In between natural gas and crude oil is a group of hydrocarbons referred to as natural gas liquids NGLs. Natural gas liquids are extracted as a mixture of hydrocarbons and other gases and are produced and separated from one of two sources: natural gas processing or crude oil refining. See Appendix for additional information. Mainly due to the shale revolution, which uses horizontal drilling and hydraulic fracturing, NGL production in the United States has grown at a rapid rate since This report focuses on NGLs and not the various petrochemical products, like plastics or fertilizer, they can create.
It is essential to differentiate NGLs, the focus of this report, from similar categories and acronyms to avoid any potential confusion. Hydrocarbon gas liquids HGLs , as defined by the U. Energy Information Administration EIA , refer to a broader category of hydrocarbon liquids that includes the five NGLs as well as additional petrochemicals that can be made from crude oil at refineries through a process known as olefin cracking : ethylene, propylene, butylene, and isobutylene.
The state change—from gaseous to liquid—primarily allows for the economical transportation of natural gas via specially designed ships. LPGs are typically a hydrocarbon mix of propane, butane, and isobutane EIA has included ethane and olefin refinery products in this category prior to January LPG is often bottled and sold as "propane" for use in vehicles, grills, and other appliances.
With only two carbon atoms in its molecular makeup, it is the lightest NGL, the hardest to liquefy, and the one with the lowest heat content as measured in British thermal units or Btus. Due to the difficulty of liquefying ethane compared to the other NGLs, it is the most energy intensive and expensive to separate from raw gas streams and to store and transport after recovery.
The rise in ethane production has put downward pressure on its price and has prompted companies to export ethane. It has a much higher boiling point than ethane degrees Fahrenheit for ethane compared to degrees Fahrenheit for propane. Like ethane, it is typically stored in canisters at high pressure, so it can be transported as a liquid. This pressure is about one-quarter of what it takes to liquefy ethane at a similar temperature.
Propane has been exported for years as propane and as a component of liquefied petroleum gas or LPG ; the relatively low cost of U. Butane has a significantly higher boiling point 30 degrees Fahrenheit than either propane or ethane, but it is still a gas at room temperature and standard pressure.
Normal butane has two primary uses: as a fuel additive in motor gasoline usually during colder months and as a petrochemical feedstock. The critical petrochemical product that can be made from processing butane is butadiene, a key component in synthetic rubber.
Butane production has more than doubled since , while consumption and growth have been sporadic, rising in some years and declining in others. The relative surge in production has corresponded with an increase in exports as well. Butane, like propane, is an LPG component and exported in that form as well. Butane prices tend to be linked to oil prices because of its use as a gasoline additive. Isobutane C4H10 , by molecular makeup, is identical to butane with four carbon atoms.
The atoms, however, are arranged in a different shape than in butane, giving it slightly different properties, such as a different vapor pressure and boiling point. Alkylate is an ingredient of high-octane low-vapor-pressure motor gasoline. Other uses of isobutane include as a fuel for lighters and camping stoves, a replacement for Freon in refrigerators, and a propellant in hair and cooking sprays.
Isobutane makes up one of the smallest percentages of total NGL growth, due mostly to its relatively small contribution to the total makeup of NGLs. However, like the other NGLs, it has experienced a sharp uptick in production over the last decade. Consumption of isobutane is also rising. The United States is a net importer of isobutane, mainly from Canada.
Isobutane prices tend to follow butane prices, but at a premium because of the additional processing required to create it. They are a mixture of different hydrocarbons with five or sometimes six carbon atoms. Most pentanes are used as a blending fuel in oil refineries to make motor gasoline.
They are also used as a petrochemical feedstock, as a denaturant in ethanol to make it undrinkable, and as a diluent for heavy crude the fastest-growing source of demand. Pentanes production has grown, but not as much as other NGLs. Most exports of pentanes go to Canada, where their demand as a diluent is high.
The price of pentanes tends to track gasoline and crude oil prices. In , U. The distance, cost, and ease of taking NGL products to market can have a significant effect on their market prices and demand. Specific areas of the country, for example Texas, benefit from a long history of hydrocarbon extraction and processing. See Figure 1. These regions, mostly located on the Gulf Coast, can take advantage of already existing pipelines, refineries, processing plants, and petrochemical processing sites.
Other areas of the country, like the Appalachian region, Kansas, and North Dakota, have had difficulty adding infrastructure to match their growing output of NGLs. Figure 1. Energy Information Administration.
The storage, ports, and rail sites were digitized from EIA maps. Additionally, cross-border infrastructure and production areas are not shown on this map as crossing into Canada or Mexico.
In areas of the country, like Pennsylvania, where the construction of pipelines is lagging behind the increasing production of NGLs, the use of more expensive methods of transportation e. Most of the increase in NGL production has come from tight shale natural gas formations, some of which have high concentrations of NGLs.
In , the distribution by state of NGL production began to shift from the Gulf Coast region toward higher levels of output from the Bakken, Marcellus, and Utica shale formations of the Midwest and Northeast. NGL production. The vast majority of the growth in NGL production has been driven primarily by increases in ethane and propane production. The prominence of ethane and propane is due to the substantial portion they make up of NGLs. Figure 2. NGL Production. Source: U. To understand and accurately discuss the full well-to-market lifespan of natural gas liquids, it is useful to start with natural gas as a foundation.
NGL production coming from natural gas processing. Natural gas itself is composed of almost entirely methane C1 , the simplest of all hydrocarbons, and can come from both natural gas and crude oil wells. When it is produced from an oil well, it is referred to as associated natural gas. There is no chemical distinction between associated gas and natural gas coming from a gas well.
Natural gas, when extracted from a wellhead, contains methane, a variety of other hydrocarbons most of them NGLs , and various impurities including hydrogen sulfide and water. This mixture of chemicals is referred to as "raw gas," and it can come from both conventional wells and shale wells. When the raw gas has a high concentration of NGLs, it is described as being "wet.
The terms wet and dry gas are used to describe the concentration of NGLs in a natural gas stream. There is no definitive rule on what is wet gas and what is dry, but generally, natural gas with less than 2 GPM gallons per thousand cubic feet Mcf of NGLs is considered dry, and anything more than that is considered to be in the wet range.
For reference, the Barnett formation, with a typical GPM of 2. As of , 33 states had at least one natural gas well. Moreover, in that same year, there were over 2 million active natural gas wells in the United States. Pennsylvania, due mainly to the burgeoning Marcellus and Utica shale formations, had the second most, at over , In order to bring pure NGLs to market, they are first separated from the raw natural gas stream, and then a process called "fractionation" isolates the NGLs based on their boiling point.
The separation of NGLs from the raw gas stream occurs after impurities have been removed. When raw gas is initially extracted from a wellhead, it can contain varying degrees of impurities that may include water vapor, carbon dioxide, hydrogen sulfide, nitrogen, oxygen, helium, and particulate matter.
These impurities must be removed from natural gas before it can be pressurized and transported in long-distance pipelines that will carry it to market. If too many impurities are present in the gas stream, they can cause compressors to malfunction and pipes to corrode, rupture, or even explode. To remove these impurities, raw gas streams are sent by pipeline to treatment plants see Figure 3.
From there, the cleaned raw gas mixture is sent to a natural gas processing plant. In these plants the inlet-gas stream is cooled to the point where the NGLs in the stream condense into a liquid and separate out of the gas. There are three primary methods to cool off an inlet gas stream during natural gas processing: absorption, refrigeration, and cryogenic turbo-expansion.
The remainder use refrigeration in combination with either absorption or cryogenic turbo-expansion. At the fractionator, the NGLs are separated from one another. Since each component has a different temperature at which it changes from gas to liquid, the separation process typically involves heating and cooling the liquids at different temperatures.
After our facilities separate out the natural gas liquids from each other, the liquids are ready to be stored, transported or used by manufacturers and gas suppliers.
Common NGLs that are separated out include propane, ethane, butane, isobutane, pentane and natural gasoline. Propane is used to heat homes and businesses, while ethane is used to create clothes, tires and houseware. Butane, isobutane, pentane and natural gasoline are used for refining and fuel. But how do we safely transport NGLs?
Department of Transportation agency, pipelines are the safest way to transport NGLs. Download the infographic by clicking here. Propane is used worldwide as a heating and cooking fuel fire up that grill and as engine and industrial fuel. But, it also has use as a petrochemical feedstock and is a primary building block for many of the plastics we use every day ex: plastic bags and milk jugs. Normal Butane is used to blend into motor gasoline during certain times of the year.
Normal butane also is used to make the third LPG, isobutane, through a process called isomerization. Isobutane can also be fractionated from the gas stream and is also a crude oil refinery process byproduct. Isobutane is used to make alkylate, an octane-booster in gasoline. Again, this is key in the production of plastics. But some chemical companies require special blends. Chemical companies, you say?
Natural Gasoline is also a petchem feedstock, but its other uses are a little more varied. We saved the best use for last! Lastly, LNG, once warmed, reverts to natural gas for heating, cooking, electricity generation and industrial use.
Moreover, when kept in its liquid form, LNG finds a home as a transportation fuel alternative. Ready for more? Check out our virtual instructor-led training to take you further inside this dynamic market.
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