Click for a transcript of the Natural Gas Liquids video.
Hello, I’m Dan Brockett. I'm a member of the Shale Energy Education Team. And I work for Penn State Cooperative Extension. Today, I'm going to be talking a little bit about natural gas liquids.
[Slide]: Natural gas Liquids (NGL’s) are found in “wet gas” areas of shale gas producing regions.
[Dan]: I'm going to try to answer a few questions about natural gas liquids, like what is it, where is it, and why does it have added value. Then we're going to take a look at how NGLs are produced and processed, from wellhead to fractionation. Finally, we'll talk a little bit about how NGLs are used, and a bit of news regarding the future of NGLs in the Appalachian basin.
This map shows a portion of the Appalachian basin that contains Marcellus Utica and upper Devonian shale gas. You'll see the red line further east shows approximate Marcellus and upper Devonian wet-dry dividing line. The middle line shows approximate Utica Point Pleasant wet-dry line. And the line furthest west shows oil. For today's purposes, we're only talking about wet gas. And remember that these are only estimates of where these products are located.
[Slide]: Natural Gas Liquids: Each successive NGL has an additional carbon molecule and different chemical properties.
C1H4 – Methane (dry gas)
C3H8 – Propane
C4H10 – Butane (and Isobutane)
C5H12 – Pentane (natural gasoline)
[Dan]: Each successive natural gas liquid has additional carbon molecule and different chemical properties. Starting from the top, C1H4 is methane. That's referred to as dry gas, and generically referred to as natural gas. This is what we might expect to be piped into our homes and used to generate electricity.
All of those remaining hydrocarbons-- ethane, propane, butane, and iso-butane, and pentane-- are referred to as natural gas liquids. Natural gas liquids have added value based on BTU.
NGL’s Have Added Value (based on BTU)
||Net BTU Value
||Typical Volume (more to less)
BTU stands for British thermal unit. To give you some scale, 1 BTU equals approximately lighting one match and letting it burn to the bottom. So you can see that methane, our dry gas, has about 1,000 BTUs, where ethane is about 1,800 BTUs.
As those hydrocarbons get heavier, they contain more BTUs. You will also note the typical volume that comes out of a well in the Appalachian basin in the wet gas region contains more methane than ethane, more ethane than propane, et cetera. So lighter gases tend to be produced more often than heavier gases.
Pipeline specification regarding those BTUs. Interstate pipelines require less than approximately 1,100 BTUs per SCF. SCF may not be a common term for you. It stands for standard cubic feet. Standard conditions are normally set around 60 degrees Fahrenheit and about 14.7 pressure at sea level.
Now, unprocessed wet gas is often well over 1,200 BTUs. And even when those heavier hydrocarbons, like propane, butane, and pentane, are removed, the BTU content still often exceeds 1,100. Some ethane then needs to be removed to meet pipeline specifications while the rest of the ethane may be rejected if there's not a market. Rejected ethane does not mean that it's thrown away. It's simply added to the gas stream, and contributes higher BTUs.
To give you an example of price, if there are processing facilities in a pipeline to market, then the price received tends to be significantly higher because those products can be separated and sold at their best and highest use. The other way natural gas liquids are often sold are in batches. They're sold as batches and separated from dry methane gas, but not separated into their each individual components.
Liquids Price Impact Example, assuming 1250 btu gas)
Category 1: Natural Gas = $2.00. Rich Gas increment = additional $.50 for a total of $2.50/MCF
Category 2: Natural Gas assumes 30-% shrinkage to $1.40. The Rich gas increments are divided into ethane, propane, iso-butane, butane and natural gasoline for a total of $3.21 /MCF
[Dan]: So now, let's talk about the process of how these natural gas liquids fall out of the gas stream. Pressure and temperature causes the heaviest hydrocarbons to fall out of the gas stream as liquids at the wellhead.
What is condensate? In this case, we'll refer to it as field condensate because it comes from the field where the gas is being produced. These condensates are a group of hydrocarbons that don't fit easily in the mainstream product categories. Usually, we're talking about pentane (C5)plus. The lower the number is, the heavier the condensate is. And generally, the heavier, the better the price.
Now, everything in this scale is compared to water, which is a 10. A number higher than 10 floats on top of water. Lower than 10, sinks. This graphic demonstrates that. As you can see on the left, lighter to heavier. And on the right, those products-- propane is lighter than butane, which is lighter than pentane, et cetera.
[Slide]:Density of Liquids
The API gravity goes from lighter to heavier in the following list:
Propane, Butane and Isobutane, Pentane, Hexane, Heptane
[Dan]: The next step in the process is a compressor station. The purpose of a compressor station is to add pressure to get gas to an interstate pipeline or to go to further processing. As you might guess, a compressor station adds pressure, which causes more liquids to fall out. We'll refer to these liquids as natural gasoline or drip gas. In this picture, you can see that center tower is water that's fallen out of the system, whereas the four towers outside of the center contain that natural gasoline.
The next step in the process is the cryogenic expansion process. If it's economic to extract ethane, cryogenic processes are required for high recovery rate. Essentially, cryogenic processes consist of dropping the temperature of the gas stream to about minus 120 degrees Fahrenheit.
Now, this is going to condense most of the natural gas liquids while methane will stay a gas. This separates most of the wet gas from the dry gas, but does not separate all the components of natural gas liquids. In order to do that, it requires fractionation.
Now, you can see in this graphic, our mixed natural gas liquids come in on a pipeline. And then they go through a series of towers that have different pressure and temperatures. The boiling point will only be reached by one product per tower. So you have a de-ethanizer, a de-propanizer, a de-butanizer, a de-isobutanizer.
And what comes out at the end is condensate. We'll refer to this as plant condensate. Generally, pentane plus. This is a picture of a fractionation plant in Houston, Pennsylvania. That's in Washington County.
Now, let's talk about how natural gas liquids are used. The most plentiful of the natural gas liquids is ethane. And it's predominantly used as a petrochemical feedstock. We're going to talk more about that later. There is a portion of ethane that's used as a heating fuel source. That's only when it's mixed with methane or propane.
Next, we'll talk about propane. About 35% of propane is used as a petrochemical feedstock. The majority of propane is used as a heating fuel source. You might be familiar with that as a heating source in your home, or barbecue, or for drying corn or lumber-- things like that. Also, about 10% of propane is exported. Butane-- about 22% of that is used as a petrochemical feedstock.
About 10% is exported, but the bulk of butane is used as a blend stock for motor gasoline. Iso-butane is entirely used as a blend stock for motor gasoline. Or natural gasoline-- that's pentane plus-- about 10% is used as a petrochemical feedstock. About 10% is exported. The majority of it goes as a blend stock for motor gasoline, and 8% to 10% is used for ethanol denaturing.
The infrastructure for ethane markets is very important, because it's the most plentiful of the natural gas liquids. Just a few years ago, there wasn't an outlet for ethane in the Appalachian basin. But quickly, pipelines were built to the Gulf Coast, where there are many cracker plants, also to Sarnia, Ontario, where there are a few cracker plants, and most recently to the Marcus Hook facility.
There's a pipeline that goes across southern Pennsylvania, taking that to an export facility, where it's placed on a ship and exported overseas. There's also a local option that may develop in the next four to five years in terms of developing cracker plants in the Appalachian basin.
So the ethylene chain goes from natural gas. Those products are then separated, fractionated. And you might have purity ethane that comes out. That purity ethane goes to a cracker plant. At that cracker plant, that purity ethane is turned into ethylene. Ethylene is further refined into intermediate products like PVC, vinyl chloride, styrene, and polystyrene. And those products are used to make adhesive, tires, footwear, bottles, caps-- a lot of things that are used as everyday products.
The future of natural gas liquids in the Appalachian basin. Well, there are some outlets for ethane and other natural gas liquids now, but those opportunities are growing. And more outlets for ethane, including additional pipelines to Sarnia, additional exports, and additional pipelines to the Gulf Coast. But this also includes an announcement from Shell to build an ethane-only cracker plant in Beaver County, Pennsylvania.
I'd like to give some credit to those folks who contributed to this presentation, including the Penn State Marcellus Center for outreach and research, Jim Ladlee at Penn State, Wikipedia, engineeringtoolbox.com, photos from MPLX and from the American Chemistry Counsel, and a map from EIA. If you would like more information on natural gas liquids or anything else regarding natural gas, please go to our website-- naturalgas.psu.edu. And thank you, very much.