BENTEK: More than 120 Mb/d of ethane is being rejected in U.S. Rockies and Midcontinent

Lowest U.S. ethane prices in years are leading to negative fractionation price spreads and unprecedented volumes of ethane rejection
July 3, 2012 - PRLog -- EVERGREEN, CO (July 3, 2012) – BENTEK Energy, a leading energy markets information and analytics company, reports in its new NGL Supply Report that ethane prices at key natural gas liquids (NGL) market hubs are dropping to the lowest levels in years.  In Mt. Belvieu, TX, ethane prices have fallen 65% since January 2012, averaging $0.29 per gallon for the week ending June 29, 2012.  Ethane prices in Conway, KS, averaged $.05 per gallon for the week ending June 29, 2012, the lowest price in more than seven years.  As a result of these low prices and the large transportation costs of moving ethane to the U.S. Gulf Coast, more than 123 Mb/d of ethane is being rejected in the Midcontinent and Rockies regions, including 73 Mb/d in the Rockies.  However, the amount of ethane being rejected is having only a minor impact on natural gas being added into the supply stream.  Economics for ethane production in areas closer to Mt. Belvieu, including the Permian, Eagle Ford and Oklahoma/Texas portions of the Anadarko, remain positive at this point.

“The current conditions of the U.S. ethane market are unusual and have serious implications for the U.S. NGL market,” noted Kristen Holmquist, BENTEK manager, NGL Analysis.  “Ethane prices are so low that it is more economical to leave the ethane in the gas and burn it as fuel than to recover and sell the ethane as a purity product.  BENTEK expects these conditions to continue through the summer as the key market hubs including Conway and Mt. Belvieu stay oversupplied with both ethane and propane.”

According to the NGL Supply Report, the Rockies-to-Conway ethane fractionation spread dipped as low as ($3.97)/MMBtu on June 25, which is $5.34/MMBtu below the five-year average.  BENTEK predicts ethane fractionation spreads from the Rockies and Midcontinent to Conway will remain negative through this summer, which should alleviate some of the ethane oversupply in the Conway market but will not be enough for prices to recover.  

BENTEK’s new NGL Supply Report provides a weekly assessment of U.S. and Canadian raw-mix NGL production, offering the most up-to-date review of raw-mix supply in the marketplace today.  This revolutionary new report bridges the three-month production data gap between Energy Information Administration (EIA) data and current activity, tying natural gas production, ethane rejection and PADD-to-PADD flows to NGL production without a time lag.  

For more information about BENTEK’s NGL Supply Report or BENTEK’s full line of NGL Products, go to or call 1-888-251-1264.

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