New daily price assessments illuminating shale gas value chain

Finance Spreadsheet
Source: DollarPhotoClub

Platts, the global energy information provider and division of McGraw Hill Financial, has introduced the first in a series of daily price assessments designed to help companies – from producers to end users such as petrochemicals manufacturers – to better understand price differentials and profitability factors in the U.S. shale natural gas and natural gas liquids (NGL) markets.

“Our new Shale Value Chain series seeks to quantify the close relationship between natural gas and NGL prices, put it into context and provide that value to market players striving to make business and trading decisions around that relationship,” said Samantha Santa Maria, Platts managing editor of North American natural gas. “Our new assessments, for example, enable gas producers to optimize margins, originators to determine which supply basin provides the most competitively priced raw products, and end-users to compare competing supply and fractionation sources.”

Platts’ Shale Value Chain consists initially of six daily price assessments, which were priced as noted at market close on May 19, 2014:

  • Gulf Coast Ethane Fractionation Spread: The price differential between Mont Belvieu ethane and Platts’ benchmark Houston Ship Channel gas price. (-0.993 cents/gallon)
  • Gulf Coast E/P Mix Fractionation Spread: The price differential between Mont Belvieu ethane/propane mix and the benchmark Houston Ship Channel gas price. (0.007 cents/gallon)
  • E/P Mix Midcontinent to Rockies Fractionation Spread: The price differential between Conway ethane/propane and Platts’ Colorado Interstate gas price in the Rockies. (-0.481 cents/gallon)
  • E/P Mix Midcontinent Fractionation Spread: The price differential between Conway ethane/propane and Platts’ benchmark Natural Gas Pipeline Co. of America, Midcontinent zone, gas price. (-1.345 cents/gallon)
  • National Raw NGL Basket Price: The Raw NGL basket price is a national valuation of the total components of the NGL barrel. (90.680 cents/gallon)
  • National Composite Fractionation Spread: The price differential between the National Raw NGL Basket price and the benchmark Houston Ship Channel gas price. (61.187 cents/gallon)

“Even while tightening today, the fractionation spreads clearly show that overall NGL recovery economics remain strong,” said Patrick Badgley, Platts associate editor of natural gas. “It is clear why producers continue to show interest in drilling in plays with a significant NGL presence.”

All six assessments are available as Platts’ new Shale Value Chain market data package, which contains historical data going back to January 1, 2011. They are also now available on Platts Gas Alert, a real time service, and in two Platts’ publications, Gas Daily and Oilgram Price Report.

By year-end, Platts expects to launch six additional Shale Value Chain assessments related to production from the Eagle Ford, Marcellus and Bakken shale plays.

To learn more about Platts’ new Shale Value Chain assessments and their market relevance, tune into a Platts.com podcast starting on May 21.

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