Energy Transfer LP (ET) on Tuesday said a 400,000 b/d expansion of the Lone Star Express Pipeline has been completed, boosting eastbound natural gas liquids deliveries from the Permian Basin.
The 352-mile, 24-inch diameter pipeline, completed ahead of schedule and on budget, originates in Winkler County, TX, and connects to the existing Lone Star Express 30-inch diameter pipeline at the Morgan Junction in Bosque County, south of Fort Worth, TX.
The Lone Star system goes on to connect to ET’s Mont Belvieu facility on the Gulf Coast, where the company brought online the seventh fractionator earlier this year. Mont Belvieu now has a total fractionation capacity of more than 900,000 b/d.
The Lone Star expansion was a major component of ET’s 2020 capital program, which was reduced by at least $400 million amid the oil market downturn and Covid-19. Other projects included in the capital spending are Mariner East, the Orbit NGL export facility and other liquefied petroleum gas export projects in Nederland, TX.
Unlike natural gas and crude oil, NGL production has been on a tear since the second quarter as U.S. petrochemical expansions began and as economic activity more broadly resumed amid the pandemic.
The Energy Information Administration said ethane, in particular, is forecast to exceed 2 million b/d by the fourth quarter. That would mark a 9% increase from the start of 2020. The agency expects ethane production to continue to advance at a similar pace in 2021 and approach 2.27 million b/d by year-end, 18% higher than first quarter levels this year.In addition to ET, other midstreamers noted the strong demand for ethane during second quarter earnings. CFO Sean O’Brienfor Denver-based DCP Midstream LP noted that during downturns, “there are always some favorable” commodities that emerge, and ethane appears to be one of them amid the fallout of the pandemic. Tulsa-based Oneok Inc. also reported substantial increases in NGLs, notably including ethane.
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