If you were looking for the world's fastest growing oil producers, you might think of Russia or some of the other former Soviet republics, or perhaps Angola or the deepwater Gulf of Mexico. Looking further ahead, perhaps you would single out Brazil, or Canada's oil sands sector. But for the really impressive stuff, keep looking until you get to OPEC NGLs.
For years OPEC NGLs were of interest to few people but economists seeking to balance supply and demand, but the scale of current production and its expected growth in the short term is making it harder to ignore.
At the beginning of this decade, OPEC produced less than 3 million b/d of NGLs, according to IEA data.
These NGL volumes are not subject to the same voluntary agreements which limit OPEC members' crude supply, and several countries have been pouring money into expansion projects in recent years.
More often than not the additional NGLs are a result of efforts to boost gas supply, an area which has seen investments totaling billions of dollars, particularly in Iran, Nigeria, Qatar, Saudi Arabia and the UAE.
According to the IEA's most recent report, released July 10, this has helped NGL output to climb to an average 5.2 million b/d in 2009. This amount is set to jump by a massive 900,000 b/d next year to reach 6.1 million b/d, meaning the total volume will have more than doubled in less than a decade. If "OPEC NGLs" were a country, it would be a force to be reckoned with.
What's particularly interesting about the NGL figure, Richard, is that many analysts, including the Peak Oil crowd, regularly debunk the numbers. Not that they are arguing with the accuracy. But the reasoning is that the energy content of a barrel of NGLs is far less than the BTU content in crude. It is also a less "versatile" petroleum stream, in that a barrel of NGLs does not have as many applications as a barrel of crude. But still, the product keeps growing in supply. This is certain to have an impact on the spreads between crude and NGLs, as well as the spread between NGLs and products made from crude, e.g., gasoline and diesel.
Yes, the unconventional sources (Oil Sands and NGL) have been growing steadily and now, their share in Oil is 15% while the other 85% comes from Crude Oil.
These unconventional sources have 20% lesser energy content than Oil. But this truth is never told to people.
However the price at the gas pump shows the real cost.
In 2008, the share of Oil among the Top-5 sources (Oil, Coal, Natgas, Nuclear, Hydro) has gone down to 34.8% down from 35.5% while the share of Coal & Natgas are increasing steadily.
John/Max,
I am trying to learn about this Nat gas business. What is the price of NGL (Propane, Butane, Pentane, hexane +) in comparison to Crude oil. i heard some one say that NGL is worht more than crude oil? is it true? Where can i get prices of NGL? How can it be true if NGL has less energy contant then oil?
Sorry for the long time in answering! It's not a question you can easily answer; you would need data. You would need to compare the BTU content to the specific NGL to the type of crude, and each crude has a different BTU content. Just based on BTU content, a barrel of crude should be higher than a barrel of NGLs, but it's never that simple. A particular NGL grade might rise above a type of crude because it brings properties to the table for a specific petrochemical use. One thing that's clear is that NGL prices are tied more to oil than gas, even though they are generally stripped from natural gas.