Midstream companies are focused on natural gas liquid (NGL) growth opportunities.
ONEOK (OKE) and MPLX LP (MPLX) are the latest names to tap growth opportunities around NGLs. The midstream companies will team up to construct a new large-scale liquefied petroleum gas (LPG) export terminal in Texas City, Texas. Additionally, ONEOK and MPLX will build a new pipeline from ONEOK’s Mont Belvieu, Texas, storage facility to the new terminal.
The capacity of the new export terminal will be 400,000 barrels per day (bpd). The loading throughput is expected to be primarily low ethane propane (LEP) and normal butane (NC4). ONEOK and MPLX will each contractually reserve 200,000 bpd for their respective customers, according to a statement.
See more: “Midstream Investing in NGLs Amid Record Exports”
The production of NGLs in the U.S. has grown alongside increasing oil and natural gas production. Advances in shale gas extraction have boosted NGL production in the U.S.
NGLs are separated from the natural gas stream at gas processing facilities, before being further processed into purity products through fractionation. Fractionation plants process NGLs into individual components such as propane, butane, ethane, isobutane, and natural gasoline. LPGs include propane, butane, and isobutane.
See more: “Propane Helps Fuel Midstream/MLP Growth”
Propane and butane are relatively familiar NGLs due to their use in consumer cooking applications. However, growing global demand for plastics is also driving the need for more propane.
