Planned Marcellus/Utica NGL Fractionator Capacity May Freeze After First-Quarter 2015

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The wet and dry gas deposits in the Marcellus and Utica shales have been the buzz of the Oil & Gas Industry recently, with analysts and traders focusing intently on the region's natural gas and natural gas liquids (NGL) production growth. However, looking at project data, activity in the Northeast seems to grind to a halt after March 2015.

According to Industrial Info's data, NGL fractionation capacity increased by 190,000 barrels per day (BBL/d) in the first half of 2014. Of that total, 90,000 BBL/d of capacity was added in West Virginia and Ohio, with the rest in Louisiana. In the second half of the year, more than 230,000 BBL/d of capacity is expected to come online; however, all of it is in Texas and Louisiana.

For the first half of 2015, Industrial Info's data show only two projects that increase the Marcellus/Utica region's NGL fractionation capacity. The first is MarkWest Energy Partners' (NYSE:MWE) (Denver, Colorado) 60,000-BBL/d Hopedale NGL fractionator expansion in Jewett, Ohio.

View Project Report - 300168542

The second is the 80,000-BBL/d Natrium NGL fractionator expansion at New Martinsville, West Virginia. The fractionator is owned by Blue Racer Midstream LLC, a joint venture by Dominion Resources (NYSE:D) (Richmond, Virginia) and Caiman Energy II LLC (Dallas, Texas).

View Project Report - 300154274

After Natrium's expansion, Industrial Info's data shows all NGL fractionation capacity additions taking place in other shale plays, primarily in Texas and Louisiana.

The state of the market is such that the majority of NGL demand is from chemical processors. The majority of these processing companies are located in the Gulf Coast. Unlike dry natural gas, which needs no further processing past the initial processing facilities close to the wellhead, NGL must be separated into its component hydrocarbons in order to be used. Because of this, NGL is shipped via pipeline to its target market and then fractionated close by. The lack of additional fractionation capacity in the northeast should be expected, due to the lower demand for chemical processing feedstock in the region.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.