Producers of natural gas liquids (NGLs) have always depended on marketing help to get the best deal for their products. While exploration, design, and production are specialties of upstream companies, not all choose to invest heavily in a marketing and logistics team. That’s where midstream companies and consultancies often shine, providing valuable insight into supply chain agreements, fixed price hedges, and other market dynamics. However, as supplies of NGL have swelled across North America, prices have tumbled.  The result: deeper NGL market analysis and more short-term anxiety.

Ethane, a significant molecule recovered from NGL extraction and fractionation, is included in the supply glut, produced in such quantities that regional and national demand hasn’t been able to keep up. This glut of ethane, combined with a major price drop of more than 40 percent in 2014, has put some production companies in a bind. Some have turned to midstream service providers and consultancies for NGL marketing services, while others have depended on in-house research and marketing teams. One approach has been to take advantage of the possibility of linking ethane prices to oil through companies with cracking facilities and exportation deals to Europe and beyond. Others have taken a more diversified approach, looking not only to export routes but also moving ethane to regional midstream markets and petrochemical companies as well as supplanting natural gas streams.

The U.S. propane market is not in the best of shape either, suffering its share of price declines. Storage space is also a problem, especially in Canada, where underground propane storage is six times fuller than it was this time last year. Increasing exports could be an option; in fact, U.S. propane and propylene exports have increased substantially in the last two years according to data from the U.S. Energy Information Administration. However, as always, infrastructure is vital. With one export terminal rejected and another on shaky ground in the Northwest, it seems both Canadian and U.S. producers will continue to gauge the market as well as company assets, looking for signs of rebound and other opportunities for reducing inventories.