- US NGLs used by customers for power generation
- Company sees record-high transport volumes in Q3
A recent news article published in the Platts states that enterprise convinced export customers seeking US NGLS as LNG alternative.
NGLs exports by the US
US midstream operator Enterprise Products Partners considers NGLs exports by the US to be an increasingly attractive option for international customers, with high LNG prices forcing some to turn to cheaper sources of power generation.
“I’m absolutely convinced that some of what we export is being burned, especially in Asia,” Enterprise co-CEO Jim Teague told investors during a third quarter earnings call Nov. 1. “I know one company that is [burning ethane] as you can land ethane cheaper than LNG at times.”
Energy supply tightness in Europe and Asia, caused partly by Russia’s invasion of Ukraine and ensuing sanctions, has led to a boom in global LNG demand and pricing in 2022. Enterprise Products expects these higher LNG prices to lead to sustained higher demand for NGLs like ethane and LPG that can be used as alternative sources of fuel.
“That ethane dock is going to stay full and that LPG dock is going to stay full,” Teague said Nov. 1, adding that the company is “back on the road travelling internationally” as it looks to broker more business with international customers around its NGLs, crude oil and refined products export businesses.
Enterprise transported a record-high 11.3 million b/d equivalent of NGLs, crude oil, natural gas, refined products and petrochemicals across its US pipeline segment in the third quarter. The company also recorded a few quarterly operational records in its NGLs business, including a record-high 1.37 million b/d in NGLs fractionation volumes and record-high ethane exports from its Morgan’s Point Ethane Export Terminal near Houston.
Permian gas processing
Enterprise said that a recent dip in gas prices at the Waha pricing hub in West Texas has only further incentivized gas processors in the Permian Basin to extract every molecule of ethane possible from the gas stream.
“If you look at the Waha spread right now there’s a very healthy incentive for every single plant that can recover ethane to recover,” Tug Hanley, Enterprise’s SVP of pipelines and terminals, told investors on the call. “But as far as older plants [in the Permian] there’s probably 50,000-75,000 b/d that cannot be recovered due to older technology.”
Despite declining significantly from levels recorded earlier this year, US ethane prices are largely holding steady with year-ago levels. Ethane prices at the Mt. Belvieu pricing location in Texas closed Oct. 31 at 41.1 cents/gal, roughly in line with the 42 cents/gal mark recorded on the same day a year ago, according to data from S&P Global Commodity Insights.
Enterprise processed a record-high 5.2 Bcf/d in its fee-based gas processing business in Q3, compared to 4.0 Bcf/d in Q3 2021.
Crude, gas outlook
Enterprise’s gas pipelines business transported a record-high 17.5 Bcf/din Q3, compared to 14.6 Bcf/d in the same period in 2021, amid a sustained uptick in oil and gas production in the Permian and other production areas. While gas prices have moderated in recent months from levels between $7-$9/MMBtu recorded earlier this year, the company still expects strong crude prices to drive production growth in the Permian in 2023, even if gas prices ease to levels around $3/MMBtu in 2023.
“The gift that producers were given when they were able to achieve $4-$5/MMBtu gas prices is what it was — a gift,” Enterprise Chief Commercial Officer Brent Secrest said Nov. 1. “I don’t think where Waha is trading at changes the mentality because it’s still a pretty healthy number for 2023.”
Enterprise moved 2.2 million b/d on its crude oil pipelines in Q3, up from 2 million b/d in Q3 2021. The company moved 824,000 b/d of crude through its marine terminals in the period, up 40% from the same period in 2021.
Enterprise recorded net income of $1.4 billion in Q3, up from $1.2 billion over the same period in 2021.
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Source: Platts
