Midstream Investing in NGLs Amid Record Exports


  • Production of natural gas liquids (NGLs) has grown over the past decade, and strong international demand has led to significant growth in exports.
  • Exports of NGLs grew by 274% over the past 10 years, with demand driven largely by the plastics manufacturing industry.
  • Midstream companies continue to invest in NGL infrastructure from processing capacity to pipelines.

While propane and butane are relatively familiar natural gas liquids (NGLs) given their use in consumer cooking applications, much of the global demand for NGLs actually stems from plastics manufacturing. As demand for plastics around the world has grown, so has the demand for NGLs as feedstocks. Given strong international demand, exports of NGLs have been steadily growing, and midstream companies are investing across the NGL value chain. Today’s note looks at growing NGL exports and how the midstream space is investing in NGL-focused infrastructure.

US NGL Exports: A Decade of Growth

Natural gas liquids (NGLs) are produced from wells alongside oil and natural gas. Midstream companies with gathering and processing businesses collect the raw natural gas from well heads. They then separate NGLs and natural gas at gas processing plants. The NGLs then get separated into their respective components (propane, ethane, butane, isobutane, and natural gasoline) at fractionation facilities. And those are also typically owned by midstream companies.

Demand for NGLs, particularly propane and ethane, has been climbing for the past 10 years, largely driven by plastics manufacturing. Midstream companies have been building incremental fractionation and export capacity to meet growing demand (read more). For propane, exports make up most of the demand for US production, which has been rising steadily (read more). There has also been solid growth in ethane exports (read more).