{"id":257,"date":"2012-02-15T21:33:57","date_gmt":"2012-02-16T03:33:57","guid":{"rendered":"https:\/\/allenergyconsulting.com\/blog\/?p=257"},"modified":"2012-02-22T23:37:51","modified_gmt":"2012-02-23T05:37:51","slug":"aeo-2012-natural-gas-liquids-ngl-condensates-glut-of-supply","status":"publish","type":"post","link":"https:\/\/allenergyconsulting.com\/blog\/2012\/02\/15\/aeo-2012-natural-gas-liquids-ngl-condensates-glut-of-supply\/","title":{"rendered":"AEO 2012 Natural Gas Liquids (NGL) & Condensates: Glut of Supply"},"content":{"rendered":"

This blog is adding on top of our <\/span>previous blog<\/span><\/a>, \u00a0discussing the latest release of the Annual Energy Outlook 2012 (AEO 2012) by the Energy Information Agency (EIA).\u00a0 Shale gas revolution encompasses not only natural gas, but a glut of liquids from condensates to natural gas liquids (NGL).\u00a0 Shale gas is not only impacting the natural gas markets, but has and will impact the chemicals and refining markets.\u00a0\u00a0 The AEO 2012 shows an increase of only ~600 kbd of NGL from 2010 to 2020.\u00a0\u00a0 This is a very conservative number.\u00a0 In terms of condensate, the AEO does not break it out, but crude oil and condensates grow only 1.3 mmbpd.\u00a0 In the write up, much of the growth is a function of tight oil not condensates.\u00a0 Once again, I believe this to be almost too conservative. <\/span><\/span><\/p>\n

In order to justify this stance, one can examine the many <\/span>recent assessments done by the USGS<\/span><\/a>.\u00a0 Adding up just the Eagle Ford, Marcellus, and Permian assessments; the mean NGL technically recoverable volumes total over 6 billion barrels.\u00a0 According to USGS, they have places the condensates into the NGL category.\u00a0 Liquids are clearly driving the shale gas production.\u00a0 Gas is almost becoming a loss leader.\u00a0\u00a0 As I discussed in my <\/span>previous blog<\/span><\/a>, there are multiple projects focused on expanding the infrastructure in order to monetize the NGLs coming from these shale plays.\u00a0\u00a0 One of my estimates of NGL and condensate additional volumes for 2020 compared to 2010 would be an increase of 2 mmbpd.<\/span><\/span><\/p>\n

With this much volume of light feedstock, the US refining markets will see a drastic change.\u00a0 A historical given was the crude slate was going to get heavier requiring more and more conversion capacity.\u00a0\u00a0 With the amount of NGL and condensates, the US market could potentially see a pause to this belief is inevitable if not a reversal from this trend.\u00a0 Much of the refining capacity has been designed to process heavy crudes not light feedstock.\u00a0\u00a0 Refining margins from a highly complex refinery will not be pretty.\u00a0 Perhaps many have come to this thinking with all the refining closures and selling announcements.\u00a0 Simple condensate splitters economics would not bode well either, as a surplus in naphtha will likely occur.\u00a0\u00a0 \u00a0\u00a0NGL and condensates will need to find a home.\u00a0\u00a0 A re-configuration of existing refineries will come at significant losses to the current owners.\u00a0 There will be winners.\u00a0 Those who have access to capital and can think outside the box will win.\u00a0 The consumers will also be a big beneficiary of refining margin compression.<\/span><\/span><\/p>\n

We positively and evocatively challenge the current thinking involving any aspect of energy use. We look for projects that offer meaningful, transformative, with impactful outcome to the marketplace or society.<\/span><\/p>\n

Independent analysis and opinions without a bias is what we offer to our clients. Please consider and contact All Energy Consulting when you need consulting services.<\/span><\/p>\n

Your Energy Consultant,<\/span><\/p>\n

\u00a0<\/span><\/p>\n

David K. Bellman<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This blog is adding on top of our previous blog, \u00a0discussing the latest release of the Annual Energy Outlook 2012 (AEO 2012) by the Energy Information Agency (EIA).\u00a0 Shale gas revolution encompasses not only natural gas, but a glut of liquids from condensates to natural gas liquids (NGL).\u00a0 Shale gas is not only impacting the […]<\/p>\n","protected":false},"author":1,"featured_media":14,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,3,4,26],"tags":[89,48,96,88,92,47,93,14,87,94,90,91,95],"class_list":["post-257","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","category-natural-gas","category-ngls","category-oil-petroleum-products","tag-aeo","tag-aeo-2012","tag-condensate","tag-condensates","tag-eagle-ford","tag-eia","tag-marcellus","tag-natural-gas-2","tag-ngl","tag-permian","tag-refining","tag-refining-margins","tag-shale"],"_links":{"self":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/257","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/comments?post=257"}],"version-history":[{"count":8,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/257\/revisions"}],"predecessor-version":[{"id":260,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/257\/revisions\/260"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media\/14"}],"wp:attachment":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media?parent=257"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/categories?post=257"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/tags?post=257"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}