Executive Summary: Infrastructure: Range Resources (RRC) said it has committed to 20 Mb/d of takeaway and export capacity at a new East Coast terminal. Rigs: The US rig count decreased by 3 during the week of February 9 to 543. Flows: US pipeline samples declined 0.6 Bcf/d for the February 16 week to 69.8 Bcf/d, dragged lower by a major winter storm. Calendar: NGL-focused Western Midstream (WES) and Kinetik (KNTK) reported this week.
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Infrastructure:
- Range Resources (RRC) confirmed it has committed to 20 Mb/d of takeaway and export capacity using a new East Coast terminal with an in-service date of 2026. Energy Transfer (ET) is expanding its Marcus Hook terminal, and that project includes a 900 Mbbl refrigerated ethane storage tank and 20 Mb/d of incremental ethane chilling capacity. ET noted the project will allow for quicker loading of Very Large Ethane Carriers (VLECs), which is beneficial to customers like RRC.
- This project is one East Daley has speculated about here and here. What’s interesting about RRC’s contract is the mention of sending NGLs to a new East Coast terminal. EDA has contacted RRC to confirm the project is located at the Repauno terminal in Greenwhich, NJ, near Marcus Hook but on the other side of the Delaware River (near Philadelphia). RRC could be using Marcus Hook for ethane exports and Repauno for LPGs, but we have not yet confirmed this is the case.
- Northeast liquids-rich producers have grown NGL production by 7.7% 3Q24 to 4Q24 so far (see graph below). Furthermore, Northeast producers like RRC and Gulfport Energy have guided to continued growth, which will increase utilization of existing NGL egress and necessitate the newbuild by ET.
- EDA expects most NGL production growth will come from the Permian Basin. EDA’s outlook for Y-o-Y growth by region is shown in the map below from our Energy Data Studio. Permian growth in Y-grade NGLs from ’24 to ’25 avg to avg is 367 Mb/d, for example. Permian gas is needed to meet an increase in LNG and data center demand, and NGLs will be produced along with that gas supply growth. However, there are other pockets of potential supply growth needed to meet growing international petrochemical demand. The Northeast is one region with upside as infrastructure capital unlocks that capability.
Rigs:
The US rig count decreased by 3 during the week of February 9 to 543. Liquids-driven basins decreased by 5 W-o-W to 454.
- Permian – Midland (-3): Diamondback Energy, Occidental Petroleum and Civitas Resources
- Bakken (-2): Continental Resources and ConocoPhillips
- DJ (-1): Dunamis Energy Operating
- Uinta (-1): Ovintiv
- Eagle Ford (+1): Crescent Energy
- Powder River (+1): Ballard Petroleum
Flows:
Total US pipeline volumes have decreased from February's peak levels but remain above the exit levels observed in January. Natural gas pipeline samples declined 2.9% W-o-W for the February 23 week, dropping from 69.9 Bcf/d to 67.8 Bcf/d.
Liquids basins experienced the most significant decline, down 6.6%. The Anadarko Basin saw the steepest drop, averaging a loss of ~650 MMcf/d. The Permian Basin, despite a weak correlation between pipeline samples and actual production, also fell around 425 MMcf/d. However, this drop may be overstating any real production decline.
Gas basin samples decreased 1.7%, with nearly all the decline coming from Appalachia (~700 MMcf/d) while the Haynesville remained steady. These two basins will be crucial to monitor in the coming months, as they will need to ramp up production. This is particularly important as total US storage has fallen below the 5-year average following substantial withdrawals in February.
*W-o-W change is for the two most recent weeks.
Data Points & Product Release Calendar: