East Daley: Limited Takeaway Capacity to Plague Northeast Natural Gas Liquids Market
April 16 2018 - 9:39AM
Business Wire
New analysis indicates that as takeaway constraints for natural
gas out of the Marcellus and Utica producing areas begin to lift,
wet natural gas production growth will be limited by a new set of
constraints caused by limited natural gas liquids (NGL) takeaway
capacity in 2018
East Daley Capital Advisors, Inc., an energy information and
insights provider that is redefining how markets view risk for
midstream and exploration and production (E&P) companies,
reports that as the much-needed additional NGL takeaway capacity is
delayed in the Northeast, midstream NGL players will become
increasingly constrained which will create a ceiling for wet gas
production and put downward pressure on earnings for the operators
in the region.
“The NGL market in the Northeast continues to be a logistical
quagmire for producers, midstream operators and marketers,” said
Justin Carlson, VP and Managing Director, Research at East Daley
Capital. “The impact of the constraints in that region will result
in low propane prices this summer, even for Northeast standards.
One reason for this is Energy Transfer Partner’s ME-1 pipeline has
been shut down for a month removing vital C3 takeaway from the
Northeast as spring quickly approaches.”
The analysis indicates that if ME-1 and ME-2 are further
delayed, producers such as Antero Resources, Range Resources and
Southwestern can expect lower earnings from lower realized liquids
prices and stalled wet production growth. Wet producers unable to
reach production guidance will drive earnings lower for midstream
providers such as MPLX, Antero Midstream, Williams and CNX
Midstream.
“NGL takeaway challenges from the Northeast are amplified with
scarce liquids storage within the basin,” said Carlson. “The
geology in Pennsylvania and West Virginia does not allow for
significant amounts of large underground storage, leaving limited
room for emergency storage if problems with takeaway arise. Couple
this with the rapid growth in wet gas production, both current and
expected, and some very real issues begin to present
themselves.”
East Daley’s largest asset database of U.S. energy
infrastructure and patent-pending production allocation model,
combined with in-depth analysis, brings greater transparency to the
energy and commodity financial market by providing investors and
market participants with deeper, more accurate data to inform their
investment and strategy decisions.
Contact East Daley for a copy of its official response to
these changes, titled: FERC Rules On Tax Changes.
About East Daley Capital Advisors, Inc.
East Daley Capital is an energy information and insights
provider that is redefining how markets view risk for midstream and
exploration and production (E&P) companies. In addition to
using top-level financial data to predict a company’s performance,
East Daley delivers asset and commodity analysis that provides
comprehensive, fact-based intelligence. Supported by a team of
unbiased, experienced financial and commodity analysts, East Daley
provides its clients unparalleled insight into how midstream and
E&P companies operate and generate cash flow, in addition to
commodity forecasting. East Daley uses publicly available
fundamental data and intersects that data with a company’s reported
financials to asset-level adjusted-EBITDA and distributable cash
flow (DCF). The result allows for more informed portfolio
decisions. Founded in 2014, the company is based in Centennial,
Colorado. For more information visit http://www.eastdaley.com.
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East Daley CapitalJohn Lange, 303-499-5940Vice-President,
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