NGL Trading

NGL Trading

What is NGL TRADING CTRM?

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Whether it is propane, ethane, or butane commonly used in the production of rubbers, plastics stoves, and fuels for lighters, or propane, NGL is a common and very important product of the oil and gas industry. 

What Is NGL?

Natural Gas Liquid (NGL) is a group of naturally occurring molecular compounds found in natural gas. It is the major component of natural gas that is separated from the gas in its liquid form. Usually, the separation of NGL is done in a field facility through adsorption and condensation methods. Most times, so many people tend to classify NGL and LNG as the same. However, they differ entirely. LNG is also a natural gas; however, it is cooled under a temperature of 260 degrees below zero Fahrenheit until it becomes liquid. 

Opportunities in NGL Trading

In the last few years, there has been an increase in the extraction of Natural Gas Liquids (NGL) due to so many reasons. First, one of the major factors that led to increased extraction of NGL is the US shale boom. This is due to the decrease in the price of crude oil which has made oil and gas firms to expand their market. Secondly, the recent advancement in technological devices used for horizontal drilling and hydraulic fracturing has also led to an increased interest in NGL trading. Also, NGL provides natural gas producers with an opportunity to diversify their revenue and increase their stream of income.

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 Challenges in NGL Trading

On the downside, one of the major challenges in NGL trading is that producers struggle with the high cost of storing, handling, transporting the product. This is because NGL requires high or low pressure to be maintained in its liquid form during shipment. Also, NGL is generally flammable, which means that they require the use of special trucks, ships, and even storage tanks. Furthermore, due to their nature, there are limited markets to sell them off. 

Benefits of NGL Trading

Some of the benefits and reason why people engage in NGL Trading includes the following:

  • NGL can be converted into other chemical-based products
  • They can be used for various purposes such as fuels, home heating, and plastic production.
  • With recent advancements in drilling techniques, NGL is now widely available
  • They offer oil and gas firms and producers an additional stream of income.

Investing in NGL

Depending on the market price, the volume produced, and the cost of moving the products around, NGL could make oil and gas firms richer. Even though the story is different at the moment, where producers are complaining of the reduced market price. However, one industry that is currently enjoying the fall in the price of NGL products is the petrochemical industry, which is a common feedstock. Things like fabrics and plastics and can be produced from NGL. Therefore having access to cheap supplies has increased interests of petrochemical firms in investing in this industry, especially in the United States.

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NGL Trading for LPG, NGL and Liquids

The NGL business, like other trading organizations in the volatile commodity industry, are facing turbulent and challenging times as the global financial trends have led the close management of their risk exposure. Part of this management deals with the IT systems and applications needed in the course of executing business operations. In a bid to reduce the risks associated with volatile commodities like NGL, Commodity Trading and Risk Management (CTRM) systems like EnHelix have been at the forefront of providing a range of solutions to businesses in the volatile commodity industry. Its purpose is to provide an objective overview of vendor capabilities, coverage (both functional and asset), integration and deployment.

The EnHelix software is suited for application in LPG trading and NGL marketing because it appreciates the horde of NGL supply and demand complex business and risk factors. Its essentially provides an overview of vendor capabilities, coverage, integration and deployment. As such market participants can monitor and manage their credit risks and other business-related factors better. It integrates all your business operations under one single platform. This enhances efficiency and minimizes error with the reduction of the number of manual spreadsheets and silos legacy systems into an advanced platform. This concurrently handles the mutable demand/supply dynamics in the petrochemical and refined products markets.

Business Benefits

The EnHelix software supports NGL to buy contracts from gas processing plants base NGL to Y-Grade to purity products. It is also known to support complex NGL storage and inventories. In addition, the EnHelix software supports the Midstream WebSuite portal which allows operators to be more efficient by managing shippers nominations, contracts and invoices. It also powers a scheduling system that enables shippers to track the scheduled volume.

With the EnHelix software, which is the ideal CTRM for LPG, you get full integration with operations and engineering while getting support for complex NGL pipeline scheduling and distributions.

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