Natural Gas Liquids

Natural gas liquids (NGLs), comprising ethane, propane and butane, are obtained during the production and processing of natural gas. Canadian natural gas liquids (NGLs) are priced at Mont Belvieu, Texas, the price reference point for North American NGL markets. Level of natural gas production, the amount of liquids in the gas and imports are the key factors influencing supplies of NGLs. NGL prices are mainly affected by petrochemical demand.

How Canadian markets work

NGLs are initially extracted from natural gas at field plants. There are almost 700 active plants in Canada with more than 600 located in Alberta. Others are in British Columbia and Saskatchewan. There is also some NGL production at the Point Tupper, Nova Scotia facility, which processes natural gas from Sable Island.

The Cochin, Enbridge and Alliance pipelines transport NGLs from Alberta to Sarnia, Ontario and to the United States. Cochin transports individual products such as ethane, propane and butane. Although Enbridge is mainly a crude oil pipeline, it also transports an NGL mix. In the high-pressure Alliance natural gas pipeline, NGLs are transported within the natural gas and are extracted at the end of the pipeline near Chicago, Illinois.