Growth in natural gas production and low product prices have ensured steady demand
New York, NY (PRWEB) May 24, 2014
Operators in the Natural Gas Liquid Processing industry process raw natural gas by separating out a group of hydrocarbons often called natural gas liquids (NGLs). The industry then supplies these NGLs (mostly ethane, propane, butane, isobutane, pentane plus and natural gasoline) to pipelines for further transportation or directly to wholesalers or end-users. Because NGLs are a naturally occurring component of natural gas, NGL production proportionally grows in line with natural gas extraction and processing.
According to IBISWorld Industry Analyst Antal Neville, “The shale gas boom of the past decade, whereby natural gas extractors developed methods of extracting natural gas trapped in shale rock formations, has caused NGL production to swell in the past five years.” Processors were flooded with continually expanding natural gas volumes and, as a result, continued to pump out more NGLs. As a result of booming NGL production, the industry performed well during the five years to 2014, with revenue growing an annualized 7.2% to $36.1 billion. In 2014, production growth and a slight price bump in NGLs are expected to contribute to revenue growth of 1.8%.
“A large proportion of this growth has come from exports,” says Neville. Historically, the industry is a much larger importer of NGL products, but the glut of natural gas in the United States as a result of the shale gas boom has meant that US production can satisfy a larger portion of domestic demand. Consequently, imports stagnated during the past five years, while exports have exponentially increased. The value of exported NGLs has grown at an annualized rate of 21.4% during the five years to 2014, with exports nearly doubling their share of revenue generated during the five-year period.
The Natural Gas Liquid Processing industry is expected to continue growing during the next five years, as natural gas extractors withdraw increasing quantities of natural gas. Export growth will remain elevated as the United States becomes an even-larger supplier of natural gas and NGLs. To keep up with higher processing volumes, companies will build more processing plants, causing the number of industry establishments to grow.
For more information, visit IBISWorld’s Natural Gas Liquid Processing in the US industry report page.
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IBISWorld industry Report Key Topics
The Natural Gas Liquid Processing industry separates out natural gas liquids (NGLs) from natural gas. Natural gas arrives at processing facilities in a gaseous state, and processors clean the natural gas and extract liquid hydrocarbons including ethane, propane, butane, isobutane and natural gasoline. These liquids have various uses including home heating fuel, inputs in plastic products and heating or blowing fuel in industrial production. The production of NGLs from oil refining is not included in this industry.
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