RBN Looks At NGLs In Texas -- December 18, 2014

Active rigs:

	12/18/2014	12/18/2013	12/18/2012	12/18/2011	12/18/2010
Active Rigs	180	188	186	201	166

RBN Energy:  Enterprise Products Enterprise -- NGLs in the Permian and the Eagle Ford.

The need for natural gas processing capacity, new or expanded NGL pipelines and other infrastructure in the Permian Basin and the Eagle Ford has spurred a competitive frenzy among midstream companies. NGL production in the two prolific regions has more than doubled in the past four years; it now tops 1.1 MMb/d. Under RBN’s Growth Scenario that assumes output will continue to increase over the near term despite the recent price slump – production in the two regions would rise another 500 Mb/d by 2019. Given that infrastructure in parts of the Permian and Eagle Ford already is struggling to keep pace, it is quite possible that midstream companies will continue to develop new projects.  Today, we begin our company-by-company look at existing infrastructure and planned projects.

Much as McDonald’s and Burger King enjoy the high profitability of their soft drinks sales and fancier restaurants love the big bucks they make selling wine and booze, oil and natural gas producers have come to appreciate the bottom line-boosting value of the natural gas liquids that are produced alongside oil and gas. That is especially so now following the oil price crash as producers look closely at their drilling budgets for 2015 and seek out higher returns in the sweet spots of shale basins. So even though the value of NGLs has sagged as their prices have been dragged down with oil, they can help make a crucial difference in returns for new drilling projects. As we said in Episode 1 of this series, the Permian Basin in West Texas and southeastern New Mexico and the Eagle Ford in South Texas are among the most prolific hydrocarbon plays in the U.S. In this episode, we begin a survey of existing and planned NGL-related infrastructure in both regions, starting with the largest players. In each case, we will first consider each company’s Permian assets and projects, and then look at their assets and projects in the Eagle Ford – starting today with Enterprise Products Partners.