Natural Gas Liquids (Ngls)In North America: an Update
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Study No. 139 May 2014 NATURAL GAS LIQUIDS (NGLS) IN CANADIAN ENERGY NORTH AMERICA: AN UPDATE RESEARCH INSTITUTE PART II – MIDSTREAM AND DOWNSTREAM INFRASTRUCTURE Canadian Energy Research Institute | Relevant • Independent • Objective NATURAL GAS LIQUIDS (NGLs) IN NORTH AMERICA: AN UPDATE PART II – MIDSTREAM AND DOWNSTREAM INFRASTRUCTURE Natural Gas Liquids (NGLs) in North America: An Update Part II – Midstream and Downstream Infrastructure Copyright © Canadian Energy Research Institute, 2014 Sections of this study may be reproduced in magazines and newspapers with acknowledgement to the Canadian Energy Research Institute ISBN 1-927037-20-1 Author: Carlos A. Murillo Acknowledgements: The author wishes to acknowledge the support and contributions of Peter Howard and Megan Murphy in the production, reviewing, and editing of this report. Julie Dalzell and Anthony Mersich provided most of the research and material on the United States’ sections. Staff from RBAC Inc. (Sherman Oaks, California) and RBN Energy LLC (Houston, Texas) provided feedback and data for cross-referencing and due diligence purposes on the United States. Additionally, industry peer-reviewers from across the integrated oil and gas, midstream, and consulting segments provided valuable feedback and suggestions that helped make these reports more relevant, independent, and objective in accordance with CERI’s mandate. CANADIAN ENERGY RESEARCH INSTITUTE 150, 3512 – 33 Street NW Calgary, Alberta T2L 2A6 Canada www.ceri.ca May 2014 Printed in Canada Front cover photo’s courtesy of http://www.huskyenergy.com/news/photolibrary/westerncanadaconventional.asp; Pembina Pipeline Corporation, Corporate Update January 2014; and http://www.lyondellbasell.com/News/PhotosforMediaUse/ Natural Gas Liquids (NGLs) in North America: An Update iii Part II – Midstream and Downstream Infrastructure Table of Contents LIST OF FIGURES ............................................................................................................. v LIST OF TABLES ............................................................................................................... vii EXECUTIVE SUMMARY .................................................................................................... 1 NGL INFRASTRUCTURE AND NGL END-USERS IN CANADA ............................................... 3 Natural Gas Field Processing Plants and Straddle Plants .................................................. 3 Fractionators ...................................................................................................................... 11 Pipelines and Other Transportation Infrastructure ........................................................... 13 Natural Gas Transmission and Distribution Systems ................................................... 13 Liquids Transportation System .................................................................................... 15 Rail Transportation Infrastructure ............................................................................... 21 Refineries, Upgraders, and Off-gas Processing Plants ....................................................... 23 Petrochemical Facilities: Steam Crackers, Aromatic Plants, Derivative Plants, and Others ................................................................................................................... 24 NGL INFRASTRUCTURE AND NGL END-USERS IN THE UNITED STATES .............................. 35 Natural Gas Processing Plants ........................................................................................... 35 Fractionators ...................................................................................................................... 38 Pipelines and Other Transportation Infrastructure ........................................................... 42 Liquids Transport Infrastructure .................................................................................. 42 Petrochemical Facilities ..................................................................................................... 45 ANALYSIS: INFRASTRUCTURE INVESTMENTS IN CANADA TO CONNECT NGL SUPPLY AND DEMAND ....................................................................................... 49 Major Midstream Players in Western Canada ................................................................... 49 Trends in Midstream Infrastructure Investments ............................................................. 52 Downstream Investments Associated with Increasing NGL Supplies in Canada ............... 59 APPENDIX I – CANADIAN NGL INFRASTRUCTURE ............................................................ 63 APPENDIX II – UNITED STATES NGL INFRASTRUCTURE ..................................................... 64 May 2014 iv Canadian Energy Research Institute May 2014 Natural Gas Liquids (NGLs) in North America: An Update v Part II – Midstream and Downstream Infrastructure List of Figures 1.1 Illustrative Canadian NGL Supply and Demand Flowchart .......................................... 4 1.2 Gas Processing and NGL Extraction Process ................................................................ 5 1.3 Gas Gathering, Processing, and Transmission System in NE BC, Gas Distribution System, and NGL Gathering System ........................................................ 6 1.4 Western Canada Natural Gas Processing and Transportation System ........................ 7 1.5 Map of Deep-cut Field Gas Processing Plants in the WCSB ......................................... 10 1.6 Canadian Natural Gas Transportation Infrastructure and Distribution Companies/Areas ......................................................................................................... 13 1.7 Canadian Crude Oil Pipeline System ............................................................................ 16 1.8 Canadian NGL Pipeline Infrastructure Capacities, and Main NGL Storage Facilities and Capacities ............................................................................................... 17 1.9 NGLs Transported to Fort Saskatchewan and Pipeline Capacity and Peace LVP System Throughput Estimates and Capacity .............................................. 18 1.10 North America’s Rail Transportation Network ............................................................ 22 1.11 Petrochemical Feedstock and End-use Flowchart ....................................................... 25 1.12 Moving Up the Value Chain from Hydrocarbons to End-use Products ....................... 25 1.13 Canadian Petrochemical Production and 2012 % Share of Total ................................ 31 1.14 Total Petrochemical Production in Canada by Source, and Estimated Ethylene Production from Steam Crackers by Feedstock ........................................... 33 2.1 Gas Processing Capacity in the United States Lower 48 .............................................. 35 2.2 US Lower 48 Gas Processing Capacity Additions by Region, 2011-2016 ..................... 37 2.3 US Lower 48 Gas Processing Capacity by Region, 2004-2016 ..................................... 38 2.4 Marcellus/Utica Gas Processing Capacity, 2004-2016 ................................................ 38 2.5 US Fractionation Capacity by Region and by Operator, 2012 ..................................... 39 2.6 Fractionation Capacity Additions by Area and Operator, 2011-2016 ......................... 40 2.7 US Fractionation Capacity by Region ........................................................................... 41 2.8 Marcellus/Utica Total Fractionation and De-ethanization Capacity ........................... 41 2.9 Major NGL Pipeline Corridors and Fractionation Centers in the United States .......... 43 3.1 Top Natural Gas/NGL Players in AB: Natural Gas Production and Field Processing, NGLs Extraction ......................................................................................... 50 3.2 Top Natural Gas Processing/NGL Extraction Players in BC .......................................... 51 3.3 Oil and Gas Investment Risk and Return Continuum .................................................. 53 3.4 NGL Pipeline Capacity and Fractionation Capacity in the Fort Saskatchewan Area, 2002-2018 ........................................................................................................... 58 May 2014 vi Canadian Energy Research Institute May 2014 Natural Gas Liquids (NGLs) in North America: An Update vii Part II – Midstream and Downstream Infrastructure List of Tables 1.1 Information on Deep-cut Field Gas Processing Plants in the WCSB ............................ 9 1.2 WCSB Straddle Plant Information, AB Straddle Plants Processing Volumes and Utilization .............................................................................................................. 11 1.3 Total Canadian Fractionation Capacity and Fort Saskatchewan Fractionators NGL Production and Capacity Utilization/Stand-alone Fractionation Capacity Information .................................................................................................................. 12 1.4 Large Canadian Midstream Companies NGL Rail Handling Facilities and Rail Car Fleet ................................................................................................................ 23 1.5 Canadian Refining and Upgrading Capacity and Off-gas Processing Plants ................ 24 1.6 Canadian Petrochemical Plant Information ................................................................. 27 1.7 Major Petrochemical Clusters in Canada,