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USA WOGA Liquids Review
(NGL’s)
Gregg Dighero,
Director, NGL Marketing
Encana Services Company Ltd.
Denver| January 31| 2017
NGLs, LPGs and Purity Products
NGLs seem to exist in the twilight zone
between crude, the basis of all
petroleum products, and natural gas.
NGLs are neither here nor there. They
possess, to differing extents,
characteristics of both oil and gas and
have values and market drivers both
similar to and distinctly separate from
oil and gas.
Source: RBN Energy
What are NGL’s
NGL Products and Physical Properties
Product Structure Abbreviation BTU/gallon
Vapor
Pressure @
100 degrees
Ethane C2 66,340 800
Propane C3 91,563 188.62
Iso Butane IC4 99,630 72.644
Normal
Butane
NC4 103,740 51.567
Natural
Gasoline
C5+ ~110,000
15.567-
20.474
Hydrocarbon Uses / NGL Sources
84%
16%
Source: EIA 2018 Forecast
NGL Barrel
Product
Ethane (C2)
Propane (C3)
Butanes (IC4 & NC4)
Pentanes (C5+)
Demand Type
Petrochemicals
Heating, Power Generation & Agriculture
Refineries
Exports
Supply Demand
Natural Gas Liquid Uses
Source: Encana, EIA
Propane Autogas
Mt. Belvieu NGL Values
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
$110.00
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$/BARRELNYMEXCRUDE
Mt.BelvieuProdcuts$/MMBtu
NYMEX Crude NYMEX Natural Gas Ethane Propane
Iso Butane Normal Butane Natural Gasoline
U.S. Natural Gas Liquids
7
Production Forecast
Source: EIA
Natural Gas Liquids
Major NGL Pipelines
8
Mont
Belvieu
Conway
Sarnia
Marcellus
Western
Canada
Hobbs
South LA
Skelly
Medford
Midwest
Primary Hub
Secondary Hub
Flow Direction
Bakken
West
Rockies
Existing Pipeline
East
Rockies
Source: Encana, EV Maps
Enterprise MAPL
Enterprise
ATEX
ONEOK
Sterling
DCP Sand Hills
Enterprise Eagle Ford
Enterprise
TEPPCO
ONEOK
Bakken
Lateral
Sunoco
Mariner West
Enterprise
Front Range
ONEOK
Overland Sunoco
Mariner East
Y-Grade
Demethanized
Mix
Raw Make
NGL Fractionation Process
Source: Encana, Genscape
10%
2%
14%
1%
14%
48%
2%
8%
Mont Belvieu
Conway
Sarnia
U.S.
Canada
Share of Total Capacity
%
NGL Infrastructure Overview
Fractionation Capacity by Region
Edmonton
NGL Storage
Source: Encana, Genscape
*Estimate based on company reports and assuming 1 barrel of ethane yields 100 lbs. ethylene, and includes announced
plants that may not necessarily come online.
2%
7%
76%U.S.
Canada
5%
Total potential North American ethylene cracking capacity is
about 117 billion pounds per year (equivalent to
approximately 2,300* Mbbls/d of ethane)
Ethylene Cracking Capacity
By Region
10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 1993 1996 1999 2002 2005 2008 2011 2014
Gas Oil
Naphtha
Butane
Propane
Ethane
Low natural gas prices make ethane more competitive in the feedslate compared
to its other oil based competitors.
Percent
USA Natural Gas Liquids
Low Cost Ethane Preferred by Steam Crackers
Source: Jacobs
Petrochemical Products
Things we use everyday……..
Petrochemical Products
Things we use everyday……..
Ethane
C2H6
Ethylene
C2H4
Polyethylene
(C2H4)n
Propane
C3H8
Propylene
C3H6
Polypropylene
(C3H6)n
Propane
C3H8
Propylene
C3H6
Benzene
C6H6+ Cumene
C6H6.C3H7
Propane
C3H8
Propylene
C3H6
Benzene
C6H6
+ Cumene
C6H6.C3H7
Phenol
C6H5OH
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020 2025
Plant Condensate
(Natural Gasoline)
LPG
(Propane & Butane)
Ethane
U.S. Natural Gas Liquids
16
NGL Exports
Global markets will be instrumental in balancing NGL supplies
MMbbls/d
Source: EIA
+400%
U.S. Natural Gas Liquids
17
Mont
Belvieu
Source: Encana Fundamentals
East
Coast
West
Coast
LPG Import and Export Terminals
Export
Import
Idle
• The U.S. has become a net exporter of LPGs
(propane and butanes) over the past several years
• Export capacity is expected to grow significantly over
the next several years to serve European and Latin
America.
• The Panama Canal expansion now allows shorter
access of LPG cargoes to make their way to Asia
LPG Export Facilities & Expansions
Company Status
Online
Date
Capacity
(Mbbls/d)
Gulf Coast
Enterprise Existing Online 140
Targa Existing Online 40
Enterprise (Ph. 2) Existing Online 115
Targa (Ph. 1) Existing Online 60
Targa (Ph. 2) Expected Online 60
Enterprise (Ph. 3) Expected Online 50
SXL Mariner South Expected Online 200
Occidental Unlikely Online 150
Targa (Ph. 3) Unlikely Online 80
Enterprise (Ph. 4) Expected Online 206
Phillips 66 Freeport Expected Online 145
Moss Lake Unlikely 2018 150
East Coast
Marcus Hook Existing Online 17
Mariner East I Expected Online 65
Mariner East II Expected 2H2017 200
Total Existing/Expected: 1,168
Source: EIA
USA Natural Gas Liquids
Propane Exports
QUESTIONS?

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Ngl basics january 2017

  • 1. USA WOGA Liquids Review (NGL’s) Gregg Dighero, Director, NGL Marketing Encana Services Company Ltd. Denver| January 31| 2017
  • 2. NGLs, LPGs and Purity Products NGLs seem to exist in the twilight zone between crude, the basis of all petroleum products, and natural gas. NGLs are neither here nor there. They possess, to differing extents, characteristics of both oil and gas and have values and market drivers both similar to and distinctly separate from oil and gas. Source: RBN Energy What are NGL’s
  • 3. NGL Products and Physical Properties Product Structure Abbreviation BTU/gallon Vapor Pressure @ 100 degrees Ethane C2 66,340 800 Propane C3 91,563 188.62 Iso Butane IC4 99,630 72.644 Normal Butane NC4 103,740 51.567 Natural Gasoline C5+ ~110,000 15.567- 20.474
  • 4. Hydrocarbon Uses / NGL Sources 84% 16% Source: EIA 2018 Forecast
  • 5. NGL Barrel Product Ethane (C2) Propane (C3) Butanes (IC4 & NC4) Pentanes (C5+) Demand Type Petrochemicals Heating, Power Generation & Agriculture Refineries Exports Supply Demand Natural Gas Liquid Uses Source: Encana, EIA Propane Autogas
  • 6. Mt. Belvieu NGL Values $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 $110.00 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $/BARRELNYMEXCRUDE Mt.BelvieuProdcuts$/MMBtu NYMEX Crude NYMEX Natural Gas Ethane Propane Iso Butane Normal Butane Natural Gasoline
  • 7. U.S. Natural Gas Liquids 7 Production Forecast Source: EIA
  • 8. Natural Gas Liquids Major NGL Pipelines 8 Mont Belvieu Conway Sarnia Marcellus Western Canada Hobbs South LA Skelly Medford Midwest Primary Hub Secondary Hub Flow Direction Bakken West Rockies Existing Pipeline East Rockies Source: Encana, EV Maps Enterprise MAPL Enterprise ATEX ONEOK Sterling DCP Sand Hills Enterprise Eagle Ford Enterprise TEPPCO ONEOK Bakken Lateral Sunoco Mariner West Enterprise Front Range ONEOK Overland Sunoco Mariner East
  • 10. Source: Encana, Genscape 10% 2% 14% 1% 14% 48% 2% 8% Mont Belvieu Conway Sarnia U.S. Canada Share of Total Capacity % NGL Infrastructure Overview Fractionation Capacity by Region Edmonton
  • 12. Source: Encana, Genscape *Estimate based on company reports and assuming 1 barrel of ethane yields 100 lbs. ethylene, and includes announced plants that may not necessarily come online. 2% 7% 76%U.S. Canada 5% Total potential North American ethylene cracking capacity is about 117 billion pounds per year (equivalent to approximately 2,300* Mbbls/d of ethane) Ethylene Cracking Capacity By Region 10%
  • 13. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1990 1993 1996 1999 2002 2005 2008 2011 2014 Gas Oil Naphtha Butane Propane Ethane Low natural gas prices make ethane more competitive in the feedslate compared to its other oil based competitors. Percent USA Natural Gas Liquids Low Cost Ethane Preferred by Steam Crackers Source: Jacobs
  • 14. Petrochemical Products Things we use everyday……..
  • 15. Petrochemical Products Things we use everyday…….. Ethane C2H6 Ethylene C2H4 Polyethylene (C2H4)n Propane C3H8 Propylene C3H6 Polypropylene (C3H6)n Propane C3H8 Propylene C3H6 Benzene C6H6+ Cumene C6H6.C3H7 Propane C3H8 Propylene C3H6 Benzene C6H6 + Cumene C6H6.C3H7 Phenol C6H5OH
  • 16. 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020 2025 Plant Condensate (Natural Gasoline) LPG (Propane & Butane) Ethane U.S. Natural Gas Liquids 16 NGL Exports Global markets will be instrumental in balancing NGL supplies MMbbls/d Source: EIA +400%
  • 17. U.S. Natural Gas Liquids 17 Mont Belvieu Source: Encana Fundamentals East Coast West Coast LPG Import and Export Terminals Export Import Idle • The U.S. has become a net exporter of LPGs (propane and butanes) over the past several years • Export capacity is expected to grow significantly over the next several years to serve European and Latin America. • The Panama Canal expansion now allows shorter access of LPG cargoes to make their way to Asia LPG Export Facilities & Expansions Company Status Online Date Capacity (Mbbls/d) Gulf Coast Enterprise Existing Online 140 Targa Existing Online 40 Enterprise (Ph. 2) Existing Online 115 Targa (Ph. 1) Existing Online 60 Targa (Ph. 2) Expected Online 60 Enterprise (Ph. 3) Expected Online 50 SXL Mariner South Expected Online 200 Occidental Unlikely Online 150 Targa (Ph. 3) Unlikely Online 80 Enterprise (Ph. 4) Expected Online 206 Phillips 66 Freeport Expected Online 145 Moss Lake Unlikely 2018 150 East Coast Marcus Hook Existing Online 17 Mariner East I Expected Online 65 Mariner East II Expected 2H2017 200 Total Existing/Expected: 1,168
  • 18. Source: EIA USA Natural Gas Liquids Propane Exports