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Permian Production Called ‘Indisputable Driver’ of U.S. NGL Growth
U.S. natural gas liquids (NGL) production, particularly from the Permian Basin, hit record levels near the end of last year, propelling hydrocarbon liquid totals to almost pre-pandemic numbers.
According to research by Rystad Energy, domestic NGL output soared to 5.84 million b/d in November, mostly from improving ethane recovery and Gulf Coast supplies rebounding following recovery from Hurricane Ida.
Total U.S. NGL output climbed above 17.3 million b/d in November, one of the highest points since early 2020. It was a 60,000 b/d sequential increase and the third monthly record in a row.
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NGL production from the Permian helped lead the surge, according to Rystad’s Artem Abramov, head of Shale Research. He called the Permian the “indisputable driver” of output during the record-setting spike.
The 10% growth in NGL output from the Permian, which extends across West Texas and southeastern New Mexico, through the second half of 2021 helped boost the gains from crude oil and condensate across the country during the same time period, Abramov said.
Before the pandemic, the Permian accounted for about 30% of U.S. oil output and 14% of domestic natural gas production in 2020, according to the Energy Information Administration data.
During November, NGL production from the Permian hit a record 3.3 million b/d, with the rest of the country making up only 2.5 million b/d of output. The Permian also led in oil production and growth of natural gas output during the same period, though Appalachia still led the total for natural gas at 34.903 Bcf/d.
The Permian also led in drawing down the backlog for drilled but uncompleted (DUC) wells from October to November with 105 units, coming down to 1,564 wells. The combined drawdown for all seven regions was 226 wells.
One of the nation’s top pipeline operators, Enterprise Products Partners LP, recently announced a $3.25 billion investment in the Permian Midland sub-basin with the acquisition of Navitas Midstream Partners LLC to add more NGLs to its system.
Rystad analysis showed other major U.S. onshore basins also are gaining traction toward pre-pandemic levels of all hydrocarbon liquids but were still underperforming by an average of 13% from 1Q2020. Output from the Eagle Ford and Bakken shale formations, and the Anadarko Basin and Niobrara formation, remained relatively flat in November month/month.
The natural gas-rich Appalachia Basin and the Haynesville Shale saw their NGL output decline four months in a row, slipping from a total production of 861,000 b/d in August to 856,000 b/d in November.
The increase in ethane recovery during the spike in NGL production accounted for most of the added output, and helped keep most of the major gas regions, excluding the Permian, from recording declining numbers.
Rystad researchers predicted the U.S. ethane fractionation spread would continue to increase through 1Q2022, thanks to growing ethane exports.
Heading into February, U.S. plays are expected to increase natural gas production as well, with growth at Haynesville getting the slight edge on the Permian at 127 MMcf/d compared to an increase of 122 MMcf/d. Only the Anadarko is projected to see declining gas output from January to February, dropping an estimated 23 MMcf/d.
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