 Now that we've gathered the whales and brought them to a central point, we have to condition the gas before it can be put into a transmission pipeline. We do this in processing plants where we're going to remove a lot of the contaminants in our gases and extract as much of the heavier hydrocarbons as we can to sell them as propane, ethane, butane, etc. Basic operation of a processing plant for natural gas is to remove the heavy hydrocarbons. This protects the burner tip from volatile fuels such as propane and butane. They have a very high B2 content. Also by removing the heavy hydrocarbons, we manage to produce the much needed natural gas liquids, ethane, propane, butane, isobutane, and natural gas allines. There are various processes to extract the heavy hydrocarbons. The majority of natural gas liquids are produced through a condensation process. If you recall from high school physics, when you increase the pressure of something, you also raise its temperature. Then when you lower the pressure, the temperature cools down and condensation will occur. Another process is to use oils that can actually absorb some of the light hydrocarbons as the natural gas stream is passed over it. And finally there is fractionation where the natural gas liquids are moved from a composite stream into the various fractions, the propane, ethane, butane, etc. Another one of the operations of processing plant is to purify the gas stream. Raw natural gas coming out of the well has contaminants as well as inert gases which merely take up space. So the key here is to remove as much of the water as possible, the hydrogen sulfide, carbon dioxide, and nitrogen. Hydrogen can be removed using nitrogen rejection units at the processing plants. Dehydration can occur by using glycol absorption. Glycol is nothing more than ethylene glycol, the antifreeze that you would have in your car. Its boiling point is much higher than that of water. So when you boil the ethylene glycol, the water evaporates off of that. There is also a process known as amine treatment where sulfur can be extracted as well as carbon dioxide. There are various types of processing plants. The basic operation would be a simple separator tower. This is where the natural gas would flow through the bottom of the tower. The tower internally has collector trays and as the gas flows through the bottom to the top the natural gas or methane will rise to the top and move on out of the vessel and each of the liquids will lay on the trays based on their weight with the heavier liquids on the bottom. Using pressures and temperatures with compressors that will recirculate the natural gas throughout the processing plant and also reboilers, these are actually furnaces, the fuel by natural gas that will heat up the gas stream and then cool it down, hoping to knock out as much of the hydrocarbons as possible to create the natural gas liquids. Another form of plant is what we refer to as cryogenic. Most people think of cryogenic plants as freezing. The term being used here means to drop the temperature of the natural gas dramatically. You heat it up and then drop it as cool as you can. There are refrigerants used at the plant. You cool it down, you can expand the stream and then you'll cool down again and create condensation which knocks the liquids out and you circulate the gas for processing plant as many times as possible until you have approximately 98% methane which is then returned to the transmission pipe. The natural gas liquids are collected and brought to market. Another type of plant is known as a straddle plant. This is one that merely straddles the transmission pipeline itself, extracts natural gas from the pipeline, processes it and then redelivers the gas to the processing plant itself. It does not have natural gas wells gathered behind it. Here's a diagram of the generalized natural gas processing schematic. The first stage as you can see from the well head is to separate out any heavy oils from the gas. Then you have a condensate separator. This is where the water and some of the heavier liquids get taken out at first. The next phase is to totally dehydrate the gas stream, remove as much water as possible and then removing the contaminants. The hydrogen sulfide, carbon dioxide, nitrogen, et cetera. And of course then you can also remove the nitrogen using a nitrogen rejection unit or NRU. And then the demethanizer, again methane is natural gas. The demethanizer is going to extract the natural gas and return it to the pipeline on the residue side of the plant itself. And then finally the composite natural gas liquid stream is broken down into its individual fractions of ethane, propane, butane, the isomer of butane, isobutane, the pentanes which are also known as C5 pluses and then natural gasoline. This is data from the U.S. Energy Information Agency. This shows the increase in production in both natural gas processing liquids as well as liquefied petroleum gases over the years. There has been an increase especially in the last few years because of the new shale plays where there is oil. There is what is known as associated natural gas. It's produced in association with the oil. And as such it's very rich in hydrocarbon liquids and so it's processed. There are also natural gas wells that they themselves are high in hydrocarbon content so those get processed as well. The worldwide market for plastics has led to an increase in the demand for ethane. Ethane is converted into ethylene which is then converted into polyethylene and other plastics. Propane, pentanes, isobutanes have all seen an increase in the last decade. Here's just a couple of pictures of some processing plants in the upper left. You have a simple plant, small volume. You can see the tall tower there. That would be your separator tower. In the lower right you have a skid mounted plant which would be one section of a much larger plant. You would see multiple of these in a large plant facility but both of these plants are performing essentially the same function and that's to achieve condensation of airing temperatures and pressures and knock out natural gas liquids. In this diagram we look at the gas that comes into the plant and we're really focusing here on the amount of gas that is consumed by the plant or is knocked out in the form of natural gas liquids. So the heating content, the BTU content of the gas is reduced across the plant. We actually refer to that as PVR or plant volume reduction. You can see the diagram at the inlet gas is about a thousand MCF at a BTU content of 1.025 which is also known as the BTU factor. So we have 1.025 MMBTUs entering the plant and then you move over to the residue gas and you can see it's been knocked down to 967 MMBTU. The difference between those represents some of the fuel that is used by the processing plant itself but largely is the reduction in the amount of heating content that has occurred by knocking out the heavy hydrocarbons in the form of natural gas liquids. We're now going to talk about the individual natural gas liquids and the primary markets for them. This is again information for the Energy Information Agency which is part of the U.S. Department of Energy. You can see here that conventional crude oil and least condensate has increased over the last few years and is expected to continue to increase through the year 2035. This will no doubt be in large part due to the shale plays and the discovery of more and more oil in those shale plays. Natural gas plant liquids also are on the uptake and again mostly driven by the associated natural gas and the heavy hydrocarbon gas that's been found in some of the new shale plays as well as the increased demand for natural gas liquids in the global markets. The smaller amounts, you can see your unconventional oils, some biofuels and then again what is known as gas to liquids processing from natural gas. These are the main natural gas liquids components. These are the hydrocarbon liquids that are derived from natural gas. First you have ethane whose molecular symbol is C2H6, propane C3H8, butane C4H10, isobutane, the symbol for it is IC4 because it's an isomer of butane, the C4s. The pentane C5H12 otherwise known as C5 pluses and you have the natural gas saline, some are C5, some are anywhere from C6 to C9 and then condensates will all be, these are the heavy liquids, these will all be C6 pluses and generally speaking they can be moved to crude oil refineries and broken down into further products there. So each symbol represents the number of carbon atoms and the number of attached hydrogen atoms, thus the term hydrocarbons. As we mentioned earlier the NGLs must be removed from the gas stream, the BTU content will be too volatile for any type of burner tip use. They are used as chemical feedstocks, they're also used as gasoline blending components. The raw stream coming out of the processing plants for the most part is a composite stream known as Y grade. So these NGLs are basically ready for shipment by pipeline or by truck to other pipeline outlets, ultimately they head to a fractionator. Not every processing plant has a fractionation tower. The fractionation process separates the Y grade into its various individual component products, these are known as purity products, they represent approximately 90% of the single liquid for instance propane, ethane, butane. Let's start with propane, propane represents approximately 40% of the natural gas liquids market in the United States, primarily it's used for home heating and cooking. It also can be used as a chemical feedstock to make propylene for plastics. Primary markets for propane, Gulf Coast petrochemicals, Montbelview is the key natural gas liquid hub in the United States. It has a fractionation tower, it's a delivery and trading point. There are pipelines that deliver natural gas liquids to the plant as well as take away to markets. It has salt dump storage for natural gas liquids in the area and it is a global market in terms of the ability to export liquids to other countries from there. There's a secondary market in the Mid-Connard part of the United States located in Conway, Kansas. They have a smaller fractionation facilities there. Natural gas liquids Y grade are delivered to Conway. They also have storage on site. It is a trading point and there's petrochemical refining facilities adjacent to the Conway processing plant. There are pipelines that deliver natural gas liquids to and from the plant and there is southbound pipeline capacity to Montbelview for NGLs that cannot be fractionated at Conway. Ethane represents approximately 25% of the natural gas liquids market. It is a chemical feedstock primarily it is converted or cracked into ethylene and propylene for plastics rarely used as a fuel source. It can also be left in the gas stream as methane what we call ethane rejection. They are not recovering ethane they leave it in the natural gas stream. It is very price dependent. One has to equate the BTU equivalent of ethane versus natural gas to determine whether you recover the ethane or you leave the ethane in the gas stream. Same market hubs as other natural gas liquids Montbelview, Texas, Conway, Kansas. The term EP mix is used quite often when natural gas liquids are shipped in the form of 80% of ethane and 20% of propane and again that EP mix is strictly used for ethylene production. Utane or end butane as in normal butane 85% of butane is used for gasoline blending. It is mostly used in the winter when the reed vapor pressure of gasoline is high. Reed vapor pressure is as the footnote says indicator of the ability of the gasoline to vaporize at atmospheric pressure. So from the standpoint of emissions we do not want gasoline to have a high vapor pressure therefore a lot of it escapes to the atmosphere. Primary markets for butane, Gulf Coast and Northeast refineries. Market hub again Montbelview, Texas. It can be a cracking component for crude refining if you recall. In the presentation on crude there is one of the processes where some of the product is cracked. Some type of catalyst is used to crack it down to further products. Butane is one of those catalysts. One of the most obvious uses is as lighter fluid. It's also propellant and aerosol sprays. It replaced what used to be the CFCs or chlorofluorohydrocarbons which were deemed to have an adverse impact on the ozone layer. And so those have been banned and butane is one of the propellants that has substituted for the CFCs. It can be used household cooking also as bottled gas and it can be used as a refrigerant. Isobutane the isomer of butane, ibutane or sometimes known as methyl propane. It has similar uses to butane. It's used for gasoline blending as a chemical feedstock. It is also used as a refrigerant, especially in automobiles. It's known as R600A. And it's also known as iso-octane. It is an additive for gasoline that prevents the knocking when the octane level may be too low for particular engines. The natural gasolines or pentanes, these are the chemical symbols C5 plus. It's primarily used for gasoline blending again to maintain, stabilize the re-vapor pressure. Mostly in the summertime, the pentanes are added to gasoline. They can be used for ethylene production. They're also used as industrial solvents. They can be used for what is known as an ethanol denatrant. If you think about the production of ethanol, it comes from corn and grains. It is actually pure alcohol, the type of alcohol that could be consumed. And so something needs to be added to it so that people are, in essence, discouraged from drinking the ethanol. So the natural gasolines can be added to the ethanol as a denatrant, so it will not be consumed by humans, but it will be safe to burn in automobiles and trucks. It can also be used to dilute crude. And its major market hub is Montbelview, Texas.