Midstream companies to boost fractionation capacity

Amid the continued rise in U.S. natural gas production and the accompanying natural gas liquids (NGLs) is a need by the industry to add enough fractionation capacity to accommodate the greater volumes of unfractionated liquids, also known as y-grade.

Midstream operators are readying assets for the additional growth in fractionation capacity to separate the liquids into their respective purity products, such as propane, butane and ethane, as Amy Strahan of Argus Media explained during a webinar focused on infrastructure investments in the U.S.

The U.S. Energy Information Administration expects NGL production from gas processing to increase to over 6 million barrels per day (bpd) by the end of 2024, with volumes from the Permian Basin in west Texas driving much of the growth, says Strahan, editor of Argus NGL Americas.

Companies such as Energy Transfer, Enterprise, Oneok, Phillips 66 and Targa are planning new facilities in the Mont Belvieu area between the end of 2023 and 2025. The additional, incremental fractionation capacity should push capacity to 8 million bpd by the end of 2027, she says.

Strahan says it’s unclear whether the additional liquids will find ready demand. The greater supply of purity NGLs will only lengthen the oversupplied market in the U.S., make more propane and butane available for export and push prices lower in the international market, she adds.

Argus is a provider of market intelligence to the global energy and commodity markets.

PADD 3 update

Enterprise Products Partners provided an update on major growth capital projects scheduled for completion this year. They include the company’s second propane dehydrogenation facility during the second quarter; the NGL fractionator 12 in Chambers County, Texas, and the Poseidon natural gas processing plant in the Midland Basin during the third quarter; and the Mentone II natural gas processing plant in the Delaware Basin, as well as the first phase of the Texas Western Products system, in the fourth quarter.

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