US Midcontinent ethane/propane [EP] mix assessments at the Conway, Kansas, trading hub fell 1.50 cents to 16.50 cents/gal Tuesday, the lowest point in 10 years.
On February 8, 2002, Platts assessed EP mix at 15.50 cents/gal.
Sources say the region is swamped with too much supply and too little demand, as growing supplies from the Midwest crowd the Conway market and cannot adequately reach the chemical marketplace, located chiefly in the Gulf Coast.
"Ethane appears to still be stranded in Conway with future infrastructure projects to alleviate that, which should eventually bring prices to Mont Belvieu minus transportation and handling price," said Larry Schwartz, an NGL analyst at Wood Mackenzie Research and Consulting.
Mont Belvieu, Texas, is the key USGC benchmark point.
Oil and gas producers will continue to grow domestic NGL supply, Schwartz said, and those liquids will be seeking the Mont Belvieu market, "evidenced by the aforementioned projects from Kansas and Oklahoma to Mont Belvieu as well as the ATEX pipeline from Appalachia to Mont Belvieu."
While the bountiful supply of light-end natural gas liquids are attractive for chemical producers, traders say the economic margins on ethane and EP mix are not as lucrative as the heavier liquids, such as propane, butane and natural gasoline.
"There are more attractive products to move than EP," a Midwest NGL trader said.
A buyer said that Gulf Coast ethane values, which have plummeted 50 cents/gal since October to around 48 cents/gal, are also causing Midcontinent values to deflate.
"I would say it is the weakening of Mont Belvieu due to [chemical plant] turnarounds and [traders] trying to maintain the [geographical] spread," the buyer said.
