By Ben DuBose
HOUSTON -- Drilling development plans for US shale plays are
rapidly shifting away from dry gas and toward areas rich with
natural gas liquids (NGLs), an executive with energy
consultancy Purvin & Gertz said on Thursday.
Ken Otto, senior vice president with the company, said the
proportion of US rigs directed to natural gas has dropped from
near 80% in early 2009 to around 40% at present as the focus
turns back to oil.
is due to the extremely high spread between US oil and gas
prices, said Mr. Otto, who spoke in a presentation at the
IHS World Petrochemical Conference.
Wet shale areas such as the Bakken in North Dakota and
Niobrara in Colorado are quickly rising in popularity despite
their limited size, Mr. Otto said.
But liquids areas in the vast Marcellus region of the
eastern US have also steadily increased in 2010, 2011 and early
2012, he noted.
Shell recently picked a spot in the Marcellus region near
Pittsburgh, Pennsylvania, as the site of its upcoming ethylene
On the other end of the spectrum, wet development in the
Eagle Ford and Haynesville plays has dropped in recent months,
according to Mr. Otto.
Overall, total NGL production from US shale plays is poised
to rise by 440 million bpd from 2011 to 2015, he predicted.
Thats on top of a 270 million bpd increase, or 15%, from
2008 to 2011.
To handle the growing supply, petrochemical projects such as the one from Shell
will be needed to consume the rising supply of feedstocks such as ethane, Mr. Otto
It is absolutely critical that petrochemical plants be equipped to
handle ethane, he said. We see the greatest growth
in ethane, though there will be a lot of growth in all NGL
Significant expansions of NGL pipelines and
fractionation capacity will also be needed, Mr. Otto cautioned,
but added that many of those projects are already in the
On the whole, rising interest in NGLs appears to be
sustaining an industry that very easily could have been
crippled by the dramatic falloff in US natural gas prices.
Gas production and projects are continuing to expand in
spite of very low gas prices, Mr. Otto said.
The World Petrochemical Conference, held at
the Hilton Americas in downtown Houston, ends on Thursday.