U.S. natural gas liquids (NGL) production is expected to grow by around 15% year/year — to average just under 4.3 million b/d — in 2018 and shows no signs of slowing as the market seeks to rebalance itself and refill inventories following “impressive declines” in recent months, Raymond James & Associates Inc. analysts said.

To achieve this pace of growth, NGLs production first will piggyback off production efficiencies gained in crude oil and natural gas. This will lead to another 8% jump to just under 4.7 million b/d in 2019. U.S. NGL production could reach above 5.0 million b/d by 2020, and easing infrastructure constraints should allow U.S. NGL supply growth to continue relatively unabated. In fact, analysts project that NGLs will represent 25% of the 1 million b/d or more of U.S. total liquids annual supply growth over the upcoming five-year period.

Indeed, several midstream companies are working to ease infrastructure constraints along the U.S. Gulf Coast in particular. Enterprise Products Partners LP (EPP) is set to bring its Midland-to-Sealy crude oil pipeline in West Texas into full service by early second quarter after completing pump stations and storage facilities along the pipeline. The 405,000 b/d Midland-Sealy pipeline is part of EPP’s larger Midland-ECHO crude oil pipeline system in the Permian Basin.

In addition, the company plans to bring online two natural gas processing plants at its Orla complex in the Permian’s Delaware sub-basin during the second and third quarters, with work continuing on a third plant to be in service in 2019.

Also in 2019, Targa Resources Corp. is planning to bring into service two 250 MMcf/d cryogenic natural gas processing plants as well as a 100,000 b/d fractionation train in Mont Belvieu, TX. The first processing plant is expected to begin operations in 1Q2019 and the second in 3Q2019. The fractionation train, which would cost an estimated $350 million, is also expected to begin operations in 1Q2019.

The unprecedented growth in NGLs won’t flood the market and depress pricing, Raymond James analysts said. Instead, the market needs considerable growth to achieve balance. Even as domestic demand for crude oil and refined products is expected to be more tempered in the coming year, a continued export pull (largely from Latin America) is expected to meaningfully tighten the domestic refined product landscape.

As such, analysts project overall global demand to grow by 1.5 million b/d in 2018 and by another 1.5 million b/d in 2019. This would result in a “more or less balanced liquids market in 2018 and a refilling of inventories back to normalized levels.” As of March 28, commercial U.S. crude oil inventories stood at 429.9 MMBbls, or 104 MMBbls below the same time last year, according to the U.S. Department of Energy.

At the forefront of growing NGL production will be ethane, which is expected to “finally get its time in the limelight” in 2018 and 2019, as both U.S. and international petrochemical companies have spent billions on new world-scale ethylene crackers along the U.S. Gulf Coast.

Most ethane (at around 75% on average in 2017) is being produced near the Gulf Coast, and the proximity to Mont Belvieu, home of the largest global NGL fractionation hub, has led to 20% year/year production growth over the last three months to its highest levels of all time, Raymond James analysts said.

With ethane production continuing to soar, some 180,000 b/d of steam cracking capacity was added in 2017, and Raymond James analysts expect another 210,000 b/d to come online in 2018 and another 250,000 b/d in 2019.

One of the projects slated for this year is ExxonMobil Corp.’s 1.5 million ton/year ethane cracker in Baytown, southeast of Houston. The cracker, which was reported to be mechanically completein February, is on target to start up before midyear. It’s part of ExxonMobil’s multi-billion dollar chemical expansion on the Gulf Coast, which would provide ethylene feedstock for performance polyethylene lines at Mont Belvieu.

Meanwhile, Raymond James’ ethane production forecast calls for recovered ethane averaging 1.7 million b/d in 2018, reflecting a 19% year/year growth rate. In 2019, analysts project another 10% year/year growth to 1.9 million b/d and by 2020, recoverable ethane production could near 2.5 million b/d.

Despite most of the ethane being produced on the Gulf Coast, there is also a growing market in the Marcellus and Utica shale plays. After pulling the trigger on the project in 2016, major equipment and structures will be erected throughout the year for Shell Chemical Appalachia LLC’s multi-billion dollar ethane cracker plant in western Pennsylvania. The ethane cracker is just one part of a much larger complex that would also include polyethylene units to help make the pellets Shell plans to sell for plastics conversion, a cooling tower, a control building, offices and transloading facilities, among other things.

Meanwhile, propane-plus production (which includes propane, butane, iso-butane and natural gasoline) are also expected to track higher as it tends to run more closely in line with general oil and gas drilling and completion activity trends, Raymond James said. Just as crude and gas production growth accelerated at the end of the year, December 2017 Energy Information Administration data depicted very strong 13% year/year growth in propane-plus production.

With the crude-to-gas ratio expanding in 2H17 and into 1Q18, “it makes sense that producers directed activity toward liquids-rich acreage (both wet gas plays and crude oil with high associated gas content),” Raymond James analysts said.

As such, they “broadly expect” propane-plus production to mirror crude oil and associated gas production over the next two years. Raymond James forecasts propane-plus production averaging 2.6 million b/d in 2018, reflecting 13% year/year growth. In 2019, it sees another 6% year/year growth to just under 2.8 million b/d, compared to 10% year/year and 4% year/year growth rates in wet gas.