What are natural gas liquids – LGN?
Natural gas liquids (NGLs) are components of natural gas that are separated from the gaseous state as liquids. This separation occurs in a field installation or a gas treatment plant by absorption, condensation or other methods. Natural gas liquids are classified according to their vapor pressure:
- Low = condensate
- Intermediate = natural gas
- High = liquefied petroleum gas
Understanding natural gas liquids
NGLs are valuable as separate products and therefore it is cost effective to remove them from natural gas. Liquids are first extracted from natural gas and then separated into different components.
Natural gas liquids are hydrocarbons. A hydrocarbon is a molecule composed exclusively of carbon and hydrogen. As hydrocarbons, NGLs belong to the same family of molecules as natural gas and crude oil.
Key points to remember
- Natural gas liquids (NGLs) are components of natural gas that are separated from the gaseous state as liquids.
- NGL applications include cooking, heating, plastics and fuels.
- NGLs can be expensive to handle, store and transport.
- The United States has a growing export production of NGLs.
Types of NGLs and their applications
The chemical compositions of NGLs are similar, but their applications vary widely. There are many uses for NGLs, including cooking, space heating and blending fuels for vehicles.
Applications include the production of plastics and petrochemical raw materials – raw materials introduced into an industrial production process to produce a different end product. Commercial preparations include plastics, plastic bags, antifreeze and detergents.
Applications and uses include residential and commercial heating, cooking fuel, small stoves and petrochemical raw materials. Some vehicles also use propane as fuel.
Butanes can be mixed with gasoline and propane. Products include synthetic rubber for tires and lighter fuel. In its purest form, butane is useful as a refrigerant. Combined with propane, it becomes liquefied petroleum gas (LPG).
Industrial use can include raw materials from refineries and petrochemical raw materials. Commercial preparations include aerosols and refrigerants.
Pentanes are used in natural essence and as a blowing agent for polystyrene foam. Pentanes plus, a special category also known as natural gasoline, is blended with vehicle fuel and exported for the production of bitumen in the oil sands. Natural gas is pumped into heavy crude oil reserves, which allows it to flow more easily.
Challenges and opportunities
The shale boom in the United States has increased NGL extraction rates. NGL extraction is positively linked to the price of crude oil. As the market price drops, oil, gas and chemical companies are expanding their offerings to include NGLs and compensate for the loss of revenue.
Over the past 10 years, significant advances have been made in technologies such as horizontal drilling and hydraulic fracturing techniques, which involve the use of high pressure water or liquids to extract gas. As a result, LGN production has increased steadily. NGLs provide natural gas producers with additional income, which can help diversify their income.
A challenge with NGLs is that they are expensive to handle, store and transport compared to refined products. NGLs need to be maintained at high pressure or low temperature in their liquid state for shipping and handling. NGLs are highly flammable and require the use of trucks, ships and special storage tanks.
The volatility of natural gas liquids somewhat limits the number of markets available for their use. However, according to the U.S. Energy Information Administration, in 2020, the U.S. exported 1.4 million barrels per day of these liquid gases. The main export gas was propane, which was shipped to 43 countries, including Japan, Mexico, China and South Korea.
In addition, as production increases, so do the processing plants that separate NGLs from natural gas.
NGLs are used in petrochemical raw materials transformed into various chemicals.
NGLs have many applications, including for domestic heating, plastic production and as a fuel.
NGLs are more widely available thanks to advances in drilling techniques.
NGLs provide oil and gas companies with additional sources of revenue.
The United States has a growing export activity for natural gas liquids.
NGLs are expensive to handle, store and transport, which requires trucks, storage and special equipment.
NGLs require high pressure or low temperature to maintain their liquid state before shipment.
The increased use of NGLs has resulted in an increased demand for processing plants that separate NGLs from natural gas.
Their volatility limits the number of natural markets available for their use.
Real example of LGN
Exxon Mobil Corp. (XOM) is one of the largest producers of natural gas in the U.S. For example, let’s say a new production plant has opened in Texas, where drilling for natural gas has resulted in a significant amount of fuel . The gas is extracted from the well and sent to a production facility to be heated to different temperatures to produce ethane and propane from LGN.
Ethane is removed from the natural gas stream after reaching the necessary boiling point followed by propane, which is a heavier gas resulting in a longer boiling process. Once propane and ethane are removed from the natural gas stream, in a process called fractionation, NGLs pass through a pipeline.
Finally, the NGLs are shipped by specialized trucks to commercial companies, industrial factories and the local gas company. Propane can be used for residential and commercial heating as well as for cooking. Ethane is used to create plastics such as water bottles and plastic bags.