December 12, 2007
Volume: 25
Issue: 49

Inside Look at Processing Trends

Wachovia Pipeline & MLP Symposium: Despite Questions, MLPs Still Look Strong

The title of the MLP discussion at the 6th Annual Wachovia Pipeline and MLP Symposium, “Growing Pains,” aptly described participants’ ambivalent feelings about the pipeline MLP market.

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Regency Delivers on Acquisition Talk

Regency Energy Partners’ presentation at Wachovia’s 6th Annual Pipeline & MLP Symposium in New York City on Dec. 6 focused on the company’s relationship with GE Energy Financial Services. Because of its ties to a financially strong partner, the company’s business strategy is focused on increasing the cash available for distribution to unitholders.

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Crosstex to Grow Organically

Growth was the name of the game at last week’s 6th Annual Pipeline and MLP Symposium and nowhere was it more obvious then in Crosstex Energy LP’s presentation. The company’s CFO, Bill Davis, spoke with GPR following the symposium and explained how the company’s growth strategy has transitioned from one built on acquisitions to one focused on organic projects.

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ONEOK Eyes Growth Through NGLs

At this past week’s 6th Annual Pipeline & MLP Symposium, ONEOK Partners’ chairman, CEO and president John Gibson’s presentation centered on ONEOK’s greatest potential for growth being through internal growth projects.

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MarkWest Focuses on Merger

MarkWest Energy Partners’ presentation at Wachovia’s Pipeline and Energy MLP Symposium last week centered on the merger between MarkWest Hydrocarbon Inc and MarkWest Energy Partners LP. The $734 million agreement, announced in Sept. and is expected to close in Q1 2008, will see Hydrocarbon become a wholly-owned subsidiary of Energy Partners. The agreement also includes Hydrocarbon’s NGL marketing business.

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Midstream News

Enterprise Continues to Target Piceance Basin

Enterprise Products Partners LP (link) continued to target the Piceance Basin of northwest Colorado as an area for growth by signing an agreement with Marathon Oil Company for Enterprise’s first wellhead gathering system in the region.

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Propanes Inventory Analysis

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Provident Increases Midstream Budget for 2008

Provident Energy Trust announced a C$187 million (U.S. $186 million) budget for 2008, including a midstream budget of C$43 million (U.S. $42.8 million). The midstream budget is up from the 2007 budget of C$41 million (U.S. $40.8 million).

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Inter Pipeline To Raise $150M

Inter Pipeline Fund agreed to sell 15.3 million Class A limited partnership units at $9.80 per unit for gross proceeds of $150,038,000. The offering includes an over-allotment option to purchase 2,296,500 units for up to 30 days after closing. Should the over-allotments be exercised in full, it will result in total gross proceeds of $172,543,700.

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Fractionation Spread

With NGL Prices Holding Firm, Frac Margins Drop in Conway

Following a drop in NGL prices at Mont Belvieu, the hub’s margin for fractionating the whole barrel rose 1%. The NGL with the biggest gain in frac spread margin was pentanes-plus, which rose 4% from last week.

Current Frac Spread (Cents/Gal)

Date: December 12, 2007

Conway

Change from

Mont

last week

Belvieu

last week

Ethane

97.98

103.27

Shrink

44.02

41.50

Margin

53.96

-9.12%

61.77

-0.03%

Propane

148.38

150.26

Shrink

60.73

57.25

Margin

87.65

-2.90%

93.01

1.88%

Normal Butane

173.24

176.24

Shrink

66.10

62.31

Margin

107.14

-5.19%

113.93

-1.25%

Iso-Butane

183.35

176.78

Shrink

68.75

64.81

Margin

114.60

-4.62%

111.97

1.69%

Pentane+

200.53

201.73

Shrink

74.39

70.13

Margin

126.14

-3.25%

131.61

4.00%

NGL $/Bbl

61.32

0.20%

61.44

-0.92%

Shrink

24.23

22.84

Margin

37.09

-4.79%

38.60

1.38%

Gas ($/mmBtu)

6.63

7.84%

6.25

-4.80%

Gross Bbl Margin (in cents/gal)

84.71

-4.89%

90.64

1.39%

NGL Value in $/mmBtu

Ethane

5.39

-1.50%

5.68

-1.95%

Propane

5.15

1.50%

5.22

-0.67%

Normal Butane

1.95

-0.22%

1.98

-2.51%

Iso-Butane

1.10

0.05%

1.06

-0.69%

Pentane+

2.56

0.86%

2.57

0.94%

Total Barrel Value in $/mmbtu

16.14

0.09%

16.50

-1.08%

Margin

9.51

-5.32%

10.25

1.19%

Price, Shrink of 42-gal NGL barrel based on following: Ethane, 36.5%; Propane, 31.8%; Normal Butane, 11.2%; Isobutane, 6.2%; Pentane+, 14.3%, Fuel, frac, transport costs not included. Conway gas based on NGPL Midcontinent zone, Mont Belvieu based on Houston Ship Channel.

Shrink is defined as Btus that are removed from natural gas through the gathering and processing operation.

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Box Score

Prices Hold at Conway, Drop Again in Mont Belvieu

The downtrend trend for NGL prices continued at MontBelvieu this week, as the overall weighted NGL barrel price dropped 1% from last week to $61.44. This decrease was largely due to the drop in butane and ethane prices, as each were down 2%. Conway saw the weighted NGL barrel price remain relatively flat, with a 12¢ increase.

Mont Belvieu

Eth

Pro

Norm

Iso

Pen+

NGL Bbl

Dec. 5 - Dec.11, '07

103.27

150.26

176.24

176.78

201.73

$61.44

Nov. 28 - Dec. 4, '07

105.28

151.26

180.66

178.00

199.83

$62.00

Nov. 21 - Nov. 27, '07

106.95

157.58

187.30

187.40

209.30

$64.25

Nov. 14 - Nov. 20, '07

105.32

154.48

181.74

182.16

206.48

$63.01

November '07

106.19

156.20

185.19

185.15

206.66

$63.62

October '07

97.34

141.26

165.30

169.33

189.72

$57.87

3rd Qtr '07

81.06

122.05

144.00

148.75

166.70

$49.85

2nd Qtr '07

71.82

112.99

133.22

146.05

166.49

$46.70

1st Qtr '07

58.52

96.88

113.30

121.20

134.86

$38.87

4th Qtr '06

61.85

94.86

111.23

111.99

130.83

$38.52

Dec. 5 - Dec. 11, '06

63.78

99.74

111.54

116.80

132.35

$39.64

Conway, Group 140

Eth

Pro

Norm

Iso

Pen+

NGL Bbl

Dec. 5 - Dec.11, '07

97.98

148.38

173.24

183.35

200.53

$61.32

Nov. 28 - Dec. 4, '07

99.45

146.16

173.62

183.25

198.80

$61.20

Nov. 21 - Nov. 27, '07

97.00

149.70

173.50

175.20

197.00

$60.87

Nov. 14 - Nov. 20, '07

97.50

153.94

178.20

183.34

194.04

$61.72

November '07

97.83

151.65

177.00

182.17

197.59

$61.65

October '07

93.75

139.82

159.84

168.88

180.97

$57.19

3rd Qtr '07

76.45

121.62

138.10

142.10

173.34

$49.81

2nd Qtr '07

66.99

111.36

125.67

151.38

181.91

$47.23

1st Qtr '07

52.36

94.54

104.26

123.71

135.25

$37.79

4th Qtr '06

52.31

94.13

105.88

114.65

129.25

$37.17

Dec. 5 - Dec. 11, '06

51.50

97.84

109.80

119.25

138.00

$38.40

Data Provided by Intercontinental Exchange. Individual product prices in cents per gallon.

NGL barrel in $/42 gallons

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