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Plunge in NGLs prices add to US gas producers' woes

North American producers have, since the collapse in Henry Hub prices, relied on higher-value liquids to offset low natural gas prices, but the hedge is ending

Prices for ethane and propane fell 48% and 32%, respectively, in 2012, data released by the Energy Information Administration (EIA) shows, placing further stress on the already difficult economics of unconventional natural gas. Spot ethane prices hit an all-time low of $0.22.5 per gallon in December 2012, compared with $0.78/g at this time last year. Propane has fallen to $0.80/g from $1.39/g in the same period. Prices for secondary products butane, isobutane and natural gasoline also fell by 5-12% in the past year. This is bad news for struggling gas producers. Last year's Henry Hub average price of $2.77 per million British thermal units (Btu) was the lowest in a decade, according to the

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