natural gas processing overview
TRANSCRIPT
Overview Gas & NGL Processing
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Topics
Energy consumption & natural gas’s placeNatural gas sources Relationship with petroleum
Basic economics of natural gas & NGL Trends for pricesWhat are appropriate margins for the industry?
Gas processing as part of total production system
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Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Energy consumption & natural gas’s place
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Growth of U.S. Energy Consumption
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Source: 1850-1949, Energy Perspectives: A Presentation of Major Energy and Energy-Related Data, U.S. Department of the Interior, 1975; 1950-2010, Annual Energy Review 2011, Table 1.3.
0
20
40
60
80
100
120
1750 1800 1850 1900 1950 2000
Energy Con
sumed
(Qua
d = 10
15 BTU
)
WoodHydroelectric PowerNuclear Electric PowerCoalNatural GasPetroleum
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
World Energy Consumption by Source
Growth will not be uniform among all energy sources Renewable & nuclear power
projected to be fastest-growing energy sources, increasing by 2.5% per year Natural gas fastest growing
fossil fuel, increasing by 1.7% per year Coal grows faster than
petroleum because of China’s increasing consumption
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Source:International Energy Outlook 2013, U.S. Energy Information Agencyhttp://www.eia.gov/forecasts/ieo/
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Energy Markets Are Interconnected
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https://flowcharts.llnl.gov/commodities/energy
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Origins of Oil & Gas
Organic life buried in sedimentary rock
Transformation to hydrocarbons
Migration from source rocks
Accumulation of oil & gas
Flow of oil & gas through porous media
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Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Petroleum & Natural Gas
Consumption influenced by production & cost of fuels
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Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Flow of Natural Gas in U.S.
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Natural Gas Annual, 2014https://www.eia.gov/naturalgas/annual/
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Overview of Natural Gas Gathering & Processing
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Fundamentals of Natural Gas Processing, 2nd ed.Kidnay, Parrish, & McCartney
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Natural Gas ResourcesPetroleum & natural gas formed from decomposing organic matter in “source rock”
Conventional – gas & liquids migrate through permeable rock toward the surface until it is stopped by some trapping mechanism
Unconventional – gas & liquids are trapped at the source rock because of extremely low permeabilities
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Dec. 5, 2012 update, http://www.eia.gov/energy_in_brief/article/about_shale_gas.cfm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
North American Conventional Gas Fields
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http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/maps/maps.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
North American Offshore Gas Fields
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http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/maps/maps.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
North American Shale Gas Plays
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http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/maps/maps.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Marcellus & Utica Shale Formation Map
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http://marcelluscoalition.org/pa-map/
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Worldwide Shale Oil & Gas
Shale oil & gas have the potential to dramatically alter world energy markets
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Source: Supplemental presentation is support of International Energy Outlook 2013, U.S. Energy Information Agencyhttp://www.eia.gov/forecasts/ieo/
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Expected Natural Gas Production by Source
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Retrieved November 26, 2016http://www.eia.gov/energy_in_brief/article/shale_in_the_united_states.cfm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
U.S. Gas Processing & Transportation
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U.S. Energy Mapping System, retrieved January 10, 2016http://www.eia.gov/state/maps.cfm?v=Natural%20Gas
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Gas Plants Capacities in U.S. Lower 48
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http://www.eia.gov/todayinenergy/detail.cfm?id=8530
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
U.S. Gas Transportation, Storage, & Terminals
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U.S. Energy Mapping System, retrieved December 31, 2016http://www.eia.gov/state/maps.cfm?v=Natural%20Gas
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Interstate Natural Gas Flow
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Natural Gas Annual, 2014https://www.eia.gov/naturalgas/annual/
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Basic economics of natural gas & NGL
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Energy & Oil Prices
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Prices retrieved January 1, 2018http://www.bloomberg.com/energy/
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Energy & Oil Prices
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Prices retrieved January 1, 2018http://quotes.ino.com/exchanges/exchange.html?e=NYMEX
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Price Changes With Time
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Prices updated January 1, 2018Sources: http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm & http://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Price Changes With Time
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Prices updated January 1, 2018Sources: http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm & http://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
No Such Thing as a “Global” Gas Price
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http://www.slideshare.net/enalytica/gas-market-outlook-lng-business-fundamentals
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
NGLs Can Bring Value
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Prices updated January 1, 2018Sources: http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm & http://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
NGLs Can Bring Value
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Prices updated January 1, 2018Sources: http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm & http://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
NGLs Can Bring Value
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Prices updated January 1, 2018Sources: http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm & http://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Economic “Spreads”
NGL Frac spread Difference between the value of components in NGL vs. retaining in the natural gas
Frac Spread = (Value as liquid product) – (Value as component of natural gas)
Can include value of mixture of C2, C3, iC4, nC4, & C5+
• Can be tailored to meet actual NGL compositions• Some prices may be difficult to obtain on a daily basis
o NYMEX C2, C3, nC4, & C5+ from www.ino.com
Can be expressed as $/MMBtu (ideal gas heating value) or $/bbl (NGL volume)• Make use of values for standard liquid density & heating value
NGL frac spread requires a definition for NGL composition
Spark spread More important to electricity producer rather than gas processor Gross margin of a gas-fired power plant selling a unit of electricity having bought the fuel
to produce it
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Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Example – Propane Frac Spread
Using February values (Last): Propane - $0.97375 per gal Natural gas - $2.953 per MMBtu
Propane conversion factors: 91,563 Btu/gal ideal gas
gross heating value & standard liquid density
Calculation:
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Values retrieved January 1, 2018http://quotes.ino.com/exchanges/exchange.html?e=NYMEX
Btu1,000,000
$ $MMBtuSpread 0.97375 2.953gal MMBtuBtu
91, 563gal
$7.682 per MMBtu
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
NGLs Can Bring Value
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Prices updated January 1, 2018Sources: http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm & http://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
NGLs Can Bring Value
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Prices updated January 1, 2018Sources: http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_d.htm & http://www.eia.gov/dnav/ng/ng_pri_fut_s1_d.htm
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Example – Ethane Frac Spread
Using February values (Last): Ethane - $0.25563 per gal Natural gas - $2.953 per MMBtu
Ethane conversion factors: 66,340 Btu/gal ideal gas
gross heating value & standard liquid density
Calculation:
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Values retrieved January 2, 2018http://quotes.ino.com/portfolio/?id=309FD6
Btu1,000,000
$ $MMBtuSpread 0.25563 2.953gal MMBtuBtu
66,340gal
$0.900 per MMBtu
$0.06 per gal
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Gas processing as part of total production system
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Total Production System
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J.M. Campbell & CompanyAdapted from Gas Processors Association (GPA), Tulsa, Oklahoma
Oil
Water
Water Water
Non-associated GasGas Cap orAssociated Gas
GasWell
OilWell
GasWell
Crude Oil
ProductionSeparators
ProductionSeparators
SolutionGas
Field Condensate
GasProcessing
Module
Compression(optional)
Field Treating(optional)
CO for EOR2
Gas Lift andInjection
Sales Gas to Pipeline
EthanePropaneN-ButaneI-ButaneNatural GasolinePlant CondensateSulfur
LPG NGLs
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Overview of Gas Plant Processing
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Fundamentals of Natural Gas ProcessingKidnay, Parish, & McCartney, CRC Press, 2011
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Summary
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Summary
Natural gas supplies nearly 30% of the US’s energy Contribution expected to continue to grow
Production May be associated with petroleum production Unconventional sources – shale & coal
Primary distribution via pipelines Gas processing near the mouth of the pipeline system
NGLs bring value Comparison is the value as a liquid vs the heating value as part of the
natural gas
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Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
Supplemental Slides
Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])Updated: January 16, 2018Copyright © 2017 John Jechura ([email protected])
How do energy prices compare?
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