Energy Environmental Blog

EIA: NGL Value Driving Producer Activity

Written by Greg Russell | May 10, 2014 4:53:30 PM

According to the Energy Information Administration (EIA):  "The relatively high value of natural gas liquids (NGL) has led producers to target wet gas. NGL prices have traditionally been linked to crude oil, resulting in a significant price premium over pipeline-quality dry natural gas. More recently, the natural gas plant liquids composite spot price (which approximates a value of NGL produced at natural gas processing plants) has hovered roughly halfway between West Texas Intermediate (WTI) crude oil and natural gas spot prices.*** The result of this liquids price premium is that wet natural gas production is increasing at a faster rate than dry natural gas production."