The ethane price spread between the Mont Belvieu, Texas, and Conway, Kan., hubs has narrowed to just over a nickel last week from nearly 23 cents per gallon (gal) in early June.

Since its six-week tumble from almost 51 cents/gal in mid-September to 31.5 cents/gal in late October, the Mont Belvieu ethane price has held fairly steady. The average during that six-week span is 31.14 cents/gal, while the past week’s price is 30.38 cents/gal, down 3.65% from last week.

But Conway’s price, which suffered a six-week string in the single digits during the summer, averaged 25.3 cents/gal in the past week, its highest level since the tracking week ending June 25, 2014, or nearly 54 months. As recently as 10 weeks ago, the Conway ethane price languished at less than 11 cents/gal. It has soared 135.3% since then and 27.2% in the last two weeks alone during its six-week upward trajectory.

Despite the price improvement, Conway’s ethane margin is still in the negative, although it improved to -3.4 cents/gal in the past week. Mont Belvieu’s margin continued to slump, averaging just over 1 cent/gal.

In a promising development for NGL on Dec. 11, an administrative law judge with the Pennsylvania Utilities Commission tossed a petition by residents of Delaware and Chester counties requesting an emergency shutdown of Sunoco’s Mariner East pipelines. The suit was the latest in an ongoing effort to upend the Mariner East project, which consists of Mariner East 1, Mariner East 2 and Mariner East 2X. Mariner East 2 is scheduled to go into service before the end of the year.

Judge Elizabeth Barnes ruled that the petitioners failed to show the likelihood of a fatality as a result of an accidental leak on the Mariner East projects, indeed even admitting that the chance of such a fatality was small. Sunoco, however, was able to convince Barnes that it would be financially hurt if the pipelines were shut down.

While the emergency shutdown request was rejected, a formal complaint to permanently shut down the lines remains before the judge. Whether it will go forward is uncertain as a result of the ruling on the emergency petition.

The residents’ lawyer said that the case relied on the possibility of a catastrophic outcome of an event such as a ruptured pipeline. While that case was made, he said, the judge insisted that the petitioners show the risk of that event occurring, which they were intent on avoiding.

In the week ended Dec. 7, storage of natural gas in the Lower 48 experienced a decrease of 77 billion cubic feet (Bcf), the EIA reported, compared to the Bloomberg consensus prediction of a 83 Bcf withdrawal and the Stratas Advisors expectation of a 91 Bcf withdrawal. The figure resulted in a total of 2.914 trillion cubic feet (Tcf). That is 19.9% below the 3.636 Tcf figure at the same time in 2017 and 19.9% below the five-year average of 3.637 Tcf.

Joseph Markman can be reached at jmarkman@hartenergy.com or @JHMarkman.

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