Oneok sees timeline for ethane recovery
OREANDA-NEWS. February 25, 2016. US ethane demand is forecast to grow by 564,000 b/d by 2019, according to Oneok Partners.
The Tulsa-based company estimates roughly a third, or up to 180,000 b/d, of ethane production currently rejected in the US would otherwise move through its infrastructure in the midcontinent and down to the Gulf coast. Capturing those volumes could add up to \\$200mn in annual earnings, the company stated in its fourth quarter earnings presentation.
During the fourth quarter Oneok's gathered NGL volumes increased 44pc to 798,000 b/d versus the prior year, with fractionated volumes increasing 6pc to 552,000 b/d, supported by completed connections to eight natural gas processing plants last year.
Oneok said the surge in ethane demand will be felt first in regions closest to new crackers on the Gulf coast, namely the Permian basin, which is currently rejecting the least amount of the feedstock, and from the Eagle Ford shale in south Texas. Ethane demand will increase by 93,000 b/d in early 2017 as the first new ethylene cracker comes online.
Despite lower commodity prices, Oneok is forecasting midcontinent NGL gathering will grow with the addition of a third-party processing plant in this year.