Range sees 6pc gain in realized 3Q NGL pricing

Market: Freight, LPG, Natural gas, Petrochemicals
23/10/24

Marcellus gas producer Range Resources received a 6pc higher premium versus Mont Belvieu, Texas, on its natural gas liquids (NGL) production in the third quarter owing to its access to markets in Europe and Asia.

The Fort Worth, Texas, based producer received on average $25.96/bl for its NGLs, excluding derivatives, up 6pc versus last year. That exceeded average NGL prices at Mont Belvieu, Texas, by $4.10/bl.

"Our ability to market ethane propane and butane into the international markets drove the highest NGL premium in company history, at over $4/bl over the Mont Belvieu index," said chief executive Dennis Degner.

Range reported its natural gas liquids (NGL) production rose 5pc year over year to 10.2mn bl, or 111,465 b/d, in the third quarter as its gas production rose by 4pc to 1.5 bcf/d.

Range updated its full-year guidance on its NGL pricing to Mont Belvieu plus $2.10-$2.35/bl, up from the 75¢/bl to $1.50/bl estimated in the second quarter, owing to gains in propane and butane prices at Mont Belvieu, Texas and higher spot premiums for exported cargoes out of the US. Range's average NGL estimates assumes 53pc of its production is ethane, 27pc propane, and 8pc normal butane.

Mont Belvieu, Texas, LST propane averaged 72.9¢/USG in the third quarter, higher than the average of 68.9¢/USG in the third quarter of 2023. Mont Belvieu butane prices averaged 97.25¢/USG in the third quarter, up versus 83.47¢/USG last year.

Range credited its term commitments on Energy Transfer's Mariner East system, which pipes NGLs from Range and other Marcellus producers to its export facility at Marcus Hook, Pennsylvania, with its higher realized prices on NGLs, particularly propane and butane, given higher netbacks from Europe and Asia.

"International demand and pricing for NGLs remained robust in the third quarter, leading to near maximum US export capacity utilization," Degner said. "Improving Panama Canal throughput access, and a growing global fleet of LPG ships improved waterborne freight rates, and these factors combined to drive export price premiums to new levels relative to the Mont Belvieu index, and Range's portfolio of transportation and sales contracts provided reliable access to these premium markets."

Argus-assessed prices for spot propane cargoes on a fob basis rose above Mont Belvieu +30¢/USG in mid-September, a multi-year high. Degner noted higher premiums on spot cargoes are expected to remain until US Gulf coast terminals expand capacity there in late 2025.

By Amy Strahan

Netback to Northwest Europe vs Mont Belvieu $/t

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Viewpoint: California dairy fight spills into 2025

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Viewpoint: US ethane to be oversupplied for 2025

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Viewpoint: Protectionist policies muddy US PE outlook

23/12/24

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