Pentanes Plus Supply/Demand

 

Pentanes Plus Supply/Demand

ST98

Updated March 2017

Supply

Figure S6.1

  • Pentanes plus (C5+) production increased for a fourth consecutive year, by an estimated 7.0 per cent in 2016, as producers continued to target liquids-rich areas.
  • Figure S6.1 [Tableau] shows production is expected to grow over the forecast period as a result of natural gas producers continuing to target condensate and gas containing pentanes plus.

Table S6.1

Table S6.1 [HTML] shows that pentanes plus production is expected to continue to steadily increase in the near term. One factor behind this increase is a continued focus by producers on gas production from liquids-rich formations such as the Montney, Upper Mannville, and Duvernay because pentanes plus provides added value. Another factor is that producers have implemented field recovery of condensate, which lowers the costs associated with recovery since there are no plant processing fees.

Production is forecast to reach 40.9 thousand cubic metres per day (103 m3/d)─0.3 million barrels per day (106 bbl/d)─by 2026, which is higher than the AER’s previous forecast of 31.1 103 m3/d (0.2 106 bbl/d) by 2025. The increase is due to revised natural gas liquids yields as a result of recent production trends, which have seen higher volumes of liquids per unit of natural gas.

Demand

  • Pentanes plus demand is estimated to have stayed almost flat in 2016 relative to 2015 due to the lower diluent demand as a result of the Fort McMurray wildfires and corresponding lack of growth in nonupgraded bitumen production. Pentanes plus demand is expected to reach 168.6 103 m3/d (1.1 106 bbl/d) by 2026 in response to the forecast increase in bitumen production and associated demand for diluent.

Pentanes plus is used as diluent that is blended with nonupgraded bitumen and heavy crude oil to meet pipeline specifications. Alberta demand for pentanes plus is expected to increase due to forecast growth in nonupgraded bitumen. Alberta imports of pentanes plus are also expected to increase over the next 10 years to meet the forecast shortfall between the availability of and demand for diluent. Alberta currently imports pentanes plus by rail and pipeline, including by Kinder Morgan’s Cochin and Enbridge’s Southern Lights.