It took nearly a decade, but there has been a changing of the guard at the top of Hart Energy’s rankings of top NGL producers. A year after falling out of the top gas processor spot, DCP Midstream Partners surrendered the top spot in the producer rankings, based on 2017 numbers, to Energy Transfer Partners.

Last year, Energy Transfer wasn’t officially ranked since we were unable to obtain confirmed figures—but they were previously second in our rankings for the previous year. The biggest move saw DCP Midstream tumble all the way down to No. 4 for NGL producers.

Energy Transfer produced 467,500 barrels per day (bbl/d) in 2017, which was a good-sized lead over Enterprise Products Partners, which retained the No. 2 spot in the rankings with 404,433 bbl/d. Perhaps the most impressive movement in the NGL rankings was by MarkWest Energy Partners, a subsidiary of MPLX LP, which reported an 18% gain from 2016 with 394,000 barrels per day (Mbbl/d) in 2017.

Nearly as impressive was MarkWest’s 12% gain in its gas processing figures for 2017, which increased to 6.46 billion cubic feet per day (Bcf/d) and allowed the company to retain its spot atop our gas processing rankings. Enterprise Products Partners moved back into the second spot in our processing rankings after a 1% gain to 5.16 Bcf/d. DCP Midstream Partners fell to the No. 3 position in the rankings, with 4.77 Bcf/d of gas processed.

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Anticipated rankings

The movement up the charts by both Energy Transfer and MarkWest Energy Partners was not unexpected. In fact, in recent years while speaking at multiple Hart Energy conferences, both companies said they would top these rankings by the 2016-2017 time frame. The proved themselves correct.

The rise of Energy Transfer Partners and MarkWest Energy Partners to the top of our rankings is in many ways another sign of the dominance of the big Permian and Appalachian basins. Energy Transfer’s strength in South Texas has pushed the company become the largest NGL producer in the country, while MarkWest’s large asset base in the Marcellus and Utica shales has seen it become the top gas processor in the country.

Planned resurgence

DCP Midstream Partners held the top spots for nine years before dropping to second in the top gas processor rankings for 2016, but has fallen in both rankings in recent years. However, the company says its growth program, dubbed DCP 2.0, is progressing well.

“DCP 2.0 is all about transforming people, processes and technology, and differentiating DCP competitively in our industry,” Wouter van Kampen, chairman, president and CEO of both DCP Midstream and DCP Midstream Partners, said during the company’s conference call to discuss 2017 earnings.

This new strategy by DCP is heavily focused on technology to help raise margins, lower costs and improve reliability.

“Make no mistake of viewing this as merely implementing sleek apps and putting plan screens up in a control room. This is all about disrupting the industry to change how we deliver midstream services more competitively and reliably. To do that, we started by looking outside the midstream space,” van Kampen added.

DCP plans to follow other companies that reinvented themselves by hiring new workers from outside the industry to work with industry veterans to help drive innovation.

The first of DCP's new innovations from this strategy is the integrated collaboration center (ICC), which takes the place of a traditional control room. The ICC uses information from data sources such as SCADA, engineering, contracts, financial systems and real-time prices to inform plant operators how they can optimize returns and reliability from DCP's integrated plant system. These improvements should result in increased NGL production and gas processed in the coming years.

Reaching new markets

Not that other companies aren’t planning to further improve efficiency and production levels.

Energy Transfer is expanding its asset base in Mont Belvieu, Texas, by adding a fifth NGL fractionator in the hub through its Lone Star NGL subsidiary. This 120 Mbbl/d fractionator will increase the company's total fractionation capacity to 640 Mbbl/d when it comes online in the fall. This system has access to most of the global markets through the Houston Ship Channel and is connected to nearly every play in the country, which will help the company further increase its volumes.

Enterprise Products Partners has long been one of the largest midstream operators at the big Mont Belvieu gas liquids hub. The company recently completed construction on its ninth fractionator there. This 85 Mbbl/d facility will increase the company’s total fractionation capacity in Mont Belvieu to 740 Mbbl/d.

The location of these assets along the Houston Ship Channel has also helped Enterprise enter into the petrochemical midstream space as that sector has grown in the past decade. North American petrochemical crackers have been operating at a more than 90% run rate for much of this year with a focus on converting ethane to polyethylene. Demand from the U.S. petrochemical industry for ethane is about 1.5 million barrels per day (MMbbl/d) and may exceed 1.8 MMbbl/d by the end of the year.

“U.S. petrochemicals had extremely positive long-term fundamentals [in the first quarter of 2018] because of rich shale gas, which has given them a significant global advantage,” Jim Teague, CEO of Enterprise Products Partners, said during a conference call to discuss the company’s first-quarter earnings.

“Enterprise has the premier supply position in the industry to meet this growing feedstock demand and we're moving into providing midstream-type services for both domestic and global petrochemical [companies],” he continued.

Increasingly these services will include exports for crude, natural gas, ethane, LPG, petrochemicals and refined products. “We don't think anyone is better situated to serve growing global demand than Enterprise,” Teague said.

Building a new hub

While Enterprise’s existing hub in Mont Belvieu, Texas, is helping it enter new markets, MarkWest Midstream Partners has taken a different approach by building a hub to handle volumes out of the rapidly developing Appalachian Basin.

In just under a decade, MarkWest has gone from a company that was unranked in this annual listing of the top gas processors to the largest gas processor in North America. This ascension was the result of long-term planning to focus resources on emerging plays. Today, MarkWest has the largest gathering and processing complex in the Appalachian Basin and serves both Marcellus and Utica producers.

MarkWest continues to grow in the Northeast along with producers. It recently completed construction on its ninth natural gas processing plant at its Sherwood Complex in Doddridge County, W.Va. This complex has a total processing capacity of 1.8 Bcf/d and is planning to add 200 MMcf/d of processing capacity via two new processing plants.

An additional 200 MMcf/d of processing capacity is also scheduled to be added at its Houston, Pa., complex. In total, MarkWest’s parent, MPLX LP, plans on adding 800 MMcf/d of incremental processing capacity and 100 Mbbl/d of additional fractionation capacity in the second half of 2018.

While it garners a great deal of attention, the Northeast isn’t the only important play for MarkWest. The company also has important assets in the Permian Basin and the Midcontinent Stack play. MarkWest doubled its processing capacity in the Permian through its 200 MMcf/d Argo natural gas processing plant and is building the 75 MMcf/d Omega processing plant in Oklahoma.

New blood

There was one new entrant into the rankings this year as Oklahoma City-based Enable Midstream Partners placed 10th in the top NGL producer rankings with 90,110 bbl/d. Formed in 2013, Enable has a significant asset base of 14 processing plants with a total capacity of 2.5 Bcf/d, more than 13,000 miles of gathering lines, just under 8,000 miles of interstate pipeline, and just over 2,000 miles of intrastate pipeline.

Enable has seen an increase in activity out of Oklahoma’s Anadarko Basin with a 29% increase in processed volumes out of the play since the first quarter of 2016. The company plans on capitalizing on this growth with its Project Wildcat, which is designed to provide producers with access to natural gas markets in Texas via Energy Transfer’s Tolar Hub.

“Enable is uniquely positioned to serve the significant production growth [out of the Anadarko Basin] and our Project Wildcat remains on track to begin service in the second quarter of 2018, adding 400 MMcf/d of processing capacity and providing new markets for Anadarko Basin production,” President and CEO Rod Sailor said during a conference call to discuss first-quarter earnings.

Given the scale of this project, Enable Midstream may come out as the top gas processor in the rankings in future years.

The exact ranking positions for the top processors and NGL producers in the next decade won’t be known anytime soon, but if it’s anything like the 2017 listing, the rankings will be determined by decisions processors and producers make today.

Frank Nieto is a freelance writer based in Washington, D.C.

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