Gas Processing in 1982
Authors: Campbell John M. 
Published: December 2007

Distinguished Author Series articles are general, descriptiverepresentations that summarize the state of the art in an area of technology bydescribing recent developments for readers who are not specialists in thetopics discussed. Written by individuals recognized as experts in the area, these articles provide key references to more definitive work and presentspecific details only to illustrate the technology. Purpose: to informthe general readership of recent advances in various areas of petroleumengineering.

The dramatic changes in the energy marketplace during the 1970's will have asignificant impact on the planning and operation of gas conditioning/processingfacilities in the 1980's. The changing marketplace will dictate modification ofexisting facilities, changes in the design of new facilities, and a changingphilosophy about the operation of these facilities. Little strictly newtechnology will be employed; existing technology will be used differently toreflect changing economics. Greater process flexibility and efficiency shouldachieve a higher priority in process flexibility and efficiency should achievea higher priority in operations.

INTRODUCTION

From 1954 until passage of the U.S. Natural Gas Policy Act(NGPA) in late 1978, the price of gas was regulated at less than its fairmarket value. NGPA created what might be called "phased deregulation" with fullderegulation of new gas on Jan. 1, 1985. Now consideration is being given tospeeded-up deregulation. By 1980 the average wellhead price had climbed to$1.50 to $1.60/MMBtu ($1.42 to $1.50/kJ). With the depletion of old gasreserves and increased drilling for new gas, a price of $11 to $13/MMBtu($10.40 to $12.30/kJ) can be forecast by 1990, depending on the regulatoryscenario and the price of crude oil. To achieve parity on a heating value base, the price of natural gas per MMBtu is one-fifth to one-sixth the per-barrelprice of crude oil. Rapidly escalating prices of natural gas and its liquidby-products have a profound effect on gas processing. Before the early 1970'sgas was cheap and the cost (including shrinkage) of producing natural gasliquids (NGL) was correspondingly low. Once the right quantity and quality ofgas was available at one location it was almost automatically feasible toconstruct a facility to recover 60 to 85 % of the propanes plus and nearly 100%of the heavier ends. It was frustrating when supply exceeded demand, but it wasfeasible to store (or even flare) the excess. This no longer is a desirablestrategy. There is a second factor to consider. Following the dramatic rise incrude oil prices in 1973, the price of NGL escalated accordingly. But thenatural gas feedstock remained underpriced. Abetted by the economics ofexpansion refrigeration, it was very profitable to recover a majority of theethane and almost 100% of the propanes and heavier. This has continued to date.Will it continue much longer? Probably not! For a host of reasons beyond thescope of this paper, the market demand for ethane should reach a plateau by themiddle 1980's. The demand for propanes and butanes should follow decliningavailability, but their use as a petrochemical feedstock will depend on theircost compared with that of alternative feedstocks. This cost may be related tonatural gas and crude oil prices. This will affect how gas technology isapplied. In new facilities, it may be advisable to omit ethane recovery andsell it in the gas. In some cases the production of a mix for blending intocrude oil may be the superior alternative. The point is that factors governingthe application of the technology may change more than the technology itself.

FACTORS GOVERNING TECHNOLOGY

Historically many factors that will affect theapplication of technology in future years have been ignored or considered onlyinformally. Gas processing was an auxiliary function of production. Reservoireconomics usually ignored the impact of this production. Reservoir economicsusually ignored the impact of this activity.

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