and operate the pipeline held in the JV. The 24-inch bi-directional pipeline will run from OKE’s Mont Belvieu storage facility to the new LPG export site. The companies estimate the pipeline cost at $350MM, ($280MM net to OKE and $70MM net to MPLX).
What We Like: This deal cements MPLX and OKE as one of the 6 integrated companies able to connect Permian NGL supply to growing NGL demand internationally. EDA has speculated an announcement like this would happen here and here in the bid to jockey for NGL value chain relevance.
Separately, MPLX also announced two 150 Mb/d fractionators with an ISD of ’28 and ’29. These fractionators will cost an estimated $2.5B and are added to the list of other newbuild fractionators and de-ethanizers noted below.
The Knock -On Effect: On its recent 4Q24 earnings call, MPLX said the timing of its fractionation expansion projects coincide with the ability to redirect NGL production from third-party fractionators to its own fracs. MPLX’s 1.2 Bcf/d G&P Delaware Basin system is currently connected into EPIC’s Robstown fractionator (via BANGL) and PSX’s fractionation complex (via BANGL and Sand Hills), posing risk to PSX’s legacy and newly acquired downstream assets. This only emphasizes EDA’s belief that PSX is on the hunt for Permian G&P assets, as we outlined in a recent webinar to clients.
Data Points & Product Release Calendar:
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