US Ethane Outlook: US Ethane Outlook: TheThe SequelSequelImplications for Midstream PlayersImplications for Midstream Players

Peter Fasullo

En*Vantage, Inc

pfasullo@envantageinc.com

Presented to the 86th Annual GPA Convention

March 13, 2007

22

Characteristics of a Sequel: A WarningCharacteristics of a Sequel: A Warning

A A sequelsequel is most likely a work of is most likely a work of fictionfiction in that is produced after a in that is produced after a

completed work, and is set in the same "universe", but at a later time. It completed work, and is set in the same "universe", but at a later time. It

usually continues elements of the original story.usually continues elements of the original story.

The popularity of a sequel comes about in large part because it is The popularity of a sequel comes about in large part because it is less less risky to build on a known successrisky to build on a known success than to gamble with new and than to gamble with new and untested characters and settings.untested characters and settings.

Sequels are often criticized as Sequels are often criticized as artistically inferiorartistically inferior, and accused of , and accused of simply repeating the story of the original worksimply repeating the story of the original work. .

33

A Flashback -- Market Climate Two Years AgoA Flashback -- Market Climate Two Years Ago

In early 2005, the market climate for ethane had vastly In early 2005, the market climate for ethane had vastly

improved for US gas processors:improved for US gas processors:

Lingering effects of an 2002/2003 economic downturn were over.Lingering effects of an 2002/2003 economic downturn were over.

Gas prices were dropping relative to crude oil after being over 100% of crude Gas prices were dropping relative to crude oil after being over 100% of crude in 2003 and near 100% in the 1in 2003 and near 100% in the 1stst half of 2004. half of 2004.

US ethylene production had rebounded in 2004 and ethane feedstock US ethylene production had rebounded in 2004 and ethane feedstock consumption was strong.consumption was strong.

Processing margins favored full ethane extraction instead of rejection just 2 Processing margins favored full ethane extraction instead of rejection just 2 years before. years before.

Major question back then was: Major question back then was: Will the good times last?Will the good times last?

44

What Was Our Conclusions Two Years Ago?What Was Our Conclusions Two Years Ago?

Conditions should remain favorable for ethane cracking and Conditions should remain favorable for ethane cracking and extraction, even with moderate ethylene production growth:extraction, even with moderate ethylene production growth: Ethane frac spreads should remain strong to encourage extraction in all Ethane frac spreads should remain strong to encourage extraction in all

processing regions.processing regions.

A tighter crude market keeps gas to crude price ratios below 90%.A tighter crude market keeps gas to crude price ratios below 90%.

This is not the time for processors to retreat from cryogenic plants.This is not the time for processors to retreat from cryogenic plants.

As ethylene production grows, ethane cracking increases and the As ethylene production grows, ethane cracking increases and the flexibility to switch off ethane diminishes. flexibility to switch off ethane diminishes.

By 2010, ethane production should reach and sustain the 800 MBPD By 2010, ethane production should reach and sustain the 800 MBPD level, with the Rockies and La Gulf Coast contributing a larger share.level, with the Rockies and La Gulf Coast contributing a larger share.

Ethylene producers need to track the regional shift in ethane supplies.Ethylene producers need to track the regional shift in ethane supplies.

55

Why Focus on Ethane Again?Why Focus on Ethane Again?

In 2006, midstream players announced $2 billion in projects betting on the long-term viability of ethane. Over 3 bcfd of cryogenic processing capacity, capable of extracting 150

MBPD of NGLs 450 bpd of new NGL pipeline capacity 215 bpd of additional fractionation capacity

Major NGL component – constitutes 39% of the US NGL barrel. In some processing regions, ethane is 50% of the NGL barrel . Ethane extraction mostly discretionary - sensitive to economic conditions.

Ethane has only one end use as an ethylene feedstock. US Ethylene industry needs ethane - constitutes 40% of their feedstock mix,

but the ethylene industry has a wide range of feedstock flexibility.

Ethane supply/demand has demonstrated swings of 150 MBPD or more in a market averaging around 660 MBPD for ethane from processing.

66

What are the Major Questions Today?What are the Major Questions Today?

Will new ethane volumes from gas processing flood the market?

What is the long-term viability of the US Ethylene Industry and the outlook for ethane feedstock consumption?

What will be the regional distribution of ethane supplies and which processing regions will have the economic advantage of extracting ethane?

Which segments of the midstream value chain are taking the most risk in betting on ethane and how can this risk be mitigated?

77

Topics to be covered todayTopics to be covered today

Overview of ethane supply/demand and simple Overview of ethane supply/demand and simple benchmarks to follow.benchmarks to follow.

Examine Examine fundamentals driving ethane cracking. fundamentals driving ethane cracking.

Look at ethane extraction trends and outlook for the future.Look at ethane extraction trends and outlook for the future.

Implications for midstream playersImplications for midstream players

88

Ethane supply & demand fundamentals appear Ethane supply & demand fundamentals appear simple, but they are complex and volatile.simple, but they are complex and volatile.

Key market drivers for ethane extraction and cracking:

Ethane Extraction Frac spreads Processing contracts Plant type Plant location Gas quantity & quality

Ethane Cracking

Ethylene business cycles

Cracker capacities & feedstock capabilities

Competing feedstocks

Ethylene co-products

Derivative Imports/Exports

Source: DOE, En*Vantage, Hodson

US Ethane Supply & DemandUS Ethane Supply & Demand

5-Year Average5-Year Average(2002-2006)(2002-2006)

SupplySupply DemandDemand

SourceSource MBPDMBPD %% End UseEnd Use MBPDMBPD %%

ProcessingProcessing 667667 8989 EthyleneEthylene 734734 9898

RefiningRefining 8383 1111 Peak Peak ShavingShaving

1616 22

TotalTotal 750750 100100 TotalTotal 750750 100100

99

Our analysis of ethane supply & demand focuses Our analysis of ethane supply & demand focuses on three primary drivers.on three primary drivers.

Primary DriversPrimary Drivers RationalRational InfluencesInfluences

Natural Gas to Crude Price Ratio(Henry Hub Gas/Cushing WTI on a BTU basis)

Gas sets price floor for ethane and petroleum derived feedstocks set the market price.

Processing Margins

Feedstock Economics

US Ethylene Production

Sole market for ethane extracted from natural gas.

Ethane consumption versus competing feedstocks

Natural Gas Production & Quality

Pretty Straightforward Volume of ethane that can be extracted given processing plant capacities and types

Both being inversely related to the gas to crude price ratio

1010

Relative value of gas to crude can affect U.S. NGL Relative value of gas to crude can affect U.S. NGL supply/demand, particularly for ethane.supply/demand, particularly for ethane.

Source: Platts, DOE and En*Vantage

Natural Gas to Crude Price Ratio*(Henry Hub Cash Price to WTI Price on a Thermal Basis)

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Pri

ce R

atio

%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Winter ‘00/’01

Winter/Spring ’03Hurricanes

’91 -’94: 56% ’95 -’98: 70% ’99 -’02: 78% ’03 -'05: 92% '06: 65%

"Gas Bubble" Mid '80s to Early '90s

"The Emergence of Gas Fired Power Plants"Extreme Gas Storage Overhang

* Based on 5.8 MM BTU/Bbl

Average 72%

Competing with Heating Oil

Competing with Coal

Competing with Residual Fuel

1111

Ethane (NGL) frac spreads are inversely correlated to Ethane (NGL) frac spreads are inversely correlated to the gas to crude price ratio.....the gas to crude price ratio.....

Source: Platts & En*Vantage

Ethane Frac Spreads - Mt. Belvieu Ethane minus Henry Hub GasCents per Gallon

(20)

(10)

0

10

20

30

40

50

Eth

ane

Frac

Spr

ead

(Cen

ts/G

allo

n)

-20

-10

0

10

20

30

40

50

Winter ‘95/’96 Winter ‘00/’01

2005 Hurricanes

Asian Crises/

Crude Price CollapseEconmomic Recession/

Crude CollapseWinter/Spring '03

Extreme Gas Storage Overhang

Record Crude Prices

Average 8.8¢

1212

Ethane extraction closely tracks ethane cracking, influenced by the gas to crude price ratio.

Ethane Cracking & Ethane Extraction vs Gas to Crude Ratio

350

400

450

500

550

600

650

700

750

800

Q1'99

Q2'99

Q3'99

Q4'99

Q1'00

Q2'00

Q3'00

Q4'00

Q1'01

Q2'01

Q3'01

Q4'01

Q1'02

Q2'02

Q3'02

Q4'02

Q1'03

Q2'03

Q3'03

Q4'03

Q1'04

Q2'04

Q3'04

Q4'04

Q1'05

Q2'05

Q3'05

Q4'05

Q1'06

Q2'06

Q3'06

Q4'06

Eth

ane

Ext

ract

ion

or C

rack

ing

MB

PD

40%

50%

60%

70%

80%

90%

100%

110%

120%

130%

Gas

to C

rude

Rat

io --

Hen

ry H

ub/W

TI

Ethane Cracking

(excluding refinery ethane)

Gas to Crude Ratio Source: Hodson, EIA, En*Vantage

Ethane Extraction

1313

A couple of concerning long-term trendsA couple of concerning long-term trends

For the past several years, ethane cracking does not seem For the past several years, ethane cracking does not seem to be increasing.to be increasing.

Ethane extraction seems to be trending down even Ethane extraction seems to be trending down even at times when extraction economics are extremely at times when extraction economics are extremely good.good.

This raises the questions of how much influence one trend is This raises the questions of how much influence one trend is

having on the other and are there specific demand and supply having on the other and are there specific demand and supply

factors influencing the long-term trends for ethane cracking factors influencing the long-term trends for ethane cracking

and extraction, respectively.and extraction, respectively.

Let’s take a closer lookLet’s take a closer look at what drives ethane cracking at what drives ethane cracking

1515

Ethane cracking, as compared to alternative ethylene feedstocks, is definitely trending downward.

1616

As ethylene production increases, ethane cracking increases As ethylene production increases, ethane cracking increases and the flexibility to swing ethane usage diminishes.and the flexibility to swing ethane usage diminishes.

E th a n e C ra c k in g v e rsu s

E th yle n e P ro d u c tio n

(E xc lu d in g R e fin e ry

E th a n e )

4 5 05 0 0

5 5 06 0 0

6 5 07 0 0

7 5 08 0 0

4 7 .

0

4 8 .

0

4 9 .

0

5 0 .05 1 .

0

5 2 .

0

5 3 .

0

5 4 .

0

5 5 .

0

5 6 .

0

5 7 .

0

5 8 .

0

5 9 .

0

E th yle n e P ro d u c tio n

(b illio n lb /yr)

1717

The shift in US ethylene capacity is estimated to shift the The shift in US ethylene capacity is estimated to shift the ethane cracking range downwards by about 40 to 55 MBPD.ethane cracking range downwards by about 40 to 55 MBPD.

¹ Capacity excludes plants that are mothballed; Source Hodson and En*Vantage

100.0%60.1100.0%62.3Total Effective Capacity

5.3%3.28.3%5.2Heavy Feed Crackers

45.1%27.152.8%32.9Flexi Feed Crackers

38.6%23.228.3%17.6E/P Crackers

11.0%6.610.6%6.6Purity Ethane Crackers

%Billion Lb/Yr%Billion Lb/Yrof Ethylene Plants

20002006Basic Types

Effective Capacity¹

Shift in US Ethylene Capacity

¹ Capacity excludes plants that are mothballed; Source Hodson and En*Vantage

100.0%60.1100.0%62.3Total Effective Capacity

5.3%3.28.3%5.2Heavy Feed Crackers

45.1%27.152.8%32.9Flexi Feed Crackers

38.6%23.228.3%17.6E/P Crackers

11.0%6.610.6%6.6Purity Ethane Crackers

%Billion Lb/Yr%Billion Lb/Yrof Ethylene Plants

20002006Basic Types

Effective Capacity¹

Shift in US Ethylene Capacity

1818

Growth in US ethylene production and capacity has stagnated over the past 5 years and the forecast is not that optimistic.

US Ethylene Capacity versus Ethylene Production(Billion Pounds per Year)

30

35

40

45

50

55

60

65

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Bill

ion

Lbs/

Yea

r

US becomes a Large Net Importer of Ethylene Products

Historical Ethylene Capacity

Ethylene Capacity Forecast

Ethylene Production Forecast for 1.5% AGR

Historical Ethylene Production

Feedstock Demand (MBPD)* Total Ethane Propane Butane C5's Gas Oil1990 1099 40.7% 19.1% 5.4% 27.6% 7.2%1995 1411 38.4% 24.2% 4.4% 25.8% 7.2%2000 1647 43.8% 18.7% 3.3% 27.8% 6.4%2006 1671 39.5% 22.4% 4.6% 26.3% 7.2%* Excludes refinery ethane/ethylene streams

During the 1990's U.S. ethylene production was growing at a rate 1.4 times GDP

Historical Data: CMAI, HodsonForecast: En*Vantage

1919

In the future, the stability of ethane demand continues to be uncertain with a wide range possible.

Ethylene Feedstock Demand for Ethane from Gas Processing(Thousand Barrels per Day)

540

560

580

600

620

640

660

680

700

720

740

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Eth

ane

Cra

ckin

g M

BP

D

540

560

580

600

620

640

660

680

700

720

740

Implied Ethane Consumption using Low Ethylene Production Forecast

Implied Ethane Consumption using 1.5%/Yr Production Forecast

Most Likely Ethane Cracking Range

Historical Data: HodsonForecast: En*Vantage

So what does the future So what does the future hold for ethane extraction?hold for ethane extraction?

2121

US NGL extraction is declining 2.5%/yr since peaking in 2001. US NGL extraction is declining 2.5%/yr since peaking in 2001. Declining gas production is the primary factor for lower volumes.Declining gas production is the primary factor for lower volumes.

Total NGL Extraction versus Marketed Gas Production(Data for Jan '99 thru Nov '06)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

NG

L E

xtra

ctio

n M

BP

D .

47

48

49

50

51

52

53

54

55

56

57

58

59

60

Mar

kete

d G

as P

rodu

ctio

n B

CFD

.

Total NGLs from Processing

Marketed Gas Production

Total Ethane Extraction from Processing

2.03 MM BPD

1.77 MM BPD

781 MBPD698 MBPD

2222

But we are also seeing signs that the liquid content in US proven But we are also seeing signs that the liquid content in US proven gas reserves is also declining. That is, gas is getting leaner.gas reserves is also declining. That is, gas is getting leaner.

Proved US NGL Reserves(Gallons in MCF of Proved Gas Reserves)

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Gal

lons

per

MC

F G

PM

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

Source: EIA and En*Vantage

2323

The processors along the TX and LA Gulf Coast have shown the The processors along the TX and LA Gulf Coast have shown the greatest declines in NGL extraction volumes. greatest declines in NGL extraction volumes.

Regional Change in NGL and Ethane Extraction VolumesMax 2001 vs Max 2006

-140

-120

-100

-80

-60

-40

-20

0

20

Vol

ume

Cha

nge

MB

PD

Change in NGL Extraction Change in Ethane Extraction

TX Inland TX Gulf Coast LA Gulf Coast N. LA/Ark New Mexico Rockies Mid-Continent Upper Midwest Other

+2% +1%

-22% -34%

+16% +149%

-17% -28% -6%-13% -14% -6% -7% -9% +7% -15% -87%

Max NGL Chg Max Ethane ChgMBPD -235 -80

% -11.4% -10.1%

Total US

2424

Ethane extraction is declining. If trend continues, ethane Ethane extraction is declining. If trend continues, ethane extraction volumes will be down 12% by 2011.extraction volumes will be down 12% by 2011.

Maximum US Ethane Extraction From Gas Processing(Thousand Barrels Per Day)

600

620

640

660

680

700

720

740

760

780

800

820

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

M B

P D

600

620

640

660

680

700

720

740

760

780

800

820Historical Trend If The Trend Continues

~2% per year decline

Low Ethane Demand Case

High Ethane Demand Case

2525

However, there is a number of new cryogenic plants under However, there is a number of new cryogenic plants under construction in the 3 of the hottest gas producing basins.construction in the 3 of the hottest gas producing basins.

What is the ethane extraction capability of these new plants What is the ethane extraction capability of these new plants assuming 95% utilization?assuming 95% utilization?

What is the growth potential for these growing gas What is the growth potential for these growing gas producing basins?producing basins?

What are the prospects for additional ethane extraction in What are the prospects for additional ethane extraction in these growing basins?these growing basins?

How much does this potential incremental ethane extraction How much does this potential incremental ethane extraction add to total ethane supplies from gas processing?add to total ethane supplies from gas processing?

2626

Major new cryogenic processing capacity will be installed in the Rockies and Barnett Shale in 2007 and 2008

Source: DOE, En*Vantage

2727

These new processing plants increase the industry’s maximum ethane extraction capability by an additional 65 to 70 MBPD

Source: DOE, En*Vantage

Maximum US Ethane Extraction Volumes Including Ethane Volumes From Announced Cryo Additions

500

550

600

650

700

750

800

850

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MB

PD

500

550

600

650

700

750

800

850Ethane Extraction from Existing Plants Ethane Extraction From Announced Plants

2828

In addition to ethane from announced processing plants, at In addition to ethane from announced processing plants, at

least one US LNG terminal will be recovering NGLs by 2009.least one US LNG terminal will be recovering NGLs by 2009.

Trunkline is building a 1.050 BCFD NGL extraction plant at its Lake Trunkline is building a 1.050 BCFD NGL extraction plant at its Lake Charles LNG Terminal.Charles LNG Terminal.

Depending on the quality of LNG being imported, we estimate that Depending on the quality of LNG being imported, we estimate that anywhere between 18 MBPD to 48 MBPD could be extracted.anywhere between 18 MBPD to 48 MBPD could be extracted.

Most likely, the Trunkline LNG terminal will process Nigerian LNG Most likely, the Trunkline LNG terminal will process Nigerian LNG which has as an average BTU content of 1150 +/- 25.which has as an average BTU content of 1150 +/- 25.

That would imply an ethane recovery rate of ~32 MBPD.That would imply an ethane recovery rate of ~32 MBPD.

To be conservative we are assuming Trunkline will extract at least 30 To be conservative we are assuming Trunkline will extract at least 30 MBPD. This ethane will not be economically sensitive because it needs MBPD. This ethane will not be economically sensitive because it needs to be recovered to make the LNG pipeline quality.to be recovered to make the LNG pipeline quality.

2929

If no additional cryo plants are built, ethane balances should be reasonable, unless “low ethane demand case” occurs. But…..

Source: DOE, En*Vantage

3030

Incremental gas production should come from Barnett Shale, Rockies, Anadarko, and Arklatex regions based on reserve growth.

Major Changes in Regional Proved Natural Gas Reserves - 1999 to 2005(Wet after Lease Seperation)

(8,635)

(2,608)

(1,650)

(73)

742 (+16%)

766 (+23%)

988 (+29%)

1,828 (+14%)

2,787 (+29%)

3,236 (+53%)

3,641 (+116%)

4,656 (+34%)

7,750 (+83%)

9,913 (+67%)

11,102 (+266%)

(15,000) (12,000) (9,000) (6,000) (3,000) 0 3,000 6,000 9,000 12,000 15,000Billion Cubic Feet

Federal GOM

Texas (Barnett Shale)………………………………………………….

Wyoming………………………………………………………………….

Colorado………………………………………………………………….

Oklahoma………………………………………………………………...

North Louisiana………………………………………………………….

East Texas………………………………………………………………...

Utah………………………………………………………………………..

New Mexico (Permian)………………………………………………….

Texas Panhandle………………………………………………………..

New Mexico (San Juan)…………………………………

West Texas (Permian)…………………………………………………..

South Texas……………………………………………………………..

South Louisiana………………………………

Kansas (Hugoton)………………………….

(-1%)

(-26%)

(-40%)

(-33%)

Source: EIA

3131

By 2011, there could be an additional 2.8 BCFD of gas production that could be processed. Should cryo plants be built?

Potential Production Change in Growing Gas Processing Basins2006 to 2011

0

1

2

3

4

5

6

Barnett Shale Piceance Green River Arklatex Arkhoma/Anadarko Permian Total

Bill

ion

CFD

There is another 2.8 BCFD of potential incremental gas that could be processed.

3 BCFD of cryogenic capacity under construction.

3232

Processors have to consider the consequences of adding more cryo capacity as there could be a large ethane supply overhang.

Source: DOE, En*Vantage

3333

In the future, more ethane will be extracted from the inland growth basins.

Source: DOE, En*Vantage

Regional Ethane Extraction Cases - MBPD

0

100

200

300

400

500

600

700

800

2006 Max Ethane Extraction 2011 Max Ethane w/ Announced Plants and LNGEthane

2011 Max Ethane w/ Announced Plants, LNGEthane and Possible "New" Cryo Plants

TX Inland

TX Gulf Coast

La Gulf Coast

New Mexico

Rockies

Mid-Continent

Upper MW

Upper MW

Mid-Continent

Rockies

New Mexico

La Gulf Coast

TX Gulf Coast

TX Inland

3434

There are several implications for midstream players if a large There are several implications for midstream players if a large ethane overhang causes ethane on ethane competitionethane overhang causes ethane on ethane competition: :

Independent gas processors with “keep whole” contracts have the Independent gas processors with “keep whole” contracts have the highest exposure to economic risks.highest exposure to economic risks. Processors in the Rockies should experience narrower gas basis in the Processors in the Rockies should experience narrower gas basis in the

future as new gas pipeline takeaway capacity comes on-line.future as new gas pipeline takeaway capacity comes on-line.

Processors with POP contracts or fee based contracts could prolong Processors with POP contracts or fee based contracts could prolong oversupplied ethane conditions.oversupplied ethane conditions.

Integrated midstream players should have less economic risks as Integrated midstream players should have less economic risks as they can distribute those risks across their NGL value chain.they can distribute those risks across their NGL value chain.

Logistic assets (pipelines, fractionation, storage) to be built or Logistic assets (pipelines, fractionation, storage) to be built or expanded to service NGLs from new processing capacity will also expanded to service NGLs from new processing capacity will also have exposure to ethane rich NGL streams.have exposure to ethane rich NGL streams.

3535

Let’s Review the Trends and the AnalysisLet’s Review the Trends and the Analysis

Demand Side:Demand Side:

US ethylene capacity not expected to increase. Contraction possible.US ethylene capacity not expected to increase. Contraction possible.

US ethylene producers will have greater feedstock flexibility.US ethylene producers will have greater feedstock flexibility.

Low ethane demand case: 600 to 620 MBPD. Low ethane demand case: 600 to 620 MBPD.

High ethane demand case: 700 to 725 MBPD.High ethane demand case: 700 to 725 MBPD.

Supply SideSupply Side US NGL (ethane) extraction is in decline, but announced plants plus US NGL (ethane) extraction is in decline, but announced plants plus

ethane recovered from LNG will offset this decline.ethane recovered from LNG will offset this decline. Any “New” cryogenic capacity could create a large ethane extraction Any “New” cryogenic capacity could create a large ethane extraction

overhang. Processing contracts can prolong oversupplied conditions. overhang. Processing contracts can prolong oversupplied conditions. Regional shifts to the Rockies and N. Texas will spur new “logistics” that Regional shifts to the Rockies and N. Texas will spur new “logistics” that

will be heavily dependent on ethane.will be heavily dependent on ethane.

More ethane demand variability

3636

The US Midstream Sector can no longer take for granted that the US The US Midstream Sector can no longer take for granted that the US Petrochemical Industry will always be there for ethane.Petrochemical Industry will always be there for ethane.

Any processor considering to add more cryo capacity must:Any processor considering to add more cryo capacity must: Carefully follow and evaluate the state of the US petrochemical industry.Carefully follow and evaluate the state of the US petrochemical industry. Examine economic position versus competition that may be more integrated Examine economic position versus competition that may be more integrated

across the NGL value chain.across the NGL value chain. Have the ability to reject ethane, because ethane market conditions will be Have the ability to reject ethane, because ethane market conditions will be

more volatile.more volatile. Structure processing deals to minimize economic damage when a downturn Structure processing deals to minimize economic damage when a downturn

occurs.occurs.

Logistic players will need to recognize and manage the risks of having Logistic players will need to recognize and manage the risks of having projects that handle high ethane content NGL streams .projects that handle high ethane content NGL streams .

In ConclusionIn Conclusion