NGLs (Natural Gas Liquids) supply is expanding with increases in production from parts of the Marcellus Shale and the Eagle Ford Shale in South Texas. Expect the petrochemical industry to begin expanding and building new facilities like the proposed Shell ethylene plant in the Northeast. This is a win for mineral owners as more demand will increase the value of liquids by products produced in many oil wells and in many parts of the growing shale plays.
“Discussions about the industry’s growth are increasingly focused a thousand miles northeast, in the booming Marcellus Shale region.”
“The natural gas cocktail buried in that Appalachian rock is rich in ethane, the raw material used to create the ethylene that produces many types of plastics. While the Eagle Ford Shale in South Texas offers the same bounty, some industry analysts say the Northeast holds a strategic advantage in its proximity to manufacturers who mold plastic consumer goods.”
“The amount of ethane in a geography where ethylene derivatives are in strong demand lends itself to the integration of a new petrochemical industry there,’ said William Young, managing director of ChemSpeak, a consulting firm. ‘I’m glad to see some geographic diversification. There are advantages to being close to the markets that you’re serving.’ “
Read the full news release at Chron.com