NGL production is expected to balloon in coming years, according to recently released data. However, a surge in NGL production will be met with growth challenges.

"Following a sharp decline in natural gas prices due, in part, to the energy industry's success in exploiting unconventional resources, investors are now wondering if NGLs will follow a similar path as natural gas," Simmons & Company International said in a recent research note. "While the events unfolding in the energy industry will no doubt yield national economic benefits for years to come and should be viewed as positive, a near-term challenge exists to match growing supplies with lagging demand growth that could lead to a near-term oversupply of NGLs."

The report, released in late September, notes that NGL production is expected to grow by about 15% in 2013. It will swell another 20% the following year. However, this production surge is expected to be met with growing pains.

Plenty of good news is also on the horizon for NGL growth.

For example, the report notes that increased pipeline capacity—set to begin service between fourth-quarter 2012 and first-quarter 2014—from gas processing plants to Mont Belvieu, Texas, will help with debottlenecking NGL constraints in the Bakken, Rockies and Midcontinent. Better still, such pipelines will have extra capacity, which could accommodate NGL supplies as they continue to grow.

And already, midstream operators have committed billions to expand gas processing, pipeline and fractionation capacity. It's all being done in an effort to keep pace with anticipated production growth.

Yet, it's clear that more still must be done.

"The energy industry faces a challenge to coordinate upstream, midstream and downstream activities in order to accommodate growth in production and demand. For midstream operators, a key challenge is matching changing supply growth with sufficient infrastructure capacity to effectively and efficiently match production with demand."

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