Colorado energy industry could benefit from giant Texas ethane terminal
DBJ file
Adam Bedard of High Sierra Energy
The world's largest ethane export terminal is coming to the Houston Ship Channel, and it could improve the economics of drilling for oil and gas in Colorado.
Houston-based Enterprise Products Partners LP[5] (NYSE: EPD) announced Wednesday that it will construct a refrigerated ethane export facility in Houston to build off of the ongoing domestic shale boom.
Ethane is part of a family of compounds called natural gas liquids (NGLs), which include propane and butane. NGLs are produced along with natural gas and oil, and selling NGLs can boost the value of the commodities when the liquids are separated from the natural gas and oil and sold to the market.
But the nation's booming production of natural gas, oil and NGLs has resulted in an an overwhelming amount of ethane that's available — and not enough domestic demand to soak it up, according to industry experts.
That's where Enterprise's planned export terminal comes into play.
The terminal is the gateway to the international market which could buy U.S.-produced ethane — improving the financial aspects of oil and gas production.
"Any new market possibilities for ethane will be a benefit to Colorado oil and gas producers," said Adam Bedard[6], a senior director for strategic planning and market analysis at Denver's High Sierra Energy LP, which markets and transports crude oil and natural gas liquids as well as cleans frack water for reuse.
And there's a new pipeline, the Front Range Express, that was built specifically to move Colorado natural gas liquids to the Texas coast.
Enterprise is a partner in the Front Range pipeline, along with Denver's DCP Midstream and Anadarko Petroleum Corp. (NYSE: APC). The pipeline carries natural gas liquids 435 miles between Colorado and Texas. It started operations in the first quarter of 2014, according to Enterprise.
Cathy Proctor covers energy, the environment, transportation and construction for the Denver Business Journal and edits the weekly "Energy Inc." newsletter. Phone: 303-803-9233. Subscribe to the Energy Inc. newsletter[7]
References
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