Natural Gas Liquids Separation and Recovery Process Economics Program Review 2016-05

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IHS CHEMICAL
Process Summary—Natural Gas

Liquids Separation and Recovery
Process Economics Program Review 2016-05
December 2016 ihs.com
PEP Review 2016-05

Process Summary—Natural Gas
Liquids Separation and Recovery
Richard Nielsen
Sr. Principal Analyst
IHS Chemical | PEP Review 2016-05 Process Summary—Natural Gas Liquids Separation and Recovery
PEP Review 2016-05

Process Summary—Natural Gas Liquids Separation and Recovery
Richard Nielsen, Sr. Principal Analyst
Abstract
Natural gas liquids (NGLs) are the C2+ liquefied hydrocarbons that are recovered above ground in natural
gas field facilities or in gas processing plants. Refineries are a secondary source of some NGLs. The
principal NGL products are liquefied petroleum gas, or LPG (a mixture of propane and butane), propane,
isobutane, n-butane, ethane, and C5+ natural gasoline. Besides the growing demand for these NGLs, some
NGLs are also extracted from natural gas in order to be able to market the gas by reducing its dew point to
below pipeline specification. Some natural gases contain impurities such as hydrogen sulfide that are
removed in treaters prior to NGL separation.
Supply of NGLs has grown considerably in North America with the rapid development and application of
shale fracking. Recovery of NGLs has provided additional revenue. The United States has switched from a
net importer of NGLs to an exporter. US demand for NGLs has lagged behind supply growth, but will
significantly increase when ethane steam crackers now under construction or planned for start-up come
online. Excess NGL production will be exported.
Worldwide demand for NGLs totaled 410 million metric tons in 2015, about 93.6% of total production of
over 438 million metric tons that year. Demand grew an average of 3.43%/yr over 2010 to 2015 from 364
million metric tons. The 3.22%/yr global growth rate of LPG, the NGL product most in demand, over that
period exceeded the growth rate of total petroleum demand (about 1.6%/yr). The largest producing regions
are North America (about 31% of total production) and the Middle East (about 30% of total production).
These two regions account for about 88% of regional surplus NGLs available for export to importing
regions. Europe and the Far East have the largest regional deficits of NGLs, accounting for about 37% each
of the total regional deficit.
This PEP Review summarizes the process economics and technology of NGL recovery from treated natural
gas. Recovering ethane or rejecting ethane (leaving ethane in the natural gas) is presented for each recovery
process. Turboexpansion processes are the most prevalent type of recovery processes. Economics are
determined for three types of turboexpander processes—the conventional process, a simplified gas
subcooled process, and a simplified recycle split vapor process. Economics of a generic NGL fractionation
process used to determine the product value of mixed NGL product of the gas separation are also presented.
This process summary highlights the new iPEPSpectra interactive data module with which our clients can
quickly compare historical production economics of competing processes in several major global regions.
The interactive module, written as an Excel pivot table, is attached with the electronic version of this review.
The module provides a powerful interactive tool to compare production economics at various levels, such
as variable cost, cash cost, and full production cost. An iPEPSpectra historical economic comparison
provides a more comprehensive way of assessing competing technologies, leading to a more valid
investment decision.
© 2016 IHS 1 December 2016

Contents
1 Executive summary 8
Introduction 8
Process overview 9
Technology 10
Processes 10
NGL recovery 11
NGL fractionation 12
Licensors 12
Comparison of process economics 13
Conclusion 16
Historical economics comparison—An iPEPSpectra™ analysis 17
2 NGL processes 19
Introduction 19
Natural gas processing 19
Natural gas treating 19
Natural gas separation 21
Ethane recovery 23
Ethane rejection 23
NGL separation processes 24
Adsorption 39
Compression 39
Membrane process 39
Product specifications 41
Shipping and storage 42
Environment impact and safety 42
3 Process economics 43
NGL recovery 43
Ethane recovery economics 44
Contracts 45
Capital costs 46
Unit consumption and variable costs 47
Production costs 51
Capital costs 58
Unit consumption and variable costs 59
Production costs 64
4 Market overview 71
Global NGL supply and demand 72
Supply 73
Demand 75
Ethane 75
Propane 77
LPG 77
Supply 78
Demand 79
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Butanes 80
Natural gasoline 81
End-use markets and demand drivers 81
Ethane 82
Propane 83
LPG 84
Butanes 85
Natural gasoline 86
Price history 87
Ethane 88
Propane 88
LPG 89
Natural gasoline 89
Producers 89
Capacity 90
Fractionators 94
New construction 98
New fractionator plant construction 99
5 Historical economics comparison—An iPEPSpectra™ analysis 100
Historical NGL prices 100
Historical process economics comparison—iPEPSpectra™ cost module 101
6 Detailed process economics 105
7 Cost bases 115
Capital investment 115
Production costs 115
Effect of operating level on production costs 116
Appendix A—Cited references 117
Appendix B—Product yields 122
Tables
Table 1.1 Three types of separation processes 11
Table 1.2 Selected commercial NGL recovery processes 13
Table 1.3 Battery limits investment, off-sites investment, and total fixed cost 14
Table 1.4 Comparison of technologies—Return on investment, fourth quarter 2015 price scenario 16
Table 1.5 Comparison of technologies—Return on investment, first quarter 2014 price scenario 16
Table 2.1 Recovery of NGL by process 22
Table 2.2 Plant technology limits of NGL recovery by type of process 23
Table 3.1 Natural gas feedstock compositions 44
Table 3.2 Capital costs of NGL recovery processes 46
Table 3.3 Values of feedstocks, products, and utilities 47
Table 3.4 Variable costs of C2+ NGL recovery by process for Rich B feed gas—Low crude oil
price case 47
Table 3.5 Variable costs of C3+ NGL recovery by process for Rich B feed gas—Low crude oil
price case 48
Table 3.6 Variable costs of C2+ NGL recovery by process for Rich B feed gas—100 $/barrel
crude oil price case 48
Table 3.7 Variable costs of C3+ NGL recovery by process for Rich B feed gas—100 $/barrel
Table 3.8 Variable costs of C2+ NGL recovery by feed gas using conventional turboexpansion—
Low crude oil price case 49
Table 3.9 Variable costs of C3+ NGL recovery by feed gas using conventional turboexpansion—
Low crude oil price case 50

Table 3.10 Variable costs of C2+ NGL recovery by feed gas using GSP turboexpansion—Low
Table 3.11 Variable costs of C3+ NGL recovery by feed gas using GSP turboexpansion—Low
Table 3.12 Variable costs of C2+ NGL recovery by feed gas using RSV turboexpansion—Low
Table 3.13 Variable costs of C3+ NGL recovery by feed gas using RSV turboexpansion—Low
Table 3.14 Production costs of C2+ NGL recovery by process for Rich B feed gas—Low crude oil
price case 52
Table 3.15 Production costs of C3+ NGL recovery by process for Rich B feed gas—Low crude oil
price case 52
Table 3.16 Production costs of C2+ NGL recovery by process for Rich B feed gas—100 $/barrel
Table 3.17 Production costs of C3+ NGL recovery by process for Rich B feed gas—100 $/barrel
Table 3.18 Production costs of C2+ NGL recovery by feed gas using conventional
turboexpansion—Low crude oil price case 55
Table 3.19 Production costs of C3+ NGL recovery by feed gas using conventional
turboexpansion—Low crude oil price case 55
Table 3.20 Production costs of C2+ NGL recovery by feed gas using GSP turboexpansion—Low
Table 3.21 Production costs of C3+ NGL recovery by feed gas using GSP turboexpansion—Low
Table 3.22 Production costs of C2+ NGL recovery by feed gas using RSV turboexpansion—Low
Table 3.23 Production costs of C3+ NGL recovery by feed gas using RSV turboexpansion—Low
Table 3.24 Capital cost of NGL fractionation process 59
Table 3.25 Variable costs of fractionation of Rich B C2+ NGL—Low crude oil price case 60
Table 3.26 Variable costs of Rich B C3+ NGL fractionation—Low crude oil price case 60
Table 3.27 Variable costs of Rich B C2+ NGL fractionation—100 $/barrel crude oil price case 61
Table 3.28 Variable costs of Rich B C3+ NGL fractionation—100 $/barrel crude oil price case 61
Table 3.29 Variable costs of fractionation of C2+ NGL by conventional turboexpansion—Low
Table 3.30 Variable costs of fractionation of C3+ NGL by conventional turboexpansion—Low
Table 3.31 Variable costs of fractionation of C2+ NGL by GSP turboexpansion—Low crude oil
price case 63
Table 3.32 Variable costs of fractionation of C3+ NGL by GSP turboexpansion—Low crude oil
price case 63
Table 3.33 Variable costs of fractionation of C2+ NGL by RSV turboexpansion—Low crude oil
price case 64
Table 3.34 Variable costs of fractionation of C3+ NGL by RSV turboexpansion—Low crude oil
price case 64
Table 3.35 Production costs of C2+ NGL fractionation for Rich B feed gas—Low crude oil price
case 65
Table 3.36 Production costs of C3+ NGL fractionation for Rich B feed gas—Low crude oil price
case 65
Table 3.37 Production costs of C2+ NGL fractionation for Rich B feed gas—100 $/barrel crude oil
price case 66
Table 3.38 Production costs of C3+ NGL fractionation for Rich B feed gas—100 $/barrel crude oil
price case 66
Table 3.39 Production costs of C2+ NGL fractionation by conventional turboexpansion—Low
Table 3.40 Production costs of C3+ NGL fractionation by conventional turboexpansion—Low

Table 3.41 Production costs of C2+ NGL fractionation by GSP turboexpansion—Low crude oil
price case 68
Table 3.42 Production costs of C3+ NGL fractionation by GSP turboexpansion—Low crude oil
price case 69
Table 3.43 Production costs of C2+ NGL fractionation by RSV turboexpansion—Low crude oil
price case 69
Table 3.44 Production costs of C3+ NGL fractionation by RSV turboexpansion—Low crude oil
price case 70
Table 4.1 Air pollutant emissions, lb per billion Btus 71
Table 4.2 Top 10 countries with technically recoverable shale gas reserves 74
Table 4.3 NGL characteristics of North American shale gas and oil fields 74
Table 4.4 Major importers of US ethane 75
Table 4.5 World NGL demand by region—2015 75
Table 4.6 US NGL demand (ca 2011) 81
Table 4.7 Major reactions of ethylene, products, and derivatives 82
Table 4.8 World LPG end uses 85
Table 4.9 Estimated fractionation plus transportation costs to market hubs (2012) 88
Table 4.10 Ethane transportation fees to Mont Belvieu, Texas hub (2013) 88
Table 4.11 Regional world NGL supply—2015 90
Table 4.12 United States natural gas processing plants 91
Table 4.13 Canadian natural gas processing plants 93
Table 4.14 Capacity of United States fractionation facilities 95
Table 4.15 Capacity of Canadian fractionation facilities 96
Table 4.16 New gas plant construction 98
Table 4.17 New North American NGL fractionator construction 99
Table 6.1 NGLs by conventional turboexpander process 105
Table 6.2 NGLs by gas subcooled (GSP) turboexpander process 107
Table 6.3 NGLs by recycle split vapor (RSV) turboexpander process 109
Table 6.4 NGL separation by generic fractionation process 112
Figures
Figure 1.1 Overview of natural gas and NGL processing 10
Figure 1.2 Comparison of technologies—Capital intensity 14
Figure 1.3 Comparison of technologies—Production costs, ethane recovered 15
Figure 1.4 Comparison of technologies—Production costs, ethane rejected 15
Figure 1.5 Margin for ethane recovery compared with rejection for combined conventional
turboexpander—Fractionation process for feed gases Rich B and Rich C 18
Figure 2.1 General configuration of non-associated natural gas processing 20
Figure 2.2 Acid gas removal processes 21
Figure 2.3 Joule-Thomson process block diagram 25
Figure 2.4 IPORSM process block diagram 27
Figure 2.5 PRICO-NGL® process block diagram 30
Figure 2.6 Conventional turboexpander process block diagram 31
Figure 2.7 Gas subcooled turboexpander process block diagram 32
Figure 2.8 Cold residue recycle process block diagram 33
Figure 2.9 Recycle split vapor process block diagram 34
Figure 2.10 IPSI-1 process block diagram 35
Figure 2.11 IPSI-2 process block diagram 36
Figure 2.12 Generic NGL fractionation process block diagram 40
Figure 3.1 Effect of ethane price on optimal ethane recovery based on gross plant revenue 45
Figure 4.1 NGL supply by region 72
Figure 4.2 Worldwide demand for NGL by region 73
Figure 4.3 World propane supply and demand 77

Figure 4.4 World LPG production by source—2015 78

Figure 4.5 World butane supply 80
Figure 4.6 US petrochemical demand for ethane and propane 83
Figure 4.7 World propane uses—2015 83
Figure 4.8 World LPG demand by use—2015 84
Figure 4.9 World butane uses—2015 86
Figure 4.10 US NGL price history 87
Figure 4.11 Natural gas processing plant capacity number distribution 94
Figure 4.12 Natural gas processing plant location capacity volume distribution 94
Figure 4.13 NGL fractionation plant capacity—Number distribution 97
Figure 4.14 NGL fractionation plant capacity—Volume distribution 97
Figure 5.1 Historical NGL component market prices 100
Figure 5.2 Effect of feed gases on margins for ethane recovery by the conventional
turboexpander combined with the fractionation process 102
Figure 5.3 Effect of turboexpander process type on ethane recovery margins for Rich B feed gas 103
Figure 5.4 Effect of turboexpander process type on ethane rejection margins for Rich B feed gas 103
turboexpander—Fractionation process for feed gases Rich B and Rich C 104

Definitions
Component gross NGL revenue is defined as the actual volume yield of a NGL component times its hub market price.
E/P mix is a blend of ethane and propane, typically quoted in market reports as 80% ethane and 20% propane. Price
is quoted as ethane for the 80% portion and purity propane for the 20% propane portion. E/P mix is only used as steam
cracking feedstock.
Frac spread is a profitability measure defined as the difference between the sales revenue of NGLs (as liquids)
contained in a feed gas and their value if left in the gas (fuel value).
Gallons per million cubic feet (GPM) of NGLs in a gas stream is defined as the gallons of NGLs per 1,000 standard
cubic foot of gas. It is calculated from the gas stream composition of each NGL component.
Mixed product is defined as a product that contains at least two different types of molecules—ethane-propane mix (E/P)
and natural gasoline are examples.
Natural gasoline (C5+) usually contains little hydrocarbon heavier than C10. Natural gasoline is blended in the refinery
with other gasoline components into gasoline. It is also used to make specialty solvents and used as a diluent in
syncrude transportation, a big North American use.
Netback revenue of a NGL processing plant is a measure of plant income defined as the component gross NGL revenue
less transportation fee and less the fractionation fee.
Plant NGL revenue share is defined as the plant NGL netback revenue less the plant processing fee.
Plant total gas stream revenue is defined as the plant NGL revenue share plus producer sales gas revenue.
Purity product is defined as most (at least 90%) of the liquid stream contains one type of molecule—ethane, propane,
isobutene or n-butane are common examples [37].
Glossary
B/D Barrel/day
BLI Battery limits investment
BTU, Btu British thermal units
CAGR Compound annual growth rate
CRR Cold residue recycle process
GPM Gallons per million square feet (Mcf)
GSP Gas subcooled turboexpander process
hr Hour
kWh Kilowatt hour
lb Pound
LPG Liquefied petroleum gas
LTS Low-temperature separator
LV Liquid volume
MM Million
MMT Million metric ton
MT Metric ton
NGL Natural gas liquids
NORM Naturally occurring radioactive materials
PEP Process Economics Program
PSA Pressure swing adsorption
psig Pounds per square inch gauge
ROI Return on investment
RSV Recycle split vapor turboexpander process
scf Standard cubic feet
scfd Standard cubic feet per day
tcf Trillion cubic feet
TFC Total fixed cost
yr Year

1 Executive summary
Introduction
The natural gas industry has four segments—production and gathering, processing (treating, extraction, and
fractionation), long distance transportation, and storage and distribution. Treating plants and natural gas
liquids (NGLs) extraction plants are generally located near the gas production area (sometimes referred to
as field plants). The fractionation plant may be at the same site as the extraction plant or it may be remote.
Fractionators may process liquids gathered from several extraction plants.
While the NGL industry in the United States has been characterized as mature, it is changing.
The revolutionary development of shale oil and gas by horizontal drilling and hydraulic fracturing
(fracking) is transforming the natural gas, petroleum, and petrochemical industries. This relatively new,
highly cost-effective technology has already impacted gas and oil production and global pricing
mechanisms. Initially developed and implemented in the United States, the technology is also impacting
capital investment decisions in Europe and Asia. Separation of the significant quantities of NGLs
accompanying the tight gas and oil production is often required to meet natural gas pipeline specifications
and to provide additional revenue.
NGLs are extracted from natural gas for two main reasons—recovering valuable liquids (discretionary
removal) or reduction of dew point of the gas in order to meet natural gas pipeline specifications (sometimes
called mandatory removal). Pipelines place restrictions on the amount of liquid the gas can contain to
prevent dangerous condensation, accumulation, and slugging of liquids in the gas transmission lines. The
amount of liquids extracted for discretionary recovery will be greater than for dew point control. The extent
of ethane recovery will depend upon the gas composition, demand, and the particular economics of the
plant.
Natural gas liquids is the general term for the C2+ hydrocarbons that are vapors in produced natural gas at
the surface and then liquefied and recovered from natural gas. NGL components are ethane, propane,
isobutane and n-butane, and C5+ natural gasoline (primarily isopentane and normal pentane, the hexanes
and heptanes). Heavier hydrocarbons generally flow from the well as liquid called condensate.
Most gas plants produce a mixed NGL C2+ or C3+ product called “Y grade” that is shipped to a central
fractionation facility rather than fractionated to individual products on-site. Fractionators can produce
ethane, ethane-propane mixtures, propane, mixed butanes, n-butane, isobutene, and C5+ natural gasoline.
Off-site fractionators can process Y grade produced at multiple gas plants. Some plants fractionate only
seasonally. Dedicated pipelines continuously supply fractionation facilities and storage hubs [7].
NGLs are used as residential, commercial, and motor fuel and as petrochemical and petroleum refining
feedstocks. Liquefied petroleum gas (LPG)—predominately propane or butane either separately or in
mixtures—is a globally well-known fuel. Cracking NGLs to ethylene and propylene is the largest chemical
consumption. Refineries catalytically react isobutane with butylenes to form alkylate, a high-octane
gasoline blending component. Environmentally driven growing demand for natural gas for electricity and
industrial fuel, growing demand for ethane and propane for cracking to light olefins, and increasing
consumption of alkylate in reformulated motor gasolines are fueling the supply and demand for NGLs.
Worldwide demand for NGLs totaled 410.0 million metric tons (MMT) in 2015, about 93.6% of the 438.1
MMT of available supply. Global NGL growth rate has exceeded growth in total petroleum demand (about
1.6%/yr). NGL demand grew an average of 3.43%/yr over the period from 2010 to 2015 from 363.7 MMT
in 2010. Regional demand grew over this period at least 4.5%/yr in the Middle East, Southeast Asia, the
Far East, and the Indian subcontinent. Global demand in 2015 for ethane, propane, butanes, and LPG,

respectively, totaled 65.0 MMT, 156.5 MMT, 129.6 MMT, and 286.1 MMT. Most NGLs are consumed
within the producing region, but about 25% of global supply is surplus within the producing region.
Worldwide supply of NGLs totaled 438.1 MMT in 2015. Growth in NGL production averaged 3.79%/yr
from 2010 to 2015. The largest producing regions in 2015 were North America (30.8% of global supply)
followed closely by the Middle East (29.7%). These two regions accounted for 87.9% of regional surplus
NGL supply (approximately the amount available for export). The remaining surplus NGL was produced
in the Commonwealth of Independent States (6.2%) and Africa (5.9%). The largest regional deficits in
NGLs supply are Europe (50.7% of local demand in 2015 or 36.8% of total global deficits) and the Far East
(44.3% of local demand or 37.4% of global deficits). These are the largest net importers of NGLs.
Processes and economics for treating natural gas to remove acid gases were discussed in PEP Report 216,
Acid Gas Treatment and Sulfur Recovery (1997). Mercury removal was discussed in PEP Review 91-1-4,
Removal of Mercury from Ethylene Plant Feedstock and Cracked Gas Streams (1992). Treating processes
were briefly reviewed in PEP Report 135A, Natural Gas Liquids (2001), but the major emphasis of that
report was processes for extracting and recovering a NGLs mixture (sometimes called “Y grade” or “raw
make”). Report 135A presented the process economics of two of the then most widely used types of
processes—cryogenic turboexpansion, the leading process, and the older refrigerated absorption process
that ranked second in the United States and third worldwide in the production of NGLs. Economics for a
generic NGL fractionation plant that produced ethane, propane, isobutane, n-butane, and C5+ natural
gasoline were also presented in PEP Report 135A.
This process summary primarily summarizes the economics and technology of NGL recovery from natural
gas. Economics of three turboexpander processes are determined for four feedstocks varying in
composition, both with and without ethane rejection, and for two price scenarios—current and before the
drop in crude oil below 100 $/barrel. Turboexpander processes have been the most frequently employed,
especially for large-capacity plants. The processes covered, listed in general order of increasing ethane
recovery potential, are:
• Conventional turboexpander process
• Simplified gas subcooled turboexpander process
• Simplified recycle split vapor turboexpander process
The economics are also presented for a generic NGL fractionation process used to determine the product
value of the mixed NGL product of the gas separation processes.
Process overview
Natural gas flowing from the well (wellhead gas) contains hydrocarbons from methane to alkanes boiling
in the gasoline range, generally water, and may also contain significant amounts of hydrogen sulfide (H2S),
carbon dioxide (CO2), and nitrogen (N2). Overall, removal of nonhydrocarbon gases (mainly N2, CO2, H2S,
and helium) reduce gross production volume by about 2.5%. Gas plant removal of NGLs reduced gas
volume by about 3.4%. Some gases also contain impurities such as mercury, arsenic, or radon. To meet
natural gas specifications, raw natural gas usually requires processing such as treating to remove acid gases
(H2S and CO2), and may also require removing some NGLs and/or nitrogen. Figure 1.1 is a block diagram
of one overall process sequence.

Figure 1.1 Overview of natural gas and NGL processing
Combined wet wellhead gas
Field Operations
Liquids and solids removal
Compression (if required)
Acid Gas Removal
Dehydration
Compression
Gas Treating Plant

Water, liquid hydrocarbon
And solids removal
Compression
CO2
H2S + CO2
Acid Gas Treater Sulfur Recovery Unit
Elemental
Sulfur
Products
Ethane
NGL Recovery Plant Mixed NGLs Propane
Fractionation
Dehydration Isobutane
Plant
NGL Separation N-Butane
Natural Gasoline
N2
N2 Rejection Unit N2 Helium
Compression Recovery Crude
Helium
Liquefaction Plant LNG Product
Sales Gas Product
Source: [7] © 2016 IHS
Technology
Processes
Over the long history of NGL recovery from natural gas, seven basic types of processes have been
commercialized, along with a number of variations. In our review of the processes, we emphasize the major
types of processes currently employed (i.e., Joule-Thomson, refrigeration, and turboexpansion). We then
evaluate the economics of three turboexpansion processes:
• Conventional turboexpander process (conventional)
• Simplified gas subcooled turboexpander process (GSP)
• Simplified recycle split vapor turboexpander process (RSV)
We also discuss and determine the economics of a generic NGL fractionation process we use to price the
gas plant mixed NGL products.
NGL recovery
Joule-Thomson processes are the simplest NGL recovery processes both in design and operation. In some
applications, no rotating equipment is required. To provide cold temperature needed for separation, natural
gas feed is isentropically expanded as it flows through a valve or orifice to a lower pressure. The process
can obtain adequate recoveries at low capital costs. Energy efficiency is low. The available pressure drop
and the composition of the feed gas limit the residual gas (sales gas) hydrocarbon content. Joule-Thomson
units are usually of small capacity or combined with another type of process. Simple versions are employed
in gas field locations to remove some NGLs from very rich, high NGL content gases to allow pipelining to
a gas plant. The units can be designed for remote, automated operation.
Refrigeration processes were the next processes developed for separating NGL from natural gas. The
cascade refrigeration process was commercialized in 1950. The basic process consists of chilling, vapor-
liquid separation, demethanization, and heat recovery. The process then evolved over a number of years of
commercial experience into many variations. The process can obtain high ethane recovery. However, after
commercialization in 1962–63, the turboexpander process rapidly replaced refrigeration processes for most
new construction. The main advantage of the cascade refrigeration process is flexibility—flexibility in feed
rate and flexibility to achieve different degrees of liquid recovery through only varying operating
conditions.
Recently however, a new refrigeration-based process has been developed and offered for license since 2011
by Randall Gas Technologies, a division of Lummus Technology, a CB&I company. The IPORSM (Iso-
Pressure Open Refrigeration) process is a versatile cryogenic process offering advantages over conventional
processes especially for C3+ NGL recovery. Feed gas may be rich or rather lean. High recovery can be
achieved; propane recovery over 99% is typical. Ethane may be designed to be recovered. One version
handles gas feed with excess nitrogen. The process features open-loop refrigeration combined with propane
refrigeration to obtain cryogenic temperatures. The low pressure drop across the natural gas flow route
allows omitting or at least reducing gas compression power usage, especially in applications providing
sufficiently high feed gas supply pressure. Major equipment is about 20% less than in conventional
turboexpansion.
Turboexpansion processes are the most common processes in modern, large-capacity gas processing plants.
The process is more reliable than the old refrigeration processes and less complex than enhanced absorption
processes it replaced starting with its commercialization in the 1960s. Since then, a number of variations
have been commercialized that overcome limitations in operational flexibility and overall recovery
efficiency. Cooled feed gas is cooled to cryogenic temperature as it expands in a turbine. The process
produces lower temperatures and is more efficient than Joule-Thomson processes or most refrigeration
processes, as the work of gas expansion is usually utilized to drive a booster compressor, reducing
compression cost. Lower temperature increases ethane and propane recoveries. Relative recoveries of these
three types of separation processes are listed in the table below.
Table 1.1 Three types of separation processes

Ethane Propane Butanes C5+ natural gasoline
Cascade refrigeration 70% 85% 95% 100%

Joule-Thomson expansion (enhanced) 70 90 97 100
Turboexpansion 90 98 100 100
Source: [112] © 2016 IHS
The conventional turboexpander process features precooling of the feed gas followed by a low-temperature
separator (LTS) from which vapor flows through the turboexpander, where it is cooled to a cryogenic
temperature, and sent into a demethanizer fractionation column. Depending upon the mode of operation,
C2+ heavier or C3+ heavier hydrocarbons condense as they flow down the column, while mostly methane

flows upward aided by vapor from a reboiler heated by feed gas. Liquid from the LTS is vaporized and
cooled as it flows through a Joule-Thomson valve and into the demethanizer. Mostly methane leaves the
top of the column and is warmed by heat exchange with feed gas before compression to pipeline pressure
by a compressor driven by the turboexpander and a residue gas compressor. The NGL product leaves the
bottom of the demethanizer.
The gas subcooled process (GSP) adds reflux to the conventional processes’ demethanizer to improve
ethane and propane recovery. The cold reflux is produced by condensing and subcooling a portion of the
vapor from the LTS. The subcooled liquid is expanded; the now liquid-vapor stream is charged as reflux to
the top of the demethanizer. Demethanizer overhead gas cools the subcooler exchanger.
In the recycle split vapor (RSV) process, GSP is modified by adding more reflux flow to the demethanizer.
Then the sales gas product is cooled in an added air cooler. A portion of the cooled sales gas is recycled
through the subcooler, where it is condensed separately from the vapor stream from the LTS. The recycle
stream is cooled to a lower cryogenic temperature by Joule-Thomson expansion and charged to the top of
the demethanizer as reflux. The reflux stream from the LTS is now charged lower in the upper section of
the column.
NGL fractionation
In the development of our process economics, we use a common, generic NGL fractionation process to
estimate the value of the mixed (Y grade) NGL product produced by the turboexpansion gas separation
processes. Historically, the common commercial fractionation process is basically a series of four
distillation columns. Ethane, propane, and butanes are removed overhead in the order of increasing boiling
point in the first three columns; natural gasoline is the bottoms product from the third (debutanizer) column.
The butanes are then separated into isobutane and n-butane products in the butane splitter column.
Licensors
Each NGL recovery plant presents a unique situation in terms of the gas composition processed and its
market’s product requirements. There are over 20 processes available for license or in the public domain
for the recovery of ethane, and over 25 for the extraction of propane [51; 52]. Table 1.1 lists some of the
commercial processes offered for license. More are being developed. Some processes are efficient under
some circumstances but are very uneconomical under other conditions. How to compare cryogenic process
design alternatives for a new NGL recovery plant is discussed by Lynch et al. [53].

Table 1.2 Selected commercial NGL recovery processes

Licensor Process Process type/application
Advanced Extraction Technologies Inc. AET Process® NGL recovery unit Refrigerated absorption/C2+ or C3+ NGLs
AET Process® LPG recovery unit Mixed refrigeration/ C2+ or C3+ NGLs
Black & Veatch Corp. PRICO-C2™ Mixed refrigeration/C2+ NGL
LPG-PLUS™ Absorption—turboexpansion/C3+
Pro-Max™ Refrigerated absorption/LPG
Costain Energy & Process NGL recovery Turboexpansion/C2+ or C3+ NGL
Fluor Fluor® CryoGasSM TCHAP Absorption—turboexpansion/NGL
(two-column high-pressure absorption process)
IPSI LLC (Bechtel) Enhanced NGL recovery process Turboexpansion/NGL
Improved propane recovery (IPR) process Turboexpansion/C3+
Split feed compression (SFC) process Turboexpansion/NGL
Lean reflux process (LRP) for high ethane recovery Turboexpansion/C2+
Ortloff Engineers, Ltd.a Single-column overhead eecycle process (SCORE) Turboexpansion/C3+
Gas subcooled process (GSP) Turboexpansion/C2+
Recycle split vapor process (RSV) Turboexpansion/C2+
Randall Gas Technologies (Lummus) High-pressure absorber (HPASM) Turboexpansion/LPG or C2+ NGL
Iso pressure open refrigeration (IPORSM) process Refrigeration and mixed refrigeration/
C2+ or C3+ NGL
NGL-MAXSM Turboexpansion/C2+ NGL
NGL-PROSM Turboexpansion/C2+ NGL or LPG
Super Hy-ProSM STC Turboexpansion/mainly LPG
Super Hy-ProSM TTC Absorption/C3
NGL-FLEXSM With ethane, propane as refrigerants
LPG-MAXSM Turboexpansion/C3
Shell Global Solutions B.V. Shell absorber extraction scheme (SHAE) Turboexpansion/ethane and LPG
Shell deep LPG recovery scheme (SHDL) Turboexpansion/LPG
Technip CRYOMAX®DCP (dual-column propane recovery) Turboexpansion/C3+ NGL
CRYOMAX® Flex-e Turboexpansion/ethane and C3+ NGL
CRYOMAX® MRE (multiple reflux ethane recovery) Turboexpansion/C2+ NGL
CRYOMAX® DRE (dual reflux ethane) Turboexpansion/C2+
Twister, B.V.a TwisterTM Supersonic expansion/C3+
a Licensed through UOP
Source: [56–74] © 2016 IHS
Comparison of process economics
A comparison of the total fixed capital investment cost for the conventional, GSP, and RSV turboexpander
processes is shown in Figure 1.2 as a function of feed gas. A molecular sieve feed drier system is included
in each design. All cases are based on the same feed gas capacity—100 million scfd—but the NGL
production varies with feed gas composition. Rich feed gases A, B, and C, respectively, contain 11.76, 9.03,
and 8.00 mol% ethane and heavier NGLs; the Lean gas contains 2.96 mol%. The detailed composition of
Rich A, B, C and Lean Gas is shown in Table 3.1. All four gas feedstocks meet the sales gas specification
of gross heating value of 950–1,150 Btu/scf of gas. Rich A represents a gas with high ethane and also high
total NGL; Rich B represents a gas with intermediate ethane and total NGL; while Rich C represents a gas
with intermediate ethane and high natural gasoline (C5+). Lean gas is a typical dry gas with overall low
NGL.
Each plant is designed so it can switch between recovering ethane or rejecting ethane (i.e., high temperature
as well as cryogenic reboilers and modular hot oil systems are included). The plant designs are not
optimized, but the major equipment is sized to allow flexibility to process on a blocked out basis the three
rich feed gases. The volume of NGL recovered from the lean gas is less the 20% of the volume of the NGL

from the rich gases, and in reality would not be processed to separate out NGL. It is included here for
comparison only. The capital intensity is fairly constant with the rich gases. The capital intensity is
extremely high for the Lean gas since it produces little NGL. Capital intensity is higher when based on
NGL produced when rejecting ethane, again since less NGL is produced than when ethane is recovered.
Figure 1.2 Comparison of technologies—Capital intensity
Ethane Recovery, C2+ NGL Ethane Rejection, C3+ NGL
1.400
1.200
1.000
US$/lb NGL/yr
0.800
0.600
0.400
0.200
0.000
Conventional GSP RSV
Rich A Rich B Rich C Lean . Rich A Rich B Rich C Lean . Rich A Rich B Rich C Lean
Source: IHS © 2016 IHS
The battery limits investment (BLI), off-sites investment, and total fixed cost (TFC) are within a range of
about 10% from the least to the highest investment, as shown in Table 1.3.
Table 1.3 Battery limits investment, off-sites investment, and total fixed cost
Process BLI, MM $ Off-sites, MM $ TFC, MM $
Conventional 28.3 12.4 40.7
GSP 29.0 13.6 42.5
RSV 31.1 14.3 45.4
The capital investment increases with increasing process complexity (conventional < GSP < RSV).
The production costs of the processes at 15% before tax return on investment (ROI) are compared using
fourth quarter 2015 market prices in Figures 1.3 and 1.4, respectively, for ethane recovery and for ethane
rejection. Gas plant feed cost is based on the shrinkage of the natural gas from the inlet to the outlet of the
plant determined by loss of gas volume and reduction in the gross heat content. The market value of the
NGLs is the feedstock value required for the fractionator plant to earn a 15% ROI. The lean feed gas incurs
extremely high costs in all cases since so little NGL is produced. However, with these prices at a time of a
low crude oil price of 42 $/barrel, none of the processes provides a gas plant a 15% ROI for any of these
feedstocks whether rejecting or recovering ethane. The GSP plant processing Rich C feed gas does show a
3.4% ROI when ethane is rejected (Table 1.4). Negative ROI indicates a loss due to production cost being
greater than the market value of the NGL produced. By rejecting ethane the plant looses less money per
year than by recovering ethane in this scenario.

Figure 1.3 Comparison of technologies—Production costs, ethane recovered
30.00
25.00
Production costs, ¢/lb NGL
20.00
Product Value, ₵/lb C2+ NGLs
Net Production Cost
15.00
Plant Gate Costs
Plant Cash Costs
10.00
Total Direct Costs
5.00 Variable Costs
0.00
Rich Rich Rich Lean . Rich Rich Rich Lean . Rich Rich Rich Lean
A B C A B C A B C
Figure 1.4 Comparison of technologies—Production costs, ethane rejected
70.00
60.00
Production costs, ¢/lb NGL
50.00
Product Value, ₵/lb C3+ NGLs

40.00
Net Production Costs
Plant Gate Costs
30.00
Plant Cash Costs
20.00 Total Direct Costs

Variable Costs
10.00
0.00
Rich Rich Rich Lean . Rich Rich Rich Lean . Rich Rich Rich Lean
A B C A B C A B C

Table 1.4 Comparison of technologies—Return on investment, fourth quarter 2015 price scenario
Feed gas Rich A Rich B Rich C Lean
Ethane recovered
Conventional -21 -14.5 -1.85 -26
GSP --- -13.3 -3.80 -25
RSV -23 -13.7 -3.22 -26
Ethane rejection
Conventional -21 -14.5 -1.85 -26
GSP -13.0 -9.2 +3.42 -24
RSV -10.0 -9.9 -1.84 -24
However, when evaluated at feed, utilities, and product prices occurring when crude oil is priced at 100
$/barrel as in first quarter 2014, all three processes become profitable processing the three rich feed gases
(Table 1.5). The lean feed gas, which already meets sales gas specifications, remains unprofitable due to its
low NGL content and would not be processed. The higher variable costs and product value obtained at the
high crude oil price reduce the fixed costs’ percentage of the overall cost. The ROIs for the rich feed gases
vary relatively little between the processes, the effect of feed gas composition being very significant. The
Rich C feed gas, which contains the most natural gasoline, is the most profitable. Natural gasoline is the
highest valued fractionator product per pound.
Table 1.5 Comparison of technologies—Return on investment, first quarter 2014 price scenario
Ethane recovered
Conventional 17.6 43.2 74 -23
GSP --- 45.5 69 -15.8
RSV 11.9 41.0 66.4 -17.0
Ethane rejection
Conventional 41.6 43.3 75 -13.2
GSP 41.0 50.8 78 -11.9
RSV 48.5 47.9 69 -13.5
Conclusion
The capital costs of the three turboexpander processes are fairly close together, varying by about 10% (well
within our target accuracy of ±25%). This may partially be due to choosing the largest of the major
equipment in order to be capable of processing either of the rich feedstsocks. The BLI, off-sites, and TFC
between processes increased with process complexity. The conventional process requires the lowest
investment, the RSV process the highest investment costing about $4.7 million more in TFC than the
conventional process. However, the GSP and RSV processes are more efficient than the conventional
process.
Net production cost when recovering ethane calculated with 15% before tax ROI was lowest for the GSP-
Rich C combination of feed gas and process. The lowest net production cost is 9.18 ¢/lb of C2+ NGL
compared with 9.35 ¢/lb with the RSV process and 9.97 ¢/lb with the conventional process, all processing
Rich C feed gas. On the same basis when rejecting ethane, GSP again has the lowest production cost, 11.67
¢/lb, processing Rich C feed gas. Production costs for other process-feed gas combinations depend upon
the interaction of feed gas and process. Production costs are higher in each case for ethane rejection, largely
since utilities costs are higher. When evaluated using the 100 $/barrel crude oil price set, the GSP-Rich C
combination has the lowest production cost.

Based on fractionator feedstock values required to achieve a 15% ROI for the fractionator plant, under low
crude oil, fourth quarter 2015 prices, none of the process-feed gas combinations is profitable. However, the
combination of GSP with Rich C feed gas in the ethane rejection mode did show a positive ROI of 3.4%/yr.
Processing Rich C feed gas, which contains a higher percentage of high value natural gasoline than the
other feed gases, was the most profitable of the feedstocks for all three processes whether in ethane rejection
or recovery mode and whether the price set was based on 42 $/barrel or 100 $/barrel crude oil.
All processes and rich feed gas combinations are profitable using the 100 $/barrel price set. When
recovering ethane, ROIs ranged from 11.9%/yr for the RSV-Rich A combination to 41–45%/yr for all Rich
B regardless of process to over 66% for all Rich C cases. When rejecting ethane, the ROI increased to 41–
48%/yr when processing Rich A feed gas. The ROIs obtained with Rich B and Rich C feed gases increased
some compared with the ethane rejection mode to 43–51%/yr for Rich B and over 69% for Rich C feed gas.
Historical economics comparison—An iPEPSpectra™ analysis
In the conclusions, we show that the ROI of NGL separation with ethane recovery or rejection is very high
under the high oil price period but very low under the low oil period. Since oil and NGL prices fluctuate
widely overtime as shown in Figure 1.5, we develop an iPEP TM Spectra data module to examine how the
margin of NGL separation and fractionation changes as NGL market prices fluctuate overtime, from first
quarter 2000 to third quarter 2016 quarterly. During the period, the energy and chemical industries
experienced two major oil and NGL price cycles.
The iPEP Spectra data module is an interactive file written in Excel pivot table. Pivot tables are dynamic
and flexible, which allows our clients to compare process economics by selecting competing processes
and/or feed compositions. A user can also choose to compare production economics at various levels, such
as cash cost, net production cost, margin, etc. One can also compare the process economics in three main
NGL production regions—United States, Canada, and Saudi Arabia. The iPEP Spectra file is available on
our website together with the PDF file of this process summary.
In Section 5, we present several different ways of comparing NGL separation and fractionation economics
using iPEP Spectra analysis to show the effect of technology selection and wet gas composition. We find
that the selection of turboexpander technology makes only very slight difference in overall economics. The
most revealing analysis is when we compared the performance of ethane recovery versus ethane rejection
by the conventional turboexpander process combined with fractionation as shown in Figure 1.5 for feed
gases Rich B and Rich C. The dominating factor on margin is the fluctuation of NGL prices, which overall
tend to follow oil prices. Feed gas Rich C—which has high natural gasoline contents—consistently
outperformed feed gas Rich B, which has slightly higher ethane contents but significantly lower natural
gasoline, indicating that natural gasoline—the highest value NGL component—has the strong effect on
margin.
For either feed gas, the difference in margin between ethane recovery or rejection is generally small. During
periods when ethane recovery has the larger margin than ethane rejection, recovery is more profitable for
both Rich B and Rich C feed gases. Generally, margins are seen to be highest from second quarter 2006
through third quarter 2014 (except at the height of the recession, when the margin for all cases is negative).
Since about first quarter 2012, ethane rejection processing either Rich B or C feed gas has been more
profitable than recovery.
The implication is that in the current environment of low oil and NGL prices, there is little incentive for the
operators of NGL separation plants to recovery more ethane. As several large ethane steam crackers are
expected come on stream in the next two years, higher demand of ethane itself is not enough incentive for
more ethane recovery. Higher ethane price is required.

turboexpander—Fractionation process for feed gases Rich B and Rich C
2,500
PROPANE - FRACTIONATED NGL

2,000 BY CONVENTIONAL
TURBOEXPANDER WITH ETHANE
RECOVERY RICH B FEED - USGC
1,500 PROPANE - FRACTIONATED NGL

BY CONVENTIONAL
Margin ($/t)
RECOVERY RICH C FEED - USGC

1000.0
BY CONVENTIONAL
500.0 REJECTION RICH B FEED - USGC
BY CONVENTIONAL
0.00 TURBOEXPANDER WITH ETHANE
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 REJECTION RICH C FEED - USGC
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-500.00

2 NGL processes
Introduction
This section first reviews natural gas processing of raw natural gas from the well to provide the feed gas
for the NGL separation plant. Wellhead natural gas is first treated to remove water and liquid hydrocarbons.
The raw gas from multiple wells is collected and piped to a gas treating plant, where H2S is removed along
with some CO2 depending upon the gas composition and treating process. The gas is then dehydrated. When
necessary, nitrogen may be reduced and contaminants such as mercury removed.
A discussion of NGL processing of raw natural gas with ethane recovery or without (ethane rejection) from
the feed gas precedes a review of NGL recovery processes. Fractionation of mixed NGL product of the
recovery plant is then briefly discussed.
Natural gas processing
At the wellhead, raw natural gas varies greatly in contaminants and NGL component content. However,
most raw natural gas contains some containments that must be removed and NGLs that may need to be
reduced in order to meet pipeline specifications for natural gas. Raw natural gas is first treated to remove
most contaminants such as H2S, CO2, and water to meet pipeline specifications and to protect the NGL
recovery plant. Some of the valuable NGL is often extracted and recovered in order to produce saleable
natural gas (sales gas) that meets pipeline heating value and dew point specifications.
The NGL extraction plant produces a mixed NGL product (Y grade). The mixed NGL from several plants
may be piped off-site to a fractionation plant that separates the mixture into purer products such as ethane,
propane, iso- and n-butanes, and C5+ liquids for use as fuel or petrochemical feedstocks. The C3 and heavier
products may require sweetening to convert mercaptans to disulfides.
Several types of NGL extraction and recovery processes have been commercialized—refrigeration,
cryogenic expansion, absorption, refrigerated absorption, compression, and adsorption. Refrigeration is the
most common for smaller plants. The currently most common process based on capacity and for new plants
is cryogenic expansion using a turboexpander.
Natural gas treating
Raw natural gas (wellhead gas) from wells in a field is collected (gathered) and processed first locally in
the field to remove water and hydrocarbon condensate (Figure 2.1). The water is disposed as wastewater.
The condensate is usually transported to an oil refinery. The raw gas is then pipelined to a gas treating plant
for initial removal of acid gases, mainly hydrogen sulfide (H2S) and carbon dioxide (CO2). Commercially,
solvent absorption processes are most frequently used, usually by an amine solvent.

Figure 2.1 General configuration of non-associated natural gas processing
Off gas to
Incinerator
Tail
Acid Gas Gas Tail Gas
Sulfur Unit
Treating
Field Raw Gas

Pipeline Elemental
Condensate Acid Gas
Raw Well Gas Sulfur
& Water Removal
Removal
Condensate to
Oil Refinery
Mercury
Dehydration
Removal
Sales Gas Product

Products
Ethane
Mixed
Nitrogen NGL Fractionation Sweetening Propane
NGL Recovery
Rejection Unit Units Butanes
Natural Gasoline
Hydrogen sulfide must be removed not only because it is highly toxic, but also because in the presence of
water it forms a corrosive acid. Carbon dioxide must be controlled because it is nonflammable, undesired
for a fuel, and also forms a corrosive acid in the presence of water. Furthermore, carbon dioxide can solidify
during cryogenic processing. Since the content of the acid gases in raw natural gases vary greatly and the
allowable acid gas level in the product specifications also vary, no one process is superior for all treating
applications. Many processes have been commercialized (Figure 2.2). The economics of acid gas treating
with amines are determined in PEP Report 216, Acid Gas Treatment and Sulfur Recovery (1997) and PEP
Review 2015-01, Acid Gas Removal from Natural Gas (2015).

Figure 2.2 Acid gas removal processes
Acid gas removal processes
Solvent Absorption
Physical Solvents Chemical Solvents Hybrid Solvents Solid Adsorption Membranes Cryogenic Direct Conversion
Fractaionation
Rectisol Amines Alkali Salts Sulfinol-D/X Iron Sponge Poly Sulfone LO-CAT
Ryan-holmes
Selexol MEA Flexorb Amisol Zinc Oxide Cellulose Acetate Stretford
Ifpexol MDEA Catacarb Molecular Sieve Ploy Amide CrystaSulf
Sepasolv MPE DGA Benfield
Purisol DIPA
Propylene UCARSOL
Carbonate
Amine Mixtures
(Adip-x, aMDEA etc.)
Source: IHS [PEP Review 2015-01] © 2016 IHS
Following acid gas treating, the treated natural gas is dehydrated. The glycol dehydration process is
commonly used. Water is regenerably absorbed into liquid triethylene glycol (TEG). Alternatively, pressure
swing adsorption regenerably adsorbs water on a solid adsorbent, commonly a molecular sieve. Membrane
processes may be used.
Mercury is removed by adsorption on activated carbon or regenerable molecular sieves. Mercury removal
is necessary not only for the environment but also to protect the metallurgy of the pipeline and downstream
process equipment from mercury amalgamation and embrillement of aluminum or other metals.
When the nitrogen content of the gas is too high and cannot be blended down, nitrogen is rejected in a
separate plant, which may be downsteam of a NGL recovery plant. The most common processes for
nitrogen removal are cryogenic distillation, pressure swing adsorption and membrane separation. Cryogenic
separation is most economic with high feed rates of high nitrogen content gas. Pressure swing adsorption
(PSA) and membrane separation are most feasible at low gas volumes [7].
Some natural gas contains significant helium concentration (0.3% up to 7%) thay may be recovered. The
gas is now ready for NGL recovery.
Natural gas separation
Natural gas liquids recovery processes can be characterized as seven basic process types:
1. Absorption
2. Refrigerated absorption
3. Refrigeration
4. Compression
5. Adsorption
6. Cryogenic Joule-Thomson

7. Cryogenic expander (turboexpansion) [86]
Plants having combinations of the seven process types are also found, sometimes four or occasionally more
were reported. Multiple processes could be a result of revamping plants, adding additional units of a
different type at the same location. Membrane processes are a candidate for the eighth process type.
The most common types of NGL recovery processes in use today are to recover a mixed C2+ or C3+ NGL
product along with the on-specification sales gas product:
• Absorption of hydrocarbons into lean oil or special solvent
• Refrigeration
• Cryogenic turboexpander processes are used in most modern, large gas processing plants
Important factors in the selection of gas processes are capital cost, operating cost, process efficiency and
environmental and safety regulations. The condition and composition of the feed gas, utility costs, product
specifications and relative product values are factors in selecting an optimal process. Flexibility to process
a range of feed compositions is important in the process selection since variation in composition
significantly impacts the process economics [1].
The relative recoveries of the seven types of processes are summarized in Table 2.1. Recovery increases
with increasing carbon number. The newest processes have the highest recoveries.
Table 2.1 Recovery of NGL by process

C2 C3 C4s C5+
Absorption 5 40 75 87
Refrigeration-absorption 15 75 90 95
Refrigeration 25 55 93 97
Cascaded refrigeration 70 85 95 100
Joule-Thomson expansion 70 90 97 100
Turboexpansion 90 98 100 100
Enhanced absorption
C2+ recovery 97 98 100 96
C3+ recovery <2 98 100 96
Source: [112] © 2016 IHS
The mixed NGL product can be further processed by fractionation either at an adjacent plant or be
transported to a fractionation plant near a refinery or chemical plant. For economic reasons, currently most
cryogenic NGL recovery plants do not have on-site fractionation.
The volume of NGL potentially recoverable by a plant depends upon the volume of available natural gas
feed, its NGL content and the amount of inerts (CO2, N2, He, etc.) contained in the gas. In order to meet the
sales gas heat content specification, sufficient NGL is left in the sales gas to compensate for the inerts,
which have zero heating value. The actual volume of NGL extracted depends upon the type of recovery
process (Table 2.2), the NGL gate price, ethane recovery economics and processing contract terms. The
cryogenic turboexpander process is the most efficient but also the most expensive process.

Table 2.2 Plant technology limits of NGL recovery by type of process

Type of process NGL % Recovery
Lean oil adsorption Ethane 15–30
Propane 65–75
Butanes + heavier 99
Propane refrigeration Ethane Up to 80–90
Propane + heavier 100
Cryogenic turboexpander Ethane Up to 85–90
Propane + heavier 100
Source: [37] © 2016 IHS
Ethane recovery
Expansion cooling or external refrigeration using propane refrigeration can produce lower temperatures
down to a limit of approximately -35°F (-37°C). Ethane recovery from these processes is less than 60%
unless the feed gas has a very high liquid GPM (gallons liquid per 1,000 scf) content. To achieve ethane
recoveries of 80–90%, lower temperatures are required than can be provided by expansion cooling or
propane refrigeration. The necessary lower temperatures can be provided by cascade propane refrigeration
with ethane or ethylene refrigerant or mixed refrigerants (mixtures of methane, ethane and propane).
However, these direct refrigeration processes are primarily attractive for feed gases supplied at low inlet
pressures. Low-pressure feed gas requires substantial compression of the gas or of the refrigerant gas or
both [7].
Ethane recovery also varies with the process configuration and the inert content of the feed gas. The
presence of nonhydrocarbons may require ethane to be left in the sales gas in order to meet the heating
value specification. Ethane recovery affects the recovery of propane and butanes, their recovery increasing
with increasing ethane recovery. For example, at 60% ethane recovery, propane recovery is about 93% and
butanes recovery is about 99%. At 80% ethane recovery, propane recovery increases to about 97% with
butanes recovery over 99% [7].
Depending upon the gas composition and desired ethane recovery, the early turboexpander processes
produced separator temperatures between 0ºF and -30ºF (-20ºC to -35ºC) and demethanizer overhead
temperatures between -110ºF and -170ºF (-80ºC to -110ºC). The maximum ethane recovery of early
turboexpander processes was approximately 80%. Limitations to the maximum recovery of ethane with
turboexpander processes include:
• Unstable operation due to operation near the mixture’s critical temperature and pressure
• Possible carbon dioxide solidification
• Significantly more compression required for increased ethane recovery [7]
Ethane rejection
As shown in the marketing section, natural gas and NGL prices can show large variability as the market
environment changes. At times, ethane is more valuable as chemical feedstock than as fuel. On the basis of
heating value, the price of ethane was close (about 90–100% parity) to more valuable propane for 2006
through 2009. Coming out of the recession in 2010, the price of ethane dropped to about 60–82% of the
price of propane. In 2013, ethane had no premium over natural gas. During the third quarter of 2015, the
US Gulf Coast prices of ethane and ethane-propane mixtures were too low to allow profitable full ethane
recovery. During the quarter, an estimated average of 600,000 B/D of ethane was rejected, reducing the
annual growth in NGL production. If all gas plants had fully recovered ethane, US NGL production in the

second half of 2015 would have been an estimated 3.95–4.0 million B/D instead of about 3.37 million B/D
[36].
Thus, there have been times when it is more economical for a gas plant to leave ethane in the natural gas
than to recover it in the NGL product.
Technically, the gas plant operation and configuration is changed to allow ethane to go overhead with the
methane from the demethanizer instead of down the tower with the propane and heavier hydrocarbons.
Rejecting ethane is less energy efficient than recovering ethane and frequently involves different process
flows and equipment.
If the plant feed gas is to be used to heat the demethanizer reboiler as during ethane recovery, the
demethanizer pressure would have to be dropped to around 100 psig from around 250 psig or higher. The
lower column pressure requires additional compression, which is often not available, in order to meet the
natural gas delivery pressure. Maintaining the demethanizer pressure constant requires a hotter reboiler
temperature, often greater than the plant’s feed gas temperature and greater than the maximum operating
temperature of aluminum reboilers. Thus, a different heating medium and a different reboiler is likely
required. It is also likely that the feed gas will not be hot enough to supply the heat needed by the side
reboiler. In a turboexpander plant, all the feed gas will then be sent through the gas-gas heat exchanger.
The hotter reboiler heat medium in a turboexpander plant could be hot residue gas from the compressor,
hot oil, or a gas-turbine exhaust.
To still recover the very valuable propane, the demethanizer is operated with as much reflux as possible.
The LTS will be running hotter. The expander will be providing additional shaft work to drive the booster
compressor, which allows the demethanizer pressure to be reduced some while maintaining same sales gas
compressor power. The expander also provides the demethanizer with additional reflux, improving propane
recovery.
Equipment and contractual restraints can prohibit achieving total ethane rejection, but still allow partial
rejection. Equipment limitations may include column flooding, expander flow rate limitation, or lack of a
sufficiently hot or large heating source for the reboiler. Limiting contract restrictions may include minimum
liquid volumes, minimum recovery levels, minimum product ethane content and maximum sales gas
heating value. In partial rejection, the reboiler temperature is raised to its maximum allowed without
encountering other equipment or contractual restraints.
NGL separation processes
The major types of commercial processes for recovering NGLs from natural gas (expansion, refrigeration,
turboexpansion, and absorption) are briefly described below along with some specific processes.
Joule-Thomson process
Joule-Thomson processes are the simplest NGL recovery processes. The Joule-Thomson process can attain
adequate recoveries without expending a large capital cost. The process is suitable for gas field locations
[43]. Figure 2.3 shows a simplified generic Joule-Thomson process.
A compressed natural gas stream is isenthalpically expanded suddenly, such as by a valve or orifice to a
lower pressure to provide autorefrigeration. The liquids are separated from the gas and stabilized by flashing
to remove light ends or fractionated. The process can remove water as a hydrate that is then separated,
melted and the water removed [111]. The gas leaves the LTS at the dew point temperature and pressure of
the separator. The energy efficiency is not high. The available pressure differential and the composition of
the feed gas limit the residual gas hydrocarbon and water dew points. Glycol may be injected to the feed
gas to further remove water when available pressure is limited. The process is capable of removing ethane

at a high recovery level. Joule-Thomson expansion plants offer relatively simple design and operation. The
process can be designed without using rotating equipment. The process can handle a broad range of gas
flows including low flows but is generally used in small capacity units or combined with another type of
process.
Figure 2.3 Joule-Thomson process block diagram
Compression Sales Gas
D
e
m
e
Feed Heat Flash t
Compression
Gas Exchange Separation h
a
n
i
z
e
r
Chiller
NGL Product
Refrigeration
Since the early 1900s, condensation achieved by compression and cooling has been employed to separate
heavier hydrocarbons from natural gas. A number of improvements increased the efficiency of the process
[1].
The cascade refrigeration process was commercialized in 1950. The process then evolved over a number
of years of commercial experience. The process can obtain high ethane recovery. However, after
commercialization in 1962–63, the turboexpander process rapidly replaced refrigeration processes for most
new construction. The main advantage of the cascade refrigeration process is flexibility—flexibility in feed
rate and flexibility to achieve different degrees of liquid recovery through only varying operating
conditions.
The cascade refrigeration process uses external, mechanical refrigeration to obtain cryogenic temperatures
for NGL recovery. Generally, two refrigerants are used such as propane-ethane or two mixed refrigerants
at different compositions. Each refrigerant circuit may provide refrigeration at several temperatures. The
refrigerants are cascaded, that is the warmest refrigerant at its lowest evaporating temperature is normally
used to condense the coldest refrigerant after vapor compression.
The cascade refrigeration process has many variations. The basic process consists of chilling, vapor-liquid
separation, demethanization and heat recovery. The scheme considered most efficient, especially for large-
capacity plants, uses an externally refluxed demethanizer. This variation also offers precise control of the
demethanizer overhead temperature and composition. The net overhead gas stream is not recycled.

In this most efficient process scheme, treated and dried feed gas is first cooled and partially condensed by
heat exchange and refrigeration. The condensate is separated and sent to the demethanizer. The vapor is
further heat exchanged with colder refrigerant and flashed to produce two phases in a second separator.
This second condensate is further heat exchanged and charged to the demethanizer. The second vapor
stream is warmed as it helps cool the first vapor stream and feed gas before being compressed and cooled,
becoming part of the sales gas product.
The demethanizer produces the NGL product as bottoms. The demethanizer overhead is partially condensed
with the liquid returned as reflux to the demethanizer. Gas from the reflux drum then supplies part of the
cooling to the feed gas and vapor streams before being compressed along with the vapor from the second
separator, becoming part of the sales gas product.
IPORSM process
The IPORSM (Iso-Pressure Open Refrigeration) process developed by Randall Gas Technologies, a division
of Lummus Technology, a CB&I company, is a versatile cryogenic process offering advantages over
conventional processes for NGL recovery. The IPOR process can be engineered to meet several different
applications depending upon the nature of the natural gas feedstock and objectives needed to meet natural
gas specifications or desired NGL product specifications. Feed gas may be rich or lean. The NGL recovery
may be high. The process can be designed for deep recovery to remove ethane to lower the heating value
of the sales gas. IPOR-N2 is the name of the process when it is designed to handle excess nitrogen. Figure
2.4 is the block diagram of the IOPR process.

Figure 2.4 IPORSM process block diagram
Sales Gas
Product
Compression
Feed Gas
Low BTU Gas
Product
Heat Exchange
Propane
Refrigerant
S
D e
e p
e a
t r
h a
a Separator t
n o
i r
z
e
r
Heat Exchange Mixed NGL Product
One major feature of the process is the low pressure drop of the natural gas route. The inlet and residue
compressors are omitted in many applications where the feed gas pressure is high enough to meet pressure
requirements of the sales gas piping system and of the process. The only pressure drop is through the inlet
cooling, the distillation column, condenser and piping.
A second major feature is the use of a mixed refrigerant open-loop refrigeration system as a low-temperature
refrigerant that is coupled with a closed-loop warmer refrigeration system such as propane. The low-
temperature refrigerant refluxes the NGL recovery distillation column. The reflux selectively absorbs
propane and heavier components from the gas creating high product recovery efficiencies. This
refrigeration system also achieves much lower temperatures (e.g., -160°F, -107°C) than previous
refrigeration processes that are typically limited to -35°F (-37°C). Lower temperature allows deeper
extraction of propane and ethane. Performance comparable to advanced turboexpander processes can be
achieved [55].
Other advantages of the process are listed below:
• High propane recovery; over 99% is typical.
• Low gas compression power consumption, often lower than turboexpansion processes.

• Moderate operating pressure, typically 200–450 psig.
• No pumps are required—increases reliability and safety.
• Carbon steel is used in more equipment than a comparable expander plant.
• Accommodation of changes in flow rate or composition are handled well.
• Wide turndown without a decline in expander efficiency.
• Ethane can be extracted.
• Since the only rotating equipment is the refrigerant compressor, reliability and operability of the process
is comparable to that of a conventional refrigeration process and should be higher than a turboexpander.
• The feed gas rate can be designed for 5 million scfd up to 1 billion scfd+. Turndown of capacity is almost
infinite since feed gas flow rate can be as low as 10% of design, limited by the performance of online
control instruments. At reduced flows, turboexpanders inherently loose efficiency.
• Compact layout.
• A high degree of modularization is possible.
Compared with a turboexpander design, Lummus found that the IPOR process:
• Achieves higher recovery of NGL.
• Required approximately 32% less process compression horsepower.
• Has approximately 20% less major equipment; rotating equipment is less [75].
To recover NGL while also lowering the nitrogen content of the sales gas, the process is run colder so most
of the methane is condensed for stripping with the mixed refrigerant. For example, for the case of feed
nitrogen content of 0.9 mol% and 11.26 mol% C3+, the separator temperature is -84°F (-64.4°C) for 99%
C3+ recovery.
Nitrogen content of the feed gas can range from 4 mol% or up to 10 mol% when the unit pretreats the feed
for a nitrogen rejection unit [75; 76; US 2010/0223950].
Ryan Holmes process
The Ryan Holmes process recovers NGL (C2+ or C3+) from high CO2 containing gas [83]. With significant
concentration of acid gas, the relative volatility of light hydrocarbons and CO2 occurs—CO2, less volatile
than ethane at low concentrations, becomes more volatile than ethane when CO2 content is over about 50%
and an azeotrope of CO2 and ethane exists [Re 32600]. Furthermore, there apparently is a near minimum
boiling azeotrope of CO2 and propane. This results in a pinch that severely affects distillation. The Ryan
Holmes process uses a NGL additive to remove the pinch. Relative volatility increases from 1.5 to 3.5 with
the additive. The reflux ratio is reduced along with the refrigeration duty. At constant refrigeration power
consumption, propane is 35% without the additive and 95% with the additive. In other terms, power
consumption with the additive at constant 95% propane recovery is about one-third the usage without the
additive.
The Ryan Holmes process has two columns—a C3 recovery column and a demethanizer [83; US 4462814].
The gas is dehydrated and compressed to around 330 psig and charged to the C3 removal tower [83].
The additive from the C3 tower bottom is cooled and recycled to before the reflux condenser of the
demethanizer to raise the condensing temperature above the freezing point of CO2. An additive slip stream
is withdrawn to remove heavy NGL product. The main NGL product is withdrawn from an intermediate
tray and cooled. A vapor side product that is withdrawn below the feed tray and recycled to a
dehydrogenation unit can be used to prevent the buildup of free water or solid hydrates in the column [US
4717408]. CO2 is removed below a refrigerated exchanger in the top of the column. Light gases go
overhead, are compressed, cooled and charged to the demethanizer. The demethanizer reduces the CO2 in
the residue gas to less than 6%. Liquid CO2 is flashed to provide refrigerant for the demethanizer condenser.
A single tower propane version can produce a C3+ side product, a CO2 overhead stream and the C4+ additive
as bottom product.
Stothers deep cut process
A new deep cut refrigeration process patented by W. R. Stothers (Ultimate Process Systems, Ltd.) integrates
a gas fractionator optimized at high pressure with a deethanizer operating at low pressure in order to extract
90% of the C3+ without using a turboexpander [90]. Since the fractionator operates at high pressure,
recompression of the residue gas can be avoided when the supply pressure is also high. The fractionator
also runs at a higher temperature that gives better separation while avoiding CO2 freezing. Hydrate
formation is reduced. Low carbon steel is used instead of stainless steel or alloys required at lower operating
temperatures. Mechanical refrigeration and expansion valves provide cooling. The turndown flow range for
efficient operation is wide, 30–100%. Often the gas supply is greater than 100 psig, on the order of 500
psig. The one version of the process is particularly advantageous when the gas is supplied at low pressure
(<100 psig) and the residue gas is provided at a low pipeline pressure [US 6182468]. If pipeline pressure is
greater than 600 psig, compression is preferably downstream of the recovery plant so the plant can operate
at about 400 psig. Two commercial plants were built in China in 1998. The products are residue gas, LPG
mix, and C5+ stabilized condensate. One plant recovers 90% of the propane in the feed.
A three-tower version of the process allows higher product recoveries with less energy and compressor and
total capital costs for moderate to large plants than the two-tower process [US 6098425]. It also allows the
gas fractionator to operate at lower pressure for optimum propane (or ethane) recovery. When the feed gas
must be compressed and the residue gas pipeline pressure is low, the three-tower process requires less
compression power than turboexpander or Joule-Thomson processes or refrigeration processes.
PRICO-NGL® process
The PRICO-NGL® process is a refrigeration process licensed by Black & Veatch. The process is especially
applicable for upgrading low-pressure gases having high hydrogen content such as refinery off-gases.
Variations in feed gas flow and composition are handled easier than in turboexpander processes. The
process (Figure 2.5) uses a simple closed-loop hydrocarbon refrigeration circuit to obtain colder
temperatures than obtained with propane or propylene refrigerants. The lower separation temperature
minimizes or eliminates feed gas compression. In some applications, expansion pressure drop and
associated recompression can be eliminated. Operating at lower temperatures can greatly reduce capital and
operating costs [6].

Figure 2.5 PRICO-NGL® process block diagram
Sales Gas
Refrigeration
Feed Gas Unit
Heat Exchange
Condenser/
Liquid
Separation
Flash
Separation D
e
m
e
t
h
a
n
i
z
e
r
C2 + NGL
Product
Turboexpander processes
Since the 1960s, most modern gas plants are based on turboexpander cooling. The basic turboexpander
process fathered a number of process schemes to overcome limitations in operational flexibility and overall
recovery performance. Turboexpander processes are capable of producing lower temperatures than the
Joule-Thomson or refrigeration processes, which enables recovery of propane greater than 80% and
significant recovery of ethane in the mixed NGL product. The process is more reliable than the refrigeration
processes it replaced since 1962–63.
The advantages of turboexpander processes include:
• Available pressure drop between feed gas and sales gas is utilized (an advantage when full restoration of
the inlet gas pressure is not necessary).
• Very high ethane recovery can be achieved.
• Utility costs are relatively low.
• Plant layout is compact.

• Lean gas can be processed.
Since the basic, early processes are beyond their patent coverage, generic process are offered by a number
of engineering design and contracting firms [1]. We briefly describe the basic types of turboexpander
processes and some of the newer licensed processes.
Conventional process
For recovery of propane above 80% or the recovery of significant amounts of ethane, simple Joule-
Thomson processes cannot provide low enough temperatures. The conventional turboexpander process
produces cryogenic temperatures that enable high propane and ethane recoveries. Besides creating
cryogenic temperatures, a major advantage of turboexpander processes is the utilization of the work of
expansion to drive a booster residue gas (sales gas) compressor. Utilization this work reduces the cost of
compression. Depending upon the feed gas composition, its pressure and the sales gas pressure, a
conventional turboexpander process may recover 95–99% of the propane and 70–80% of the ethane.
The turboexpander replaces the adiabatic, Joule-Thomson expansion valve for cooling the feed gas with a
partially isentropic (reversible) expansion. Conceptually, the expander section of the turboexpander is like
a backwards operating compressor. Gas pressure drop from the inlet to the outlet rotates a shaft. The gas
remains a gas as it passes over the wheel that drives the shaft. A portion of the gas then liquefies in the
diffuser nozzle, where gas velocity converts to pressure energy.
In the conventional turboexpander process (Figure 2.6), the feed gas is split for initial cooling and then
recombined for vapor-liquid separation. The vapor flows through the expander section of the turboexpander
to the top of the demethanizer column. The liquid is cooled upon flow through a Joule-Thomson valve and
into the demethanizer about 3–4 stages from the top. A liquid side draw is vaporized in a side reboiler and
returned lower in the column. Bottoms from the tower flow to the reboiler. Reboiler vapor returns to the
bottom of the column. The liquid is the mixed NGL product.
Figure 2.6 Conventional turboexpander process block diagram
Compression Cooler Sales Gas
Turbo-Expander
D
e
m
e
Feed Gas t
h
Heat Exchange Flash Separation a
NGL Product n
i
z
e
r

The feed gas stream is split to allow the reboiler to be independently controlled in order to maintain product
quality and to improve heat transfer efficiency. The LTS prevents liquid in the cooled feed gas from entering
the expander. The separator also improves process efficiency by reducing the amount of heavier
components in the demethanizer overhead gas. The side reboiler more uniformly distributes the vapor
within the tower, reducing its diameter but adding to its height for the chimney tray and vapor-liquid
disengagement.
Gas subcooled process
The gas subcooled process (GSP) was the first widely process that overcame the limitations to high ethane
recovery. Recovery is improved by feeding a cold liquid stream above the turboexpander inlet to the
demethanizer [7].
GSP (Figure 2.7) employs a split vapor feed as a reflux to the rectification section of the demethanizer
column. The cold liquid reflux is produced by condensing and subcooling a portion of the feedstock. The
subcooled liquid is flashed; the liquid is charged as reflux to the top of the demethanizer. Ethane and
propane are condensed and absorbed by the reflux. Ethane and propane recoveries are increased, ethane to
over 95%. Also the risk of freezing CO2 is reduced significantly by having a hotter cold separator, which
raises the temperature within the column [1].
Figure 2.7 Gas subcooled turboexpander process block diagram
Compression Cooling Sales Gas
Turbo-Expander
D
Feed Gas Flash Separation e
Heat Exchange m
e
NGL Product
t
h
a
n
i
Heat Exchange Flash Separation z
e
r
Cold residue recycle process
The cold residue recycle (CRR) process can provide up to 98% ethane recovery. Propane and heavier
hydrocarbons can optionally be maximized while recovering ethane [7].
The CRR process (Figure 2.8) adds another compressor to GSP to raise the pressure of a portion of the cold
tower overhead, which is then condensed and subcooled by split vapor feed. The stream is fed as reflux to
the top of the demethanizer column, where it flashes to column pressure. This reflux stream improves

refraction, improving ethane or propane recovery to over 99%. However, the capital cost of the added
compressor may be expensive even though the recycle flow is smaller and less compression is required [1].
Figure 2.8 Cold residue recycle process block diagram
Heat Exchange
Compression
D
e
m
Turbo- e
Feed Gas Heat Exchange Flash Separation
Expander t
h
a
n
i
z
e
r
NGL
Product
Ortloff recycle split vapor process
The Ortloff recycle split vapor (RSV) process is able to be switched between ethane recovery and rejection
in response to market price changes. The RSV process can also be operated in GSP mode. Tolerance to
CO2 is better than GSP since the operating pressure is higher.
In the RSV process (Figure 2.9), a recycle stream from the demethanizer column overhead is first warmed
and compressed and later sufficiently cooled to further condense liquid before being fed to the
demethanizer. A separate recycle compressor is not required since the residue gas compressors drive the
process [1].

Figure 2.9 Recycle split vapor process block diagram
Compression Cooler Sales Gas
Heat Exchange
D
e
m
e
t
h
a
n
Turbo-Expander
Feed Gas i
Flash z
Heat Exchange
Separation e
NGL Product
r
IPSI enhanced NGL recovery processes
The enhanced NGL recovery process (IPSI-1) was developed by the IPSI Company. The process (Figure
2.10) employs a self-refrigeration system using a slip stream from the bottom of the demethanizer column
as a mixed refrigerant. This reduces the propane refrigeration duty. A disadvantage is additional
refrigeration maybe needed as the feed becomes richer and the plant capacity increases [1].

Figure 2.10 IPSI-1 process block diagram
Heat Exchange
Flash Turbo-
Heat Exchange Separation Expander
D
Feed Gas e
m
e
t
h
Pump Around a
Heat Exchange n
i
z
e
r
Compression Cooling
Flash
Separation
NGL Product
IPSI enhanced NGL recovery with internal refrigeration
The enhanced NGL recovery process (IPSI-1) was improved by adding internal refrigeration. The IPSI-2
process (Figure 2.11) uses an open cycle refrigerant drawn from the demethanizer plus a closed cycle
refrigerant derived from the open cycle refrigeration system. The addition of the closed-cycle refrigeration
loop can avoid the need for external refrigeration, especially for very rich feedstocks, unlike the IPSI-1
process [1].

Figure 2.11 IPSI-2 process block diagram
Heat Exchange
Turbo-
Expander
Heat Flash
Exchange Separation
Feed Gas
D
e
m
Heat e
Exchange t
h
a
Compression Cooling n
i
z
e
r
Flash Flash
Separation Separation
NGL
Product
Delpro™ process
The Delpro™ Process developed by Delta Hudson economically recovers propane up to 99% with power
consumption up to 15% lower than competing processes at the same recovery [94]. Conversely, for the
same power, recovery is higher. The process uses liquid for absorber reflux collected after turboexpansion
of the absorber overhead gas. The process can be adopted to recover around 50% of the ethane while
rejecting greater than 70% of the CO2 to the residue gas. The process produces ethane with less CO2 than
other processes so treating requirements are reduced or in some cases avoided. The process was developed
for gas containing 1% propane found in major pipelines from Western Canada to Eastern Canada and to
California.
In the basic Delpro process, feed gas is split with a portion cooled by exchange with residue gas and a
portion cooled by exchange with absorber liquid. The cooled gas is fed to a high-pressure absorber, where
C3+ flows out the bottom. The bottoms liquid pressure is flashed over a valve, one portion is then heat
exchanged with a portion of the feed gas and charged to the midsection of a deethanizer column. The
unheated portion of the absorber bottoms is charged to the top of the deethanizer as reflux. The deethanizer
is reboiled, the NGL bottoms product is air heat exchanged. The deethanizer overhead gas is partially
condensed before entering the turboexpander separator by exchange with the separator liquid. Absorber
overhead gas is turboexpanded, combined with the partially deethanized overhead and the residue gas
separated from the NGL liquid. The liquid is pumped through the deethanizer exchanger, is partially
vaporized and charged to the top of the absorber. Light vapor (methane and ethane) flows through the
absorber increases the expander horsepower and extracts additional heat, increasing overall efficiency.
The basic process recovers about 91% of the propane from a feed containing 1% propane or 97% of propane
from a 3% propane feed gas. Propane recovery of apparently 97% is obtained from feed gas containing 1%
propane in a variation having a reboiled absorber. The deethanizer overhead gas is combined with residue
gas from the turboexpander vapor-liquid separator, the liquid is used as absorber reflux.
For propane recovery of over 99%, a two absorber version is used. The turboexpander outlet separator is
replaced by the second absorber. Condensed deethanizer overhead provides the reflux from the added
absorber. Pumped liquid from the bottom of the expander absorber is first partially vaporized while
condensing a portion of the deethanizer overhead. Residue gas from the turboexpander is cooled, condensed
and further cooled.
When up to around 50% of the ethane is to be recovered, a demethanizer is added to the basic process. The
bottoms of the demethanizer are charged to a deethanizer producing ethane and NGL. Residue gas from the
high-pressure turboseparator is cooled, combined with the demethanizer overhead gas, and compressed.
Dephlexol process
The Dephlexol process developed by IFP with the Marston Operations of Chart Heat Exchangers Division
synergistically combines the IFPEXOL–1 process with dephlegmator technology for deep and selective
NGL extraction [87; 89]. Significant cost savings and improved liquids extraction performance is achieved
while meeting all environmental standards. Propane recovery of over 95% is achieved.
IFP developed the IFPEXOL-1 process for water removal and hydrocarbon dew point control and the
IFPEXOL-2 process for acid gas removal. The processes can be combined. Methanol is used to inhibit
hydrate formation in natural gas, to remove acid gases and water, and to recover heavy hydrocarbons.
Methanol is a more powerful hydrate inhibitor, has lower viscosity and surface tension and beneficial higher
vapor pressure than other inhibitors. At the coldest temperatures, methanol has the highest CO2 absorption
capacity compared with other solvents [87].
High-pressure, wet rich gas feed is dehydrated by chilling in the presence of methanol with the methanol
recovered by the IFPEXOL-1 process (described in [87]). The gas is precooled in a gas/gas heat exchanger.
A three-phase cold separator removes the condensed water/methanol stream that is sent to the IFPEXOL-1
contactor and hydrocarbon condensate that is flashed and sent to the top of the stabilizer. The liquid is
expanded and serves as reflux to the stabilizer column that may be either a demethanizer or a deethanizer.
High-pressure vapor from the cold separator contains equilibrium concentrations of methanol, water and
hydrocarbons. The vapor is passed overhead through a turboexpander to reduce the pressure and
temperature in order to condense the residual water/methanol and hydrocarbons. Methanol prevents
freezing in the expander discharge. The three-phase discharge from the expander flows under pressure
differential to the top of the multichanneled dephlegmator containing a special vapor/liquid
separator/distributor. Both extremely cold phases provide auto-refrigeration as they pass down their
channels. The light components in the cold liquid are revaporized and provide a substantial amount of the
refrigeration duty. Some wanted hydrocarbons vaporize but are subsequently recovered by rectification in
the dephlegmator.
The reheated liquids flow into a low-pressure cold separator beneath the dephlegmator. Rich overhead from
the stabilizer (demethanizer or deethanizer) is also charged to the cold separator. Rich vapors flow up
through the dephlegmator from the cold separator. Equilibrium methanol content is about ten times the
residual water content and prevents freezing. Cold NGL is separated from water in a boot. Water/methanol
mixture is returned to the high-pressure separator water boot and then to the Ifpex-1 contactor for methanol
recovery. Separated cold NGL is pumped to the top of the simple stabilizer column, where dissolved
methane and/or ethane is stripped. The bottoms of the stabilizer contain dissolved methanol is then water
washed for complete methanol recovery.
Dry residue gas and noncondensibles flowing from the dephlegmator are warmed in exchange with the wet
feed gas. The turboexpander driven compressor compresses the residue gas. Adding a residue gas
compressor allows delivery of residue gas up to 80 bar (1,160 psig).
Absorption processes
In an absorption process, upflowing natural gas is countercurrently contacted with a downflowing light oil
stream (nonane, decane, and heavier, usually a mixture of paraffinic compounds of molecular weight
between 100 and 200 [77]) in a tray or packed tower at about 400 to 1,000 psig and ambient or moderately
subambient temperatures. The absorbed NGLs are separated from the absorbent by fractionation. A portion
of the propane along with a major portion of the C4s is recovered plus the natural gasoline.
Absorption occurs at subambient temperatures from -17 to -40°C (0 to -40°F), the recovery of propane
along with ethane is greatly increased. Processes of this type can recover more than 98% of the propane
and up to 65% of the ethane.
Many of the absorption plants originally designed for ambient temperature absorption have been revamped
to refrigerated absorption units. The Mehra process is especially applicable to revamping of straight
refrigeration plants.
Mehra process
The Mehra process is a refrigerated absorption process that uses a light boiling C5+ solvent to recover C2+
or C3+ hydrocarbons. Recoveries are on the order of 96% ethane or 96% propane depending upon the mode
of operation. Straight refrigeration plants typically recover about 30–50% of the propane and 65–80% of
the butanes and heavier products. The process can be readily integrated with a straight refrigeration plant
to expand capacity while increasing NGL recovery. Such a revamp is described by Bell and Mehra [81;
114]. Although the capital cost is higher than expansion of the straight refrigeration process, the increased
NGL recovery reduces the cost per B/D of NGL below the cost of the straight refrigeration. Other
advantages are carbon steel metallurgy, wide operating pressure feeds from 200 to 1,200 psig without inlet
gas compression and online switching from 96%+ C2 and 99%+ C3 recovery to <2% C2 and 98%+ C3
recovery.
The natural gas feed is dehydrated by injection of ethylene glycol, cooling with propane refrigeration, and
the condensed water/glycol mixture separated in a three-phase separator. The glycol is regenerated and
recycled. The chilled hydrocarbons are charged to a single-column absorber. The gases flow upward in the
absorption section while liquids flow down the stripping section. The absorber has a reboiler and possibly
a side reboiler. When natural gas feed is available at about 450 psig or higher, a two-column absorber is
used with the absorber operating at the inlet gas pressure and a separate stripper operating at low pressure
below the critical pressure of the liquid in the reboiler. Vapors from the stripper are compressed and
optionally cooled before entering the absorber. Rich solvent leaving the bottom contains only the amount
of light ends allowed by the NGL specifications. The column can be operated as either a demethanizer or
deethanizer. Either C2–C4 or C3–C4 overhead product leaves the solvent regenerator.
The rich solvent is fractionated in the regenerator tower that operates as a debutanizer, the bottoms being the
C5+ lean solvent. The lean solvent is cooled in the absorber side reboiler. Excess C5+ gasoline (typically less
than 2.0 LV% butanes) is split as the natural gasoline product. The cooled lean solvent is mixed with the
absorber overhead and chilled by propane refrigerant to presaturate the solvent with the undesirable
components (e.g., methane if ethane is desired). The solvent is separated from the residue gas in a presaturation
separator and returned to the top of the absorber. To prevent any water from freezing in the absorber, the
temperature of the separator is no lower than the outlet temperature of the feed gas chiller. The residue gas
from the separator is warmed by the incoming feed gas and recompressed and sent to the pipeline.

Compared with the conventional refrigerated lean oil process, the Mehra process uses a lower molecular
weight solvent, has less solvent loss, has a reboiled absorber column, and presaturates the solvent with gas
essentially free of the key absorbed component, either ethane or propane depending upon the mode.
CryoGasSM TCHAP process
The Fluor® CryoGasSM TCHAP (two-column high-pressure absorption process) is also a turboexpander
process for high-pressure feed gas suitable for integration with LNG liquefaction processes to improve
energy efficiency by about 8.7% compared with a standalone plant. Rechilling of the NGL plant recovery
gas (sales gas), the LNG plant feedstock, is avoided. In the process, the first of the two columns is an
absorber operating at high pressure (above 450 psig). The second column is a demethanizer or deethanizer
that operates at lower pressure. A recycle compressor returns a methane rich stream from the demethanizer
or deethanizer to the absorber as subcooled reflux. The demethanizer column in conventional NGL recovery
processes typically operate at or below 450 psig since the relative volatility between methane and ethane is
reduced at higher pressures [78].
Adsorption
Activated carbon and similar materials can selectively adsorb relatively heavy hydrocarbons from a natural
gas stream. Heated gas is used to regenerate the adsorbent and recover the heavy hydrocarbons. The
overhead condensate can then be fractionated. The process was applied to recover natural gasoline. The
process is being used in some plants to remove hydrocarbons from acid gas to protect the Claus catalyst.
Compression
Compressing a wet natural gas followed by moderate cooling will cause high molecular weight
hydrocarbons to condense and be separated from the gas. This is the oldest NGL extraction process
developed at the beginning of the 20th century, but is rarely used today.
Membrane process
A membrane-based process that separates condensable from noncondensable gases has been
commercialized since 1990 with more than 50 units installed in the chemical industry worldwide [91]. The
process has successfully passed commercial trials for natural gas dew point control and NGL recovery. The
process also has applications in debottlenecking existing plants. Since the unit is very compact and
lightweight, membrane separation is also well-suited to offshore installation. The simple systems can be
operated with minimal supervision.
NGL fractionation
NGL fractionation plants traditionally are a distillation column train consisting of a deethanizer, a
depropanizer, a debutanizer, and a C4 (butane) splitter column (Figure 2.12). Overhead of each tower is
totally condensed with a portion returned to the top of the tower as reflux. Reboilers supply heat and
generate vapor for stripping. Heat exchange of bottoms product with deethanizer feedstock cools the
products.

Figure 2.12 Generic NGL fractionation process block diagram
Acid Gas
Ethane Product Propane Product Isobutane Product
Deethanizer Depropanizer Debutanizer C4 Splitter
n-Butane Product
Heat
Exchange
NGL Mix From

C5 + Natural Gasoline Product
Recovery Plant
Fractionation plants are designed conservatively to allow for meeting specifications with varying feed rates
and compositions, exchanger fouling, and ambient temperature changes (maximum summer temperature
for condenser duty) [109]. Plants tend to also be operated conservatively to guarantee meeting product
specifications all the time at the expense of increased energy consumption. State-of-the-art control systems
and analytical instrumentation now permit operation more near the economic optimum. Suggestions for
improving the profitability of existing plants include:
• Reduce column pressure at least with the season during cool weather or reduced throughput.
• Reduce product purity to avoid overly pure product. Reflux and reboiler duties are increased when higher
purity is produced. Approximately 15% more heat is required for 98–99% purity instead of 95% purity.
• Monitor and maintain the performance of condensers and reboilers by cleaning as necessary.
• Increase the concentration of lower value components in higher value products within the restraints of
optimization of minimum energy consumption.
Capacity expansion options for NGL fractionation are discussed by Manley [82]. Six deethanizer processes
are compared with the conventional design for a 10 ft. diameter column with sieve trays. Two designs were
high-pressure and four were low-pressure. At a constant 10 ft. diameter, conventional high-pressure
deethanizer capacity could be more than doubled in some designs. In some options, additional height is
needed as the number of trays was increased up to 39 from conventional design’s 24, but a simple low
pressure required fewer trays (19) while increasing capacity to 42.4 MB/D from 18.8 MB/D of the
conventional design. The same concepts can be adapted to the other fractionators [82]. Sieve trays were
used. Capacity could be further increased by using high-capacity internals.

At high pressure, adding an interreboiler increased capacity to 27.2 MB/D with 32 trays. Adding feed
preheat with intercondenser gave 29.5 MB/D with 37 trays. A low-pressure deethanizer had a capacity of
52.9 MB/D with 24 trays. Capacity up to 72.9 MB/D was possible with low-pressure, partial interreboilers
and a side stripper and 39 trays.
Manley’s designs apply distributed distillation concepts. In distributed distillation, a component boiling
between the two key components to be separated is distributed between the overhead and bottoms of the
column [47; 49]. More columns are required with distributed distillation than the conventional scheme but
they are smaller and lower cost. The number of pieces of equipment is about the same in each case. The
cooling and heating curves with distributed distillation have greatly reduced or eliminated the flat portions
of the curve typically found in conventional distillation [48]. Consequently, single component refrigerants
do not provide as close a temperature approach with distributed distillation as can be achieved with single
refrigerants in conventional distillation.
Product specifications
Product specifications are established to protect downstream processing and shipping equipment as well as
to provide performance uniformity for the consumer. Although some countries have established national
standards for sales gas, in the United States, sales gas must meet specifications that are set by pipeline
companies for composition, performance, and for pipeline operability. Since specifications are set in
contract negotiations between the pipeline company and gas supplier, no firm standard specifications apply
across the United States. Typical LNG plant feedstock specifications are more stringent.
Pipelines limit inerts (predominately N2, He, and O2 plus CO2), sulfur compounds, water content, and
heating value of the natural gas to be shipped. Inerts may be as high as 4% but usually are limited to 1–3%
[95]. The trend is more stringent—to 2% vol. or even 1% in some pipelines [97]. An alternative to a direct
inert specification is a lower heating value specification, averaging around 967 Btu/scf but not lower than
1,050 Btu/scf [97]. Heating value is not normally a problem if the composition specifications are met. To
meet the inert or heating value specification, CO2 would be the first component reduced since it is less
costly to extract than N2. Oxygen is a not uncommon problem on older vacuum gathering systems where
air is aspirated into the line through leaks.
The gas must be delivered to the pipeline at the local pipeline pressure subject to a minimum pressure, 600
to 1,000 psig typically. Temperature limits help protect the line’s metallurgy and pipe coatings. The
minimum delivery temperature is typically 4°C (40°F) with maximum temperature typically 49°C (120°F)
[84; 92].
Mixed NGLs commonly, called Y-grade, typically meets these specifications plus corrosion and other
specifications:
• Vapor pressure less than 600 psig at 38°C (100°F)
• Methane <0.5 liquid volume %
• Carbon dioxide <0.5 liquid volume %
• No free water [88]
There are no industry-wide standard specifications for ethane or ethane-propane mixtures [102]. Purity
ethane is ≥95% pure and the ethane-propane mixture is 80% ethane and 20% propane. Propane generally
contains ≥90% propane with ≤2.5% C4+ hydrocarbons. n-Butane is at least 95% pure with less than 1.5%
isobutane and at most 2.0% C5+ hydrocarbons. Isobutane is at least 95% pure, has less than 3.41% n-butane
and at most 0.5% C5+ hydrocarbons [93; 98, 102].
Shipping and storage
Ethane is shipped by pipeline or ship. Ethane-propane mixtures are commonly transported to refineries and
chemical plants via dedicated pipelines due to the high vapor pressure and specifications on water content.
Pipelines are the preferred method for shipping LPG to the main consuming regions of the United States
(upper Midwest and eastern states). Since the volume does not justify pipelining, butanes are stored on-site
and shipped preferably by railroad or truck. Natural gasoline production is usually too small for continuous
pipeline shipment so it is batched shipped by rail road or truck to a refinery.
Liquid products are either stored above ground in pressurized tanks or underground in large caverns [7].
Environment impact and safety
Gas plant and fractionator plant environmental and safety risks are relatively minor. All process gases and
liquids are sent directly to the flare system in case of emergency. Spills of lubricating oils are the main
potential liquid pollutants. Water from rain runoff and the regeneration of the molecular sieve dryers is the
main liquid waste. Spent molecular sieves from the dryers, which may contain mercury in a few plants, is
the main solid waste.
Gas leaks, depending upon the contaminants in the feed gas, may release small concentrations of air
pollutants. Since the feed gas is treated upstream when necessary to meet sales gas sulfur specifications
(primarily hydrogen sulfide removal), the gas contains a relatively low amount of sulfur compounds. Plants
whose feed gas contains mercury, arsenic or naturally occurring radioactive materials (NORM) require
some special handling procedures.
The presence of mercury in the feed to brazed aluminum heat exchangers is a danger since mercury corrodes
aluminum (and other materials such as copper, zinc, brass, chromium, iron, and nickel) causing low
temperature failure. When present in the feed gas, mercury is adsorbed by the dryer molecule sieves, in
which case special handling and disposal of the spent molecular sieves are required.
Arsenic exists in some natural gases as trimethylarsine, As(CH3)3, that usually collects as a fine dust.
Trimethylarsine is relatively more volatile than metallic arsenic. These natural gases may not be marketable
without arsenic removal (by adsorption from about 1,000 down to less than 1 µg/m3) upstream of the gas
plant.
NORM in some natural gases occurs from the decay of radon-222 (~3.8 day half-life) to eventually stable
lead-206. The decay products accumulate on surfaces to form low-level radioactive scale. This scale may
flake off and accumulate on filters. Due to its boiling point, radon-222 tends to concentrate in propane and
ethane-propane mixtures. Intermediate radioactive products may accumulate as sludge in tanks. Radon-222
can be a health problem, mainly in confined spaces. Radioactive materials such as the scale, sludge, and
pipes require special handling and disposal procedures.
The high pressures and cryogenic low temperatures are the main safety issues in gas plants and NGL
fractionation plants. Of special concern is plugging resulting from too high concentrations of water, heavy
hydrocarbons, or CO2 in the gas. The plant’s relief system design and maintenance are critical to safe
operation [7].

3 Process economics
The process economics of three turboexpander processes plus a generic NGL fractionation process are
determined for four feedstocks varying in composition both with and without ethane rejection and for two
price scenarios—fourth quarter 2015 when crude oil averaged 42 $/barrel and first quarter 2014 when crude
oil averaged 100 $/barrel. Listed in general order of increasing ethane recovery potential, the
turboexpansion processes are:
• Conventional
• Simplified gas subcooled process
• Simplified recycle split vapor process
The conventional process is the simplest scheme of the three. Feed gas is first split into two portions both
of which are then cooled. One portion is cooled by heat exchange with the sales gas from the demethanizer
in the main exchanger. The second portion is cooled by heat exchange first with the demethanizer reboiler
and then with the demethanizer side reboiler. The two gas streams are recombined before entering the LTS.
Vapor from the LTS flows through the turboexpander and a Joule-Thomson valve to the top of the
demethanizer. Liquid from the LTS is charged lower in the column. The demethanizer overhead gas (sales
gas) is warmed by the subcooler before being compressed to pipeline pressure in two stages. The
turboexpander power is utilized by driving the first compressor (the booster compressor). The sales gas is
brought to pipeline pressure by the second, motor driven compressor.
The simplified gas subcooled process can be viewed as a modification of the conventional process. A
portion of the LTS vapor is split into two portions. One portion is subcooled by heat exchange with the
demethanizer overhead gas. The subcooled vapor is then further cooled by Joule-Thomson expansion
before entering the top of the demethanizer. The second portion of the vapor passes through the expander
and enters the demethanizer some stages below the first portion. The liquid from the LTS is charged to the
demethanizer below the lowest vapor feed stream.
In the simplified recycle split vapor process, the gas subcooled process is modified by recycling a portion
of the compressed sales gas to the top of the demethanizer. The recycle gas passes through the subcooler,
which now exchanges heat between three streams, where a portion of the recycle gas condenses. Upon
entering the demethanizer, the liquid flashes and acts as reflux.
The fractionator process is a successive distillation process in which ethane, if significantly present, is
removed first followed by propane, natural gasoline, and the butanes.
NGL recovery
The process economics of NGL recovery from pretreated natural gas feedstocks are presented for the
following processes:
• Conventional turboexpander process
• Simplified gas subcooled turboexpander process
• Simplified recycle split vapor turboexpander process
The feedstock compositions used are listed in Table 3.1. These feed gases were chosen from previous PEP
reports and reviews to cover a range of NGL content from a rich 3.21 C2+ GPM (gallons of C2+ NGLs per
1,000 standard cubic foot of gas) for Rich A to a lean 0.82 C2+ GPM for Lean. The two intermediate
feedstocks (Rich B, 2.54 C2+ GPM, and Rich C, 2.31 C2+ GPM) contain higher natural gasoline and butane
contents and lower C2/ C3 molar ratios than the Rich A or Lean feeds. Rich B and Rich C also differ in C5+
natural gasoline content with Rich C having the highest content of the four feeds, 1.00 mol%, compared
with 0.40 mol% for Rich B. The propane content is higher for Rich B (2.65 mol%) than for Rich C (1.80
mol%).
All four gas feedstocks meet the sales gas specification of gross heating value of 950 to 1,150 Btu/scf of
gas. Except for feed gas Rich C, all gas feeds meet all sales gas composition specifications (see Appendix
B). Rich C contains twice the maximum allowed C5+ natural gasoline content of 0.5 mol%. Rich C feed
gas would either be blended with lower C5+ content gases or sent to a gas plant for NGL reduction in order
to provide on-specification sales gas.
Table 3.1 Natural gas feedstock compositions

Mol% Mol% Mol% Mol%
Component
Carbon dioxide 0.294401 0.105577 0.350 0.190551
Nitrogen 0.858944 2.852837 0.200 0.544833
Hydrogen sulfide 0.027155 0.050
Methane 87.062950 88.012716 91.400 96.309826
Ethane 8.488525 4.746964 4.100 2.208835
Propane 2.350608 2.651120 1.800 0.399376
Isobutane 0.254762 0.361336 0.500 0.047220
n-Butane 0.445834 0.863368 0.600 0.056664
Cyclo-pentane 0.026392 0.100
Isopentane 0.167440 0.300
n-Pentane 0.128271 0.170016 0.200 0.209219
Methylcyclopentane 0.004399
Cyclo-hexane 0.004399 0.040
Isohexane 0.019331 0.090
n-Hexane 0.015035 0.040
Benzene 0.002370 0.060
n-Heptane 0.016625 0.068628 0.170 0.033477
Properties
C2+ GPM 3.21 2.54 2.31 0.82
Ethane/propane molar ratio 3.61 1.79 2.28 5.53
Total butanes, mol% 0.70 1.22 1.10 0.10
C5+ Natural gasoline, mol% 0.22 0.405 1.00 0.24
Molecular weight 18.5092 18.5855 18.3496 16.7721
Density @100°F, 800 psig, lb/ft3 2.858 2.850 2.825 2.516
Net ideal gas heating value, Btu/ft3 1013.32 991.45 1012.84 933.44
Gross ideal gas heating value, Btu/ft3 1120.87 1096.85 1120.49 1035.49
Ethane recovery economics
Maximum ethane recovery is the economic optimum when ethane prices are high enough to recover the
incremental production cost. For relatively high ethane prices, the economic optimum is to run the plant for
maximum ethane recovery. As the price of ethane declines, at some point the optimum ethane recovery
starts to decline.

Bryan Research and Engineering, Inc. reported the results of Joule-Thomson plant simulations combined
with a quadratic model for determining the optimal gross plant revenue. For the Joule-Thomson process,
60% was the maximum ethane recovery possible under plant constraints:
• Lowest chiller outlet temperature (-35°F)
• Highest inlet pressure (900 psig)
• Highest bottoms methane:ethane ratio (0.026)
At these conditions, plant fuel consumption was also at a maximum. Holding the price of the other products
(sales gas, C3+) constant, the effect of ethane price on ethane recovery was determined (Figure 3.1).
Figure 3.1 Effect of ethane price on optimal ethane recovery based on gross plant revenue
Bottoms C1/C2
% ETHANE RECOVERY
Effect
Chiller Pressure
Effect Effect
ETHANE PRICE
Source: [43] © 2016 IHS
Lowering the methane-to-ethane ratio maintains the C3+ recovery while lowering the recovery of ethane,
so it is the first variable adjusted. Next, further ethane rejection is obtained by reducing the inlet gas
compressor pressure. The lower pressure significantly reduces plant fuel consumption by increasing the
demethanizer inlet temperature. When the minimum inlet gas pressure is reached (500 psig), the final
variable changed is the chiller temperature. This variable is changed last since it has the greatest detrimental
effect on the propane recovery [43].
Contracts
The type of contract also directly influences the gross plant revenue and optimal operating conditions. Since
the feed gas owner does not run the plant, the gas owner’s share of gross revenue is not included in the
plant optimization. Four types of contracts are in use:
• Fixed price
• Retention of liquids
• Keep whole
• Hybrid

A fixed-fee contract, the most conservative contract type, allows plant operating independent of current
product prices. Increasing revenue for the gas owner is the optimal strategy under fixed-fee contract.
Retention of liquids, also a conservative type of contract, benefits the plant when prices are high, but reduces
plant revenue when prices decline. If the plant does not pay for fuel, optimum strategy under a retention of
liquids contract is to recover as much liquid as possible independent of product prices.
Keep-whole contracts allow the plant to receive more revenue than other types of contracts when prices are
high. However, significantly more money is lost by the plant when prices are low. Optimization includes
product revenue along with processing costs.
The effects of low product prices on plant revenue can be reduced at the expense of lower revenue when
prices are high by hybrid contracts. An example is processing one feed gas stream under a contract giving
the plant 15% of the liquids while processing a second feed gas stream under a keep-whole contract [43].
Capital costs
Summaries of the capital costs of recovering NGLs are presented in Table 3.2. The capital investments are
based on these assumptions:
• PEP Cost Index of 1107 (fourth quarter 2015).
• Stream factor of 0.95.
• US Gulf Coast location.
• 100 million scfd of feed gas, independent of the four feed gases. Each process includes a molecular sieve
feed drier system.
• Each plant contains the major equipment necessary to either recover or reject ethane.
The capital investment for a process is independent of the feed gas composition, but the capital intensity
depends upon the NGL capacity. For each turboexpansion process the plant design having generally the
largest major equipment of the four feed gases was chosen. The refrigeration-based process only rejects
ethane.
Table 3.2 Capital costs of NGL recovery processes

Process Conventional turboexpander GSP turboexpander RSV turboexpander
Feed gas Rich B Rich B Rich B
Base year Fourth quarter 2015 Fourth quarter 2015 Fourth quarter 2015
PEPCOST index 1107 1107 1107
Stream factor 0.95 0.95 0.95
Location US Gulf Coast US Gulf Coast US Gulf Coast
Capacity, MT/yr (MM lb/yr) NGLs 139,000 (307) 152,000 (335) 158,000 (347)
Investment, (US$ millions)
Battery limit (BLI) 28.29 28.95 31.09
Offsite 12.43 13.55 14.32
Total fixed capital (TFC) 40.72 42.50 45.42
Capital intensity, US$/lb/yr NGL 0.133 0.127 0.131
The BLI, off-site, and TFC capital costs of the turboexpander processes increase with increasing process
complexity.
Unit consumption and variable costs
The following tables are based on one feed gas, Rich B (see Table 3.1 for composition). Each plant is sized
to process 100 million scfd of pretreated, dry feed gas at 0.95 stream factor. Table 3.3 presents products
and utilities price during fourth quarter 2015 when crude oil was at $42/barrel and during first quarter 2014
when crude oil was at $100/barrel. Table 3.4 summarizes the unit consumption and variable costs estimated
using current (fourth quarter 2015) feedstock, utilities and product values for the three turboexpander NGL
recovery processes when ethane is recovered (C2+ NGL produced). Table 3.5 summarizes these processes
when ethane is rejected (C3+ NGL produced). Similarly, Tables 3.6 and 3.7 summarize the cases under 100
$/barrel oil (first quarter 2014) values.
Table 3.3 Values of feedstocks, products, and utilities

Time Current (fourth quarter 2015) Past (first quarter 2014)
Crude oil price, average Low (42 $/barrel) High (100 $/barrel)
Electricity, ¢/kwh 3.78 7.766
Natural gas, $/MM Btu 2.360 5.15
Ethane, ¢/lb 5.805 11.44
Propane, ¢/lb 9.823 30.78
Isobutane, ¢/lb 13.33 30.78
n-Butane, ¢/lb 12.17 28.53
Natural gasoline, ¢/lb 17.33 48.52
Mixed NGLs, ¢/lb Determined by fractionator Determined by fractionator
Table 3.4 Variable costs of C2+ NGL recovery by process for Rich B feed gas—Low crude oil price case
Feedstock consumption (per lb C2+ NGL)
Gas shrinkage, MMBtu 0.023103 0.021678 0.021408
Molecular sieves, lb 0.000227 0.000208 0.000201
Utility consumption (per lb C2+ NGL)
Electricity (kWh) 0.133 0.115 0.121
Natural gas (MMBtu) 516 471 455
Variable costs (¢/lb C2+ NGL)
Raw materials 5.47 5.14 5.12
Utilities 0.62 0.54 0.57
Total variable costs 6.07 5.68 5.64

Table 3.5 Variable costs of C3+ NGL recovery by process for Rich B feed gas—Low crude oil price case
Natural gas (MMBtu) 1,220 1,080 1,320
By-products
Utilities 1.00 0.95 1.08
Variable costs of rejecting ethane by turboexpansion are seen comparing Tables 3.4 and 3.5 to be higher
than when recovering ethane mainly due to higher natural gas consumption needed to fire the demethanizer
reboiler to drive the ethane overhead. Electricity consumption, mainly for driving the sales gas compressor,
is slightly higher. The variable costs of the turboexpansion processes generally decrease with increasing
capital cost due increasing efficiency. Utility consumption is slightly higher with the RSV turboexpansion
process than the other two turboexpansion processes when rejecting ethane even though raw material
consumption was lower.
Variable costs when raw materials, utilities and products are valued at first quarter 2014 prices when crude
oil was about 100 $/barrel while holding capital costs constant are shown in Tables 3.6 and 3.7. When
valued at 100 $/barrel crude oil prices, the trends are similar to those with 42 $/barrel crude oil prices.
Table 3.6 Variable costs of C2+ NGL recovery by process for Rich B feed gas—100 $/barrel crude oil price
case
Natural gas (MMBtu) 516 471 455
Raw materials 11.92 11.18 11.05
Utilities 1.30 1.13 1.17

Table 3.7 Variable costs of C3+ NGL recovery by process for Rich B feed gas—100 $/barrel crude oil price
case
Raw materials 11.19 11.08 10.92
By-products
Utilities 2.09 1.99 2.27
The effect of feed gas composition on unit consumption and variable costs for the turboexpansion processes
is shown in the following tables. Costs are estimated using the fourth quarter 2015 prices only. Tables 3.8
and 3.9 show costs of C2+ NGL recovery (ethane recovery) and C3+ NGL recovery (ethane rejection case),
respectively, for the four feed gas compositions using conventional turboexpansion process; Tables 3.10
and 3.11 show the similar costs using GSP turboexpansion process; and Tables 12 and 13 show the similar
costs using RSV turboexpansion process
Table 3.8 Variable costs of C2+ NGL recovery by feed gas using conventional turboexpansion—Low crude
oil price case
Gas shrinkage, MMBtu 0.021741 0.023103 0.021348 0.021790
Molecular sieves, lb 0.000239 0.000227 0.000253 0.000753
Electricity (kWh) 0.13 0.133 0.124 0.466
Natural gas (MMBtu) 542 516 574 1,710
Raw materials 5.15 5.47 5.06 5.2
By-products
Utilities 0.62 0.62 0.61 2.16
Total variable costs 5.77 6.07 5.67 7.36

Table 3.9 Variable costs of C3+ NGL recovery by feed gas using conventional turboexpansion—Low crude
oil price case
Electricity (kWh) 0.199 0.188 0.184 0.964
Natural gas (MMBtu) 1,280 1,220 1,160 5,560
Raw materials 5.14 5.14 5.02 5.2
By-products
Utilities 1.05 1.00 0.96 4.95
Table 3.10 Variable costs of C2+ NGL recovery by feed gas using GSP turboexpansion—Low crude oil price
case
Gas shrinkage, MMBtu NA* 0.021678 0.020974 0.021834
Molecular sieves, lb NA* 0.000208 0.000210 0.000700
Electricity (kWh) NA* 0.115 0.111 0.377
Natural gas (MMBtu) NA* 471 477 1,590
Variable costs (¢/lb C2+ NGL) NA*
Raw materials NA* 5.14 4.97 5.21
By-products NA*
Utilities NA* 0.54 0.53 1.79
Total variable costs NA* 5.68 5.50 7.00
*Not available due to process simulation problem
Table 3.11 Variable costs of C3+ NGL recovery by feed gas using GSP turboexpansion—Low crude oil price
case
Electricity (kWh) 0.200 0.185 0.176 0.957
Raw materials 5.1 5.09 5.15 5.18
By-products
Utilities 1.04 0.95 0.93 4.92

Table 3.12 Variable costs of C2+ NGL recovery by feed gas using RSV turboexpansion—Low crude oil price
case
Electricity (kWh) 0.120 0.121 0.142 0.431
Natural gas (MMBtu) 449 455 600 1,520
Raw materials 5.15 5.07 5.50 5.20
By-products
Utilities 0.56 0.57 0.68 1.99
Table 3.13 Variable costs of C3+ NGL recovery by feed gas using RSV turboexpansion—Low crude oil price
case
Electricity (kWh) 0.224 0.205 0.205 1.130
Raw materials 5.11 5.02 5.04 5.13
By-products
Utilities 1.19 1.08 1.03 5.64
As seen above comparing processes at constant feed gas, the variable costs of ethane rejection are higher
for all four feedstocks than when recovering ethane. Except for the Lean feed gas, utility costs are
essentially independent of the NGL content for the three rich feedstocks. Variable costs of processing the
Lean feed gas are much higher since the NGL yield is very low.
Production costs
The following tables are based on one feed gas, Rich B. Each plant is sized to process 100 million scfd of
pretreated, dry feed gas at 0.95 stream factor. The capital costs are held constant at the current values (fourth
quarter 2015) since each plant contains equipment necessary to either recover or reject ethane. Table 3.14
summarizes the production costs estimated using current feedstock, utilities and product values for the three
turboexpander NGL recovery processes when ethane is recovered (C2+ NGL produced). Table 3.15
summarizes these processes when ethane is rejected (C3+ NGL produced). Similarly, Tables 3.16 and 3.17
summarize the cases for ethane recovery or rejection under 100 $/barrel oil (first quarter 2014) values.

Table 3.14 Production costs of C2+ NGL recovery by process for Rich B feed gas—Low crude oil price case
Production costs (¢/lb C2+ NGL)
Variable costs 6.07 5.68 5.64
Maintenance materials, 3%/yr of BLI 0.28 0.26 0.27
Operating supplies, 10% of operating labor 0.04 0.04 0.04
Operating labor, 3/shift, $48.20/hr 0.41 0.38 0.36
Maintenance labor, 3%/yr of BLI labor costs 0.28 0.26 0.27
Control lab labor, 20% of operating labor 0.08 0.08 0.07
Total labor cost 0.77 0.71 0.70
Total direct costs 7.16 6.69 6.65
Plant overhead, 80% of labor costs 0.62 0.57 0.56
Taxes and insurance, 2%/yr of TFC 0.27 0.25 0.26
Plant cash costs 8.05 7.52 7.47
Depreciation, 10%/yr of TFC 1.33 1.27 1.31
Plant gate costs 9.38 8.78 8.78
G&A, sales, research, 5% of product value 0.60 0.56 0.57
Net production cost 9.98 9.35 9.35
ROI before taxes, 15%/yr of TFC 2.00 1.90 1.96
Product value 11.98 11.25 11.31
Table 3.15 Production costs of C3+ NGL recovery by process for Rich B feed gas—Low crude oil price case
Production costs (¢/lb C3+ NGL)
G&A, sales, resarch, 5% of product value 0.80 0.75 0.76
Product value 16.08 14.90 15.15
Comparing the net production values shown in Tables 3.14 and 3.15, the trends shown above in variable
costs generally hold for variation in the net production costs between the turboexpansion processes. That is

net production costs are higher when rejecting ethane than when recovering it. Increasing efficiency of
more complex process designs results in costs generally decreasing with increasing capital investment.
Besides the variable cost effects, production costs are additionally higher per pound of NGL produced when
recovering ethane than when not, due to the lower yield of C3+ NGL when rejecting ethane compared with
C2+ NGL production when recovering ethane. Operating labor is constant at three operators per shift in all
cases. General, administrative, and research and development expenses are assumed to equal 5% of NGL
product value. These trends also hold when valuing the feed gas, utilities and product values occurring
when crude oil was 100 $/barrel (first quarter 2014) as seen in Tables 3.16 and 3.17.
Table 3.16 Production costs of C2+ NGL recovery by process for Rich B feed gas—100 $/barrel crude oil
price case
Production costs, ¢/lb C2+ NGL
Product value 19.51 18.23 18.23

Table 3.17 Production costs of C3+ NGL recovery by process for Rich B feed gas—100 $/barrel crude oil
price case
Product value 23.60 22.30 22.61
The effect of feed gas composition on NGL recovery production costs using fourth quarter 2015 prices is
shown in the following tables. Table 3.18 presents the costs of recovering ethane in the NGL produced by
conventional turboexpansion; ethane rejection by this process is presented in Table 3.19. The production
costs for the GSP and RSV processes are similarly shown in Tables 3.20 and 3.21 and Tables 3.22 and 3.23,
respectively.

Table 3.18 Production costs of C2+ NGL recovery by feed gas using conventional turboexpansion—Low
crude oil price case
Location US Gulf Coast US Gulf Coast US Gulf Coast US Gulf Coast
Capacity, MT/yr (MM lb/yr) NGLs 132,000 (292) 139,000 (307) 125,000 (275) 42,000 (93)
Variable costs 5.77 6.07 5.67 7.36
Maintenance materials, 3%/yr of BLI 0.29 0.28 0.31 0.92
Operating supplies, 10% of operating labor 0.04 0.04 0.05 0.14
Operating labor, 3/shift, $48.20/hr 0.43 0.41 0.46 1.37
Maintenance labor, 3%/yr of BLI labor costs 0.29 0.28 0.31 0.92
Control lab labor, 20% of operating labor 0.09 0.08 0.09 0.27
Total labor cost 0.81 0.77 0.86 2.56
Total direct costs 6.91 7.16 6.89 10.98
Plant overhead, 80% of labor costs 0.65 0.62 0.69 2.05
Taxes and insurance, 2%/yr of TFC 0.28 0.27 0.30 0.88
Plant cash costs 7.84 8.05 7.88 13.91
Depreciation, 10%/yr of TFC 1.40 1.33 1.48 4.40
Plant gate costs 9.24 9.38 9.36 18.31
G&A, sales, research, 5% of product value 0.60 0.60 0.61 1.31
Net production cost 9.84 9.98 9.97 19.62
ROI before taxes, 15%/yr of TFC 2.09 2.00 2.22 6.60
Product value 11.93 11.98 12.19 26.22
Table 3.19 Production costs of C3+ NGL recovery by feed gas using conventional turboexpansion—Low
crude oil price case
Variable costs 6.19 6.14 5.98 10.15
Total labor cost 1.28 1.33 1.18 7.73
Plant cash costs 9.46 9.54 8.98 29.89
Plant gate costs 11.66 11.84 10.99 43.16
Product value 15.75 16.08 14.75 66.38

Table 3.20 Production costs of C2+ NGL recovery by feed gas using GSP turboexpansion—Low crude oil
price case
Capacity, MT/yr (MM lb/yr) NGLs NA* 152,000 (335) 150,000 (332) 45,200 (100)
Variable costs NA* 5.68 5.50 7.00
Maintenance materials, 3%/yr of BLI NA* 0.26 0.26 0.87
Operating supplies, 10% of operating labor NA* 0.04 0.04 0.13
Operating labor, 3/shift, $48.20/hr NA* 0.38 0.38 1.27
Maintenance labor, 3%/yr of BLI labor costs NA* 0.26 0.26 0.87
Control lab labor, 20% of operating labor NA* 0.08 0.08 0.25
Total labor cost NA* 0.71 0.72 2.40
Total direct costs NA* 6.69 6.52 10.39
Plant overhead, 80% of labor costs NA* 0.57 0.57 1.92
Taxes and insurance, 2%/yr of TFC NA* 0.25 0.26 0.85
Plant cash costs NA* 7.52 7.35 13.16
Depreciation, 10%/yr of TFC NA* 1.27 1.28 4.27
Plant gate costs NA* 8.78 8.63 17.43
G&A, sales, research, 5% of product value NA* 0.56 0.56 1.25
Net production cost NA* 9.35 9.18 18.69
ROI before taxes, 15%/yr of TFC NA* 1.90 1.92 6.40
Product value NA* 11.25 11.11 25.09
Table 3.21 Production costs of C3+ NGL recovery by feed gas using GSP turboexpansion—Low crude oil
price case
Variable costs 6.14 6.04 6.08 10.10
Total labor cost 1.26 1.15 1.11 5.87
Plant cash costs 9.38 9.01 8.95 25.20
Plant gate costs 11.62 11.07 10.94 34.64
Product value 15.77 14.90 14.65 54.02

Table 3.22 Production costs of C2+ NGL recovery by feed gas using RSV turboexpansion—Low crude oil
price case
Variable costs 5.71 5.64 5.73 7.19
Total labor cost 0.70 0.70 0.89 2.36
Plant cash costs 7.54 7.47 8.05 13.33
Plant gate costs 8.83 8.78 9.70 17.69
Product value 11.34 11.31 12.81 25.52
Table 3.23 Production costs of C3+ NGL recovery by feed gas using RSV turboexpansion—Low crude oil
price case
Variable costs 6.30 6.10 6.07 10.77
Total labor cost 1.24 1.15 1.13 5.97
Plant cash costs 9.52 9.09 9.01 26.31
Plant gate costs 11.81 11.21 11.11 37.37
Product value 16.05 15.15 15.00 56.79

Comparing the effect of feed gas on net production costs for each of the three turboexpander processes
(Tables 3.18 to 3.23), the trend is consistent with the trend in variable costs. Net production costs of
recovering ethane are lower for each feed gas then for rejecting ethane from the NGL.
Net production costs appear to have weak dependency on the feed gas composition except for the lean feed
gas, which has a strong dependency. Among the three rich feed gases, the conventional turboexpansion
process does not show a trend with feed gas for either ethane recovery or rejection (Tables 3.18 and 3.19).
Both the GSP and RSV processes only show a weak trend, each with an exception in feed gas richness
(Tables 3.20 to 3.23).
NGL fractionation
Fractionation separates mixed NGL feedstock into its lighter component parts on the basis of relative
volatility. NGL fractionation provides value by making marketable products of higher value than the
mixture.
The number of fractionation columns in a fractionation plant depends upon the feedstock composition and
the quality and number of products to be produced. We chose to evaluate a fundamental fractionation train
consisting of four towers to produce ethane, propane, isobutane, n-butane, and C5+ natural gasoline. The
first four products are produced at 95% or better purity. Column conditions were chosen to provide cut
points that met the impurity levels of the typical specifications listed in Appendix B.
A generic fractionation plant designed by PEP and incorporated into the recovery units evaluated in PEP
Reports 135 and 135A was the basis for the process. The plant has a capacity of 700,000 gal/day (16,666
B/D) of mixed NGL or 116,081 lb/hr at on stream factor of 0.95 and NGL density of 4.0 lb/gal. This rate is
within the range of fractionators shown in Section 4, Figure 4.13 but at the small end. However, this rate is
approximately twice the production of NGL from the turboexpander plants evaluated earlier in this section.
The capacity at half the base capacity is approximately equivalent to a unit dedicated to those plants.
Referring to the process block diagram, Figure 2.12, the NGL mix from one or more extraction plants is
heated to about 38°C (100°F) by exchange with the natural gasoline product stream. If additional heating
is required, the n-butane product stream could be exchanged before the gasoline exchanger. The NGL mix
is deethanized with reboiler heated by hot oil providing vapor for the distillation. Ethane is taken overhead
and totally condensed by heat exchange with propane refrigerant. A portion of the ethane is returned as
reflux to exchanger. Ethane product from the overhead receiver is shipped to a pipeline. Bottoms from the
deethanizer are depropanized after pressure reduction. Again a hot oil reboiler is used. The propane
overhead is totally condensed in an air cooler with a portion returned to the depropanizer as reflux. The
remaining propane is product. The bottoms from the depropanizer are reduced in pressure and charged to
the debutanizer.
At the debutanizer, a portion of the bottoms are vaporized in a reboiler that is heated by hot oil. The
remaining debutanizer bottoms are the natural gasoline product that maybe exchanged with the plant feed.
Mixed butanes flow overhead and are totally condensed by an air cooler. A portion of the C4s is returned
to the debutanizer as reflux. The remainder of the mixed butanes is charged to the butane splitter. Isobutane
flows overhead while n-butane flows to the bottom where some is heated in hot oil reboiler and the rest
pumped to product storage. Isobutane from an overhead receiver is pumped to storage.
Capital costs
A generic fractionation plant designed by PEP reported in PEP Report 135, Natural Gas Liquids (1979)
and used in PEP Report 135A, Natural Gas Liquids (2001) was the basis for the process. The plant capacity
is 700,000 gal/day of mixed NGLs or 116,081 lb/hr (966 million lb/yr) with a stream factor of 0.95. The

fractionation train consisting of four towers to produce ethane, propane, isobutane, n-butane, and C5+
natural gasoline. The first four products are produced at 95% or better purity.
A summary of the capital costs of fractionating NGLs is presented in Table 3.24. The capital investments
are based on these assumptions:
• PEP Cost Index of 1107 (fourth quarter 2015).
• Stream factor of 0.95.
• US Gulf Coast location.
• Mixed NGL feed rate is 116,081 lb/hr, independent of the source feed gas or NGL recovery process.
• The plant contains the major equipment necessary to fractionate NGL made when either recovering or
rejecting ethane.
Table 3.24 Capital cost of NGL fractionation process

Process NGL fractionation
Base year Fourth quarter 2015
PEPCOST Index 1107
Stream factor 0.95
Location US Gulf Coast
Capacity, (MM lb/yr mixed NGLs feed) 966.0
Investment (US$ millions)
Battery limit (BLI) 27.456
Offsite 17.839
Total fixed capital (TFC) 45.296
Capital intensity, $/lb NGL/yr feed 0.047
Unit consumption and variable costs
to process 116,081 lb/hr of mixed NGLs feed at 0.95 stream factor.
Table 3.25 summarizes the unit consumption and variable costs estimated using current (fourth quarter
2015) feedstock, utilities, and product values (Table 3.3) for the three turboexpander NGL recovery
processes when ethane is recovered (C2+ NGL produced). The refrigeration-based process does not recover
ethane. Table 3.26 summarizes these processes plus the refrigeration-based process when ethane is rejected
(C3+ NGL produced). The refrigeration-based process produces a low heating value by-product natural gas
stream when designed for rich feedstocks. Similarly, Tables 3.27 and 3.28 summarize the cases under 100
$/barrel oil (first quarter 2014) values.

Table 3.25 Variable costs of fractionation of Rich B C2+ NGL—Low crude oil price case
Feedstock consumption (per lb propane)
Mixed NGL feedstock 2.77726 2.997570 3.097310
By-products
Ethane -0.874895 -1.106060 -1.204680
Isobutane -0.177620 -0.175520 -0.175276
n-Butane -0.427878 -0.422518 -0.421794
Natural gasoline -0.284063 -0.280310 -0.279684
Utility consumption (per lb propane)
Electricity (kWh) 0.0702 0.1060 0.1050
Variable costs (¢/lb propane)
By-products -17.58 -18.76 -19.31
Utilities 0.70 0.85 0.85
Table 3.26 Variable costs of Rich B C3+ NGL fractionation—Low crude oil price case
By-products
Isobutane -0.22348 -0.17935 -0.16976
n-Butane -0.55255 -0.43272 -0.40861
Electricity (kWh) 0.1080 0.0811 0.0772
Raw materials 21.42 18.37 17.75
By-products -16.28 -12.66 -11.92
Utilities 0.78 0.62 0.59

Table 3.27 Variable costs of Rich B C2+ NGL fractionation—100 $/barrel crude oil price case
By-products
Ethane -0.874895 -1.106060 -1.204680
Isobutane -0.177620 -0.175520 -0.175276
n-Butane -0.427878 -0.422518 -0.421794
Electricity (kWh) 0.0702 0.1060 0.1050
Raw materials 65.07 66.61 67.55
By-products -41.36 -43.6 -44.67
Utilities 1.49 1.81 1.81
Table 3.28 Variable costs of Rich B C3+ NGL fractionation—100 $/barrel crude oil price case
By-products
Ethane
Isobutane -0.223483 -0.179350 -0.169757
n-Butane -0.552551 -0.432723 -0.408610
Electricity (kWh) 0.1080 0.0811 0.0772
Raw materials 65.54 57.13 55.42
By-products -40.94 -31.77 -29.93
Utilities 1.64 1.30 1.25
The effect of feed gas composition on unit consumption and variable costs for the fractionation of mixed
NGLs produced by the three turboexpander processes is shown in the following tables. Costs are estimated
using the fourth quarter 2015 prices only. Tables 3.29 and 3.30 show costs of C2+ NGL fractionation and
C3+ NLG fractionation of NGLs produced by the conventional turboexpansion process. Similarly, Tables
3.31 and 3.32 and Tables 3.33 and 3.34 show costs of fractionation of NGLs produced by GSP and RSV
processes, respectively.

Table 3.29 Variable costs of fractionation of C2+ NGL by conventional turboexpansion—Low crude oil price
case
Mixed NGL feedstock 3.20118 2.77726 3.84935 6.311490
By-products
Isobutane -1.582700 -0.874895 -0.897732 -3.680300
n-Butane -0.151536 -0.177620 -0.392260 -0.173282
Natural gasoline -0.265733 -0.427878 -0.419386 -0.160668
Electricity (kWh)
Natural gas (MMBtu) 0.0865 0.0702 0.1440 0.0581
Raw materials 21.07 21.76 36.82 45.70
By-products -17.62 -17.58 -34.87 -47.58
Utilities 0.72 0.70 1.11 0.80
Total variable costs 4.17 4.88 3.06 -1.08
Table 3.30 Variable costs of fractionation of C3+ NGL by conventional turboexpansion—Low crude oil price
case
By-products
Isobutane -0.154751 -0.223483 -0.420955 -0.261495
n-Butane -0.291821 -0.552551 -0.453340 -0.258599
Electricity (kWh) 0.0649 0.1080 0.1310 0.0928
Raw materials 15.42 21.42 35.61 48.90
By-products -9.18 -16.28 -32.22 -46.51
Utilities 0.49 0.78 0.94 0.69

Table 3.31 Variable costs of fractionation of C2+ NGL by GSP turboexpansion—Low crude oil price case
Mixed NGL feedstock NA* 2.997570 4.492990 7.184560
By-products
Ethane NA* -1.106060 -1.527480 -4.405340
Isobutane NA* -0.175520 -0.382335 -0.183202
n-Butane NA* -0.422518 -0.407532 -0.169710
Natural gasoline NA* -0.280310 -1.080350 -1.340910
Electricity (kWh) NA* 0.1060 0.1370 0.0758
Natural gas (MMBtu) NA* 1,900 2,620 2,560
Raw materials NA* 22.40 38.51 49.91
By-products NA* -18.76 -37.65 -53.32
Utilities NA* 0.85 1.14 0.89
Total variable costs NA* 4.49 2.00 -2.52
Table 3.32 Variable costs of fractionation of C3+ NGL by GSP turboexpansion—Low crude oil price case
By-products
Isobutane -0.139852 -0.179350 -0.371021 -0.148418
n-Butane -0.257957 -0.432723 -0.395911 -0.137789
Electricity (kWh) 0.0558 0.0811 0.0619 0.0480
Natural gas (MMBtu) 947 1,310 935 873
Raw materials 14.53 18.37 34.47 27.57
By-products -8.10 -12.66 -28.00 -22.41
Utilities 0.43 0.62 0.45 0.39

Table 3.33 Variable costs of fractionation of C2+ NGL by RSV turboexpansion—Low crude oil price case
Feedstock consumption (per lb propane) 3.664750 3.097310 3.571280 7.184560
Mixed NGL feedstock
By-products -2.064090 -1.204680 -0.768152 -4.525410
Isobutane -0.144909 -0.175276 -0.365740 -0.175280
n-Butane -0.253575 -0.421794 -0.389767 -0.162716
Electricity (kWh) 0.0932 0.1050 0.1370 0.0756
Raw materials 20.70 22.81 34.47 49.43
By-products -18.09 -19.31 -31.97 -52.83
Utilities 0.77 0.85 1.06 0.88
Total variable costs 3.38 4.35 3.56 -2.52
Table 3.34 Variable costs of fractionation of C3+ NGL by RSV turboexpansion—Low crude oil price case
By-products
Isobutane -0.138559 -0.169757 -0.359491 -0.145653
n-Butane -0.242561 -0.408610 -0.383051 -0.135193
Electricity (kWh) 0.0532 0.0772 0.1090 0.0336
Natural gas (MMBtu) 912 1,260 1,660 861
Raw materials 15.49 17.75 31.13 27.21
By-products -9.00 -11.92 -27.03 -21.94
Utilities 0.42 0.59 0.80 0.33
Production costs
to process 116,081 lb/hr of mixed NGLs feed at 0.95 stream factor. Table 3.35 summarizes the unit
consumption and variable costs estimated using current (fourth quarter 2015) feedstock, utilities and
product values (Table 3.4) for the three turboexpander NGL recovery processes when ethane is recovered
(C2+ NGL produced). The refrigeration-based process does not recover ethane. Table 3.36 summarizes
these processes plus the refrigeration-based process when ethane is rejected (C3+ NGL produced). The
refrigeration-based process produces a low heating value by-product natural gas stream when designed for
rich feedstocks. Similarly, Tables 3.37 and 3.38 summarize the cases using 100 $/barrel oil (first quarter
2014) values.

Table 3.35 Production costs of C2+ NGL fractionation for Rich B feed gas—Low crude oil price case
Capacity, MT/yr (MM lb/yr) propane 158,000 (348) 146,000 (322) 141,000 (312)
Production costs, ¢/lb propane
Product value, ¢/lb propane 9.82 9.82 9.82
Feedstock value, ¢/lb NGL 7.835 7.473 7.365
Table 3.36 Production costs of C3+ NGL fractionation for Rich B feed gas—Low crude oil price case

Table 3.37 Production costs of C2+ NGL fractionation for Rich B feed gas—100 $/barrel crude oil price case
Table 3.38 Production costs of C3+ NGL fractionation for Rich B feed gas—100 $/barrel crude oil price case
Capacity, MT/yr (MM lb/yr) propane 203,000 (448) (508.275) (522.289)

The effect of feed gas composition on NGL fractionation production costs using fourth quarter 2015 prices
is shown in the following tables. Table 3.39 presents the costs of fractionating C2+ NGLs produced by
conventional turboexpansion; fractionation of ethane rejected NGLs (C3+ NGL) by this process is presented
in Table 3.40. The production costs for fractionating the GSP and RSV produced NGLs are similarly shown
in Tables 3.42 and 3.42 and Tables 3.43 and 3.44, respectively.
Table 3.39 Production costs of C2+ NGL fractionation by conventional turboexpansion—Low crude oil price
case
Capacity, MT/yr (MM lb/yr) propane 137,000 (302) 158,000 (348) 114,000 (251) 69,400 (153)
Variable costs 4.17 4.88 3.06 -1.08
Operating supplies, 10% of operating 0.03 0.02 0.03 0.06
labor
Maintenance labor, 3%/yr of BLI labor 0.27 0.24 0.33 0.54
costs
Total labor cost 0.56 0.49 0.69 1.12
Plant cash costs 5.78 6.28 5.02 2.13
Plant gate costs 7.28 7.58 6.82 5.09
Product value, ¢/lb propane 9.82 9.82 9.82 9.82
Feedstock value, ¢/lb NGL 6.582 7.835 9.565 7.240

Table 3.40 Production costs of C3+ NGL fractionation by conventional turboexpansion—Low crude oil price
case
Variable costs 6.73 5.92 4.33 3.08
Operating supplies, 10% of operating 0.01 0.02 0.03 0.03
labor
Total labor cost 0.30 0.38 0.54 0.68
Plant cash costs 7.58 7.00 5.88 5.02
Plant gate costs 8.36 8.01 7.33 6.81
Table 3.41 Production costs of C2+ NGL fractionation by GSP turboexpansion—Low crude oil price case
Capacity, MT/yr (MM lb/yr) propane NA* 146,000 (322) 97,500 (215) 61,000 (134)
Variable costs NA* 4.49 2.00 -2.52
Maintenance materials, 3%/yr of BLI NA* 0.26 0.38 0.61
Operating supplies, 10% of operating labor NA* 0.03 0.04 0.06
Operating labor, 3/shift, $48.20/hr NA* 0.26 0.39 0.63
Maintenance labor, 3%/yr of BLI labor costs NA* 0.26 0.38 0.61
Control lab labor, 20% of operating labor NA* 0.01 0.02 0.03
Total labor cost NA* 0.53 0.79 1.27
Total direct costs NA* 5.31 3.21 -0.58
Plant overhead, 80% of labor costs NA* 0.42 0.63 1.02
Taxes and insurance, 2%/yr of TFC NA* 0.28 0.42 0.67
Plant cash costs NA* 6.01 4.26 1.11
Depreciation, 10%/yr of TFC NA* 1.41 2.11 3.37
Plant gate costs NA* 7.42 6.37 4.48
G&A, sales, research, 5% of product value NA* 29.00 0.29 0.29
Net production cost NA* 7.71 6.66 4.77
ROI before taxes, 15%/yr of TFC NA* 2.11 3.16 5.05
Product value, ¢/lb propane NA* 9.82 9.82 9.82
Feedstock value, ¢/lb NGL NA* 7.473 8.571 6.947

Table 3.42 Production costs of C3+ NGL fractionation by GSP turboexpansion—Low crude oil price case
Variable costs 6.89 6.33 6.92 5.55
Maintenance labor, 3%/yr of BLI labor 0.14 0.16 0.13 0.20
costs
Total labor cost 0.29 0.34 0.28 0.42
Plant cash costs 7.68 7.30 7.71 6.76
Plant gate costs 8.42 8.19 8.04 7.86
Table 3.43 Production costs of C2+ NGL fractionation by RSV turboexpansion—Low crude oil price case
Variable costs 3.38 4.35 3.56 -2.52
Total labor cost 0.65 0.54 0.63 1.27
Total direct costs 4.37 5.18 4.52 -0.58
Plant cash costs 5.23 5.90 5.35 1.11
Plant gate costs 6.95 7.35 7.02 4.48

Table 3.44 Production costs of C3+ NGL fractionation by RSV turboexpansion—Low crude oil price case
Variable costs 6.91 6.42 4.90 5.60
Total labor cost 0.28 0.33 0.49 0.41
Plant cash costs 7.70 7.36 6.30 6.78
Plant gate costs 8.43 8.23 7.59 7.88

4 Market overview
NGL markets are fragmented and complex. The upstream, midstream and downstream NGL businesses are
very reliant upon each other. Market forces for the US midstream industry are controlled by forces and
factors beyond its control—crude oil and natural gas production, petrochemical feedstock demand and
petroleum refining supply and demand. NGL markets are driven by supply, not demand. NGLs are a by-
product of oil and gas production, the main supply source. Petroleum refining essentially supplies the
balance. Each NGL product has its own supply-demand characteristics. When oil prices are higher than
natural gas prices, NGL production is more profitable since NGL prices track oil prices [18, 20].
Future developments in the midstream industry will depend upon when and how far crude oil prices recover
from the 2015 drop from above 100 $/barrel to less than 40 $/barrel and how quickly US exploration
companies resume shale field drilling. Of concern is how much oil supply will increase before another
supply surplus causes another crude oil price drop [20].
Natural gas, the major source of NGLs (60% of global NGLs and approximately 75% of US NGLs in 2012
[37]), has become the fuel of choice for reducing atmospheric emissions of CO2 and other air pollutants
compared with fuel oil and coal as shown in Table 4.1.
Table 4.1 Air pollutant emissions, lb per billion Btus

a b c d
Pollutant Natural gas LPG Fuel oil Coal
Carbon dioxide 117,000 138,500 164,000 208,000
Carbon monoxide 40 33 208
Nitrogen oxides 91 112 448 457
Particulates 7.0 84 2744
a
Pipeline quality gas burned in uncontrolled residential gas burners.
b
Commercial LPG; 1968 L/t density, 49.29 GJ/t gross heating value.
c
No. 6 fuel oil at 6.287 million Btu/B; 1.03% sulfur without post combustion pollutant removal.
d
Bituminous coal at 12,027 Btu/lb, 1.64% sulfur without post combustion pollutant removal.
Source: [7, 24] © 2016 IHS
Demand for NGLs is affected by a number of diverse factors besides supply. Demand factors include:
• Price of natural gas in competitive fuel and petrochemical feedstock markets
• Growth of the economy
• Environmental regulations
• Plant location
• Energy conservation programs
• Weather [16]
Natural gas-based petrochemicals in the United States are forecast to maintain a price advantage over
European oil (naphtha)-based petrochemicals [10]. NGLs are feedstock for almost 95% of the ethylene
produced in North America. Naphtha is the feedstock for 70% of ethylene produced in Europe [40].
The massive increase in NGL production from shale sources in the United States and Canada is changing
global NGL trade patterns. Since 2012, the United States became a net exporter of propane, LPG and ethane.

Global NGL supply and demand
The market for NGLs is substantial yet much smaller than the market for refined petroleum products. Global
crude oil and gas plant natural gas liquids supply in 2012 was about 86 MMB/D. Gas plant production of
NGL, including LPG, was about 9.4 MMB/D or about 11% of the total world crude oil plus gas plant NGLs
production. In the United States, gas plant NGLs comprised about 27% of total crude oil (6.5 MMB/D) and
NGL production (2.4 MMB/D) [115].
Figures 4.1 and 4.2 show recent worldwide supply and demand history by region. World demand for NGLs
totaled 410.0 MMT in 2015, about 93.58% of the 438.1 MMT supply. Demand grew an average of 3.43%/yr
from 346.3 MMT in 2010. Supply grew an average of 3.79%/yr from 363.7 MMT in 2010.
Figure 4.1 NGL supply by region
500,000
450,000
400,000
350,000
Thousand metric tons
300,000
250,000
200,000
150,000
100,000
50,000
0
2010 2011 2012 2013 2014 2015
Middle East North America Latin America
Europe Far East Southeast Asia/Pacific
Africa CIS Indian Subcontient

Figure 4.2 Worldwide demand for NGL by region
450,000
400,000
350,000 Africa
Latin America
300,000
1,000 metric tons
Indian Subcontinent
250,000
South East Asia & Pacific
200,000 Far East
CIS
150,000
Middle East
100,000 Europe
50,000 North America
0
2010 2011 2012 2013 2014 2015
Supply
While worldwide natural gas processing supplies about 60% of NGLs, in the United States, natural gas is
the source of about 74%. US refineries supply 20% and imports balance the rest.
North America is the largest supplier region (134.72 MMT in 2015) followed closely by the Middle East
(130.08 MMT). Supply exceeded regional demand in the Middle East by 70.23 MMT, making it the largest
exporter of NGLs in 2015. Exports from North America totaled 21.80 MMT in 2015, up from only 1.49
MMT in 2010 before the growth and wide application of fracking technology. Average annual rate of supply
growth from 2010 to 2015 was 6.51%/yr in North America, whereas the Middle East grew 4.67%/yr.
European supply actually decreased 2.43%/yr from 30.93 MMT to 27.36 MMT. The supply in both the Far
East (36.08 MMT) and Europe (27.36 MMT) was far less than demand making these two regions the largest
importers of NGLs (28.68 MMT and 28.18 MMT, respectively).
Technically recoverable shale gas reserves are found in Asia, North America, South America, Africa,
Australia and Eastern Europe (Table 4.2). Only three of the top ten countries with proven shale gas reserves
are also among the top ten countries having proven natural gas reserves [16].

Table 4.2 Top 10 countries with technically recoverable shale gas reserves
Country Shale reserves, tcf Natural gas reserves, tcf
China 1.115
Argentina 802
Algeria 707 159.1
US 665 345
Canada 573
Mexico 545
Australia 437
South Africa 390
Russia 285
Brazil 245
Source: [16] © 2016 IHS
North American shale oil and gas fields show variability in NGL content both between fields and within
fields (Table 4.3) [39]. Transportation fees also vary considerably among the fields depending upon the
distance to market hubs. The largest four formations—Marcellus (New England), Barnet (Texas),
Fayetteville (Arkansas), and Haynesville (Louisiana-Texas)—produce two-thirds of all US shale gas from
over 30,000 wells [11].
Table 4.3 NGL characteristics of North American shale gas and oil fields
Field Character NGL content, GPM
Bakken (North Dakota) Oil shale: 4.0 to 9.0
Woodford Shale (Oklahoma) Pockets of rich and lean gas
Barnett (North Central Texas) Pockets of rich and lean gas 2.5 to 3.5
Fayetteville Shale (Arkansas) Very dry gas
Green River (Colorado) Oil shale: 3.0 to 5.0
Horn River (Canada) Some liquids content
Eagle Ford Shale (South Texas) Extremely rich pockets Oil and gas shale: 4.0 to 9.0
Marcellus (Northeast US) Likely rich and lean pockets Rich: 4.0 to 9.0
Sources: [18, 37] © 2016 IHS
Forecasts of shale gas production are very difficult to make and very uncertain. Uncertainties include
rapidly evolving technologies and how tightly wells can be placed before significantly interfering with each
other [11]. The US Energy Information Administration (EIA)’s projections that US gas production will
increase for decades are based on coarse-resolution grid (by counties) studies of major formations and may
be over estimating production. Analysis of the fields in greater detail (one square mile resolution) indicates
the formations are relatively heterogeneous with small areas of higher profit potential [11].
In the EIA’s latest “reference case” forecast, the big four fields have rapidly rising production until 2020
and then plateau for at least 20 years [113]. Since producing companies produce the high economic potential
areas first, future wells may be less productive than current production.
The massive increase in NGL production from shale sources in the United States and Canada is changing
global NGL trade patterns. The United States became a net exporter of propane in 2012. The United States
has changed from a net importer of LPG to a net exporter of LPG. US ethane exports began in 2014 with
the start-up of two ethane pipelines to Canada (Table 4.4). The first shipments of US ethane to Europe
occurred in March 2016 with a shipment to Norway [29; 30].

Table 4.4 Major importers of US ethane

Importer Destination
Nova Chemicals Joffre, Alberta, Canada
Ontario, Canada
SABIC England
Ineos Scotland
Norway
Boreolis Sweden
Reliance India
Braskem Brazil
Source: [33] © 2016 IHS
LPG from Africa that previously went to the United States is now being exported to Europe and Asia. In
the near term, US LPG is mostly exported to Latin America, but increasing amounts are forecast to be
exported to Europe and Asia. LPG production growth from North America, the Middle East, and China
will ultimately need to be consumed in Asia.
Demand
In 2015, worldwide demand for NGL totaled 409.97 million metric tons. Total demand for LPG was 286.12
MMT. Demand for ethane, propane, and butane, respectively, totaled 65.01, 156.50, and 129.62 MMT.
North America has the largest overall demand for NGLs followed by the Far East (Table 4.5). The Middle
East has a large demand for ethane and NGL. European demand is high for propane, butane, and LPG. The
fastest demand growth rates from 2014 were 5.90%/yr in the Middle East and 4.50%/yr in the Far East.
Table 4.5 World NGL demand by region—2015

Region Ethane Propane Butane LPG NGL
1,000 MT 1,000 MT 1,000 MT 1,000 MT 1,000 MT
North America 28,700 41,722 21,585 63,307 112,795
Europe 894 19,857 16,496 36,352 55,532
Commonwealth of Independent States 745 6,587 4,154 10,741 11,686
Middle East 24,603 15,312 11,357 26,668 59,844
Far East -0- 31,964 32,723 64,686 64,759
Southeast Asia/Pacific 3,510 11,109 10,522 21,631 27,736
Indian Subcontinent 1,274 8,545 11,903 20,448 22,372
Latin America 3,265 19,694 11,196 30,891 41,846
Africa 323 1,710 9,686 11,396 13,267
World Total 65,008 156,499 129,622 286,122 409,965
Ethane
Globally ethane is most often left in domestic natural gas and is not recovered and produced as a
specification product. Worldwide, specification ethane production is estimated to have been about 65.01
MMT in 2015, a compound annual growth rate (CAGR) of about 4.35%/year from the about 52.53 MMT
produced in 2010. NGL processing plants produce almost 100% of ethane produced in the United States
and Canada [37].
Ethane accounts for about 45 vol% of US NGLs, but its recovery from natural gas is largely discretionary.
US ethane production expanded rapidly with the development of shale gas and tight oil fields. This

increased economical supply led to a surge in planned ethane-based ethane steam cracking plants to produce
ethylene.
Nearly all specification ethane is consumed as feedstock to steam crackers to produce ethylene. Relatively
small amounts are used for the production of other chemicals or as fuel itself. Increased investment in
ethane-based petrochemical plants and export facilities is increasing ethane demand.
The Middle East (24.60 MMT in 2015), United States, and Canada (28.39 MMT) dominate global ethane
demand (65.01 MMT), accounting for over 81% of world consumption [27]. Growth in ethane consumption
from 2010 to 2015 was highest in Asia, 7.73%/yr to 3.51 MMT from a small base of 2.42 MMT in 2010.
Growth was 6.15%/yr in the Middle East and 4.41%/yr in North America.
Until recently, a region’s demand for ethane was entirely met by the region’s supply. Supply limited
consumption growth of ethane in the Middle East was about 6.2%/year from 2010 to 2015. Demand limited
the growth rate of US ethane consumption was about 4.2%/year over this period. With the growth of
fracking in North America, the region produced an excess of 0.31 MMT of ethane in 2015, which was
exported to Europe. European ethane production decreased in 2015 to 1.59 MMT from 1.94 MMT in 2010.
Demand in Europe decreased to 1.89 MMT in 2015, a 0.44%/yr decline.
From 2015 to 2020, global ethane consumption is forecast to grow more than 6%/year driven by US
consumption. US ethane production is expected to rise to 1.4 million B/D in 2017 from 1.1 million B/D in
2015. From 2015 to 2020, Middle East ethane consumption will remain limited by supply to closer to
3%/year [29; 31; IHS].
US demand for ethane is projected to grow at a CAGR of about 8%/year as planned ethylene plants are
built. Increased US ethane supply for the crackers and for export will be obtained by increased ethane
recovery from natural gas. Over the longer term, ethane supply and demand will grow much slower as the
wetter US shale fields mature and US consumption limitation changes from demand to supply. The drop in
crude oil prices starting in 2014 will probably delay construction of a second wave of new ethane crackers
proposed for North America to 2025 unless crude oil prices do not recover by 2020. If the plants are delayed,
ethylene supply would tighten and naphtha-based crackers in Europe and Asia would be more profitable
[13].
Global ethane consumption is very large compared with US ethane exports. US ethane exports (Table 4.4)
are expected to increase as two export terminals were under construction in mid-2015. Some fear exports
of US ethane have the potential to reduce the advantage of US ethane crackers. However, in 2015, an
estimated 10.6 million MT/yr of ethane is estimated have been left in US natural gas due to lack of user
capacity for ethane. The first ethane exports are going to Europe; South America and Asia destinations will
follow.
In Europe, several steam crackers are cracking or are planning to process imported US ethane. Since
overland transportation of ethane is infeasible (except by pipeline), European plants inaccessible by
seagoing ships are unlikely to import ethane. Also the cost of switching steam crackers from naphtha to
ethane is highly site-specific. Plants larger than 500 kilotons per year ethylene production are most likely
to switch because their economy of scale reduces the per-ton conversion cost [34].
INEOS has converted its Grangemouth, Scotland cracker to crack ethane. The Stenungsund, Sweden
cracker of Borealis also cracks imported ethane. Sabic’s Wilton, UK naphtha cracker is being converted to
crack US ethane. A 2016 completion is planned [17]. INEOS also is the biggest holder of UK onshore shale
oil and gas leases, having access to 1 million acres of potential shale gas reserves. INEOS can use shale gas
as both a feedstock and fuel [14].

US ethane exports to India are proceeding. Reliance Industries is building a pipeline to supply its two
400,000 MT/yr of ethylene gas crackers at Nagothane and to supply imported ethane as backup feed to its
naphtha cracker at Hazira. State-owned Gail plans to import up to 1.3 million MT/year of US ethane over
15 years as feed for a planned world-scale cracker in Andhra Pradesh. The cracker will be in a petrochemical
complex jointly owned by Gail and Hindustan Petroleum Corporation [8; 9].
Propane
Figure 4.3 shows the history of world supply and demand for propane. Propane global demand and supply
totaled 156.5 MMT in 2015 with annual average growth rates of 3.17%/yr in supply and 3.43%/yr in
demand since 2010. In 2010, supply totaled 133.9 MMT and demand totaled 132.2 MMT.
Figure 4.3 World propane supply and demand
160,000
155,000
150,000
1,000 metric tons
145,000 Supply
Demand
140,000
135,000
130,000
2009 2010 2011 2012 2013 2014 2015 2016
The largest propane supplying regions are North America (59.29 MMT in 2015) and the Middle East (31.51
MMT). Both regions production considerably exceeded their regional demand, making them the largest
exporters (17.57 MMT from North America and 16.20 MMT from the Middle East). As US propane
production increased rapidly from 2010 to 2015, the United States switched from being a net importer to
the world’s largest propane exporter. North American exports rocketed from 1.19 MMT in 2010 as the
supply grew 8.06%/yr while demand grew only by 1.29%/yr from 2010 to 2015. Over this period, Middle
Eastern exports decreased by 2.42%/yr from 18.30 MMT to 16.195 MMT.
The largest consuming regions in 2015 were Asia (31.964 MMT in the Far East plus 9.91 MMT in Southeast
Asia) and North America (41.72 MMT). Growth in demand was largest in Southeast Asia (6.78%/yr), the
Far East (5.40%/yr), and the Middle East (also 5.40%/yr). High demand growth made Asia the largest
importer of propane, importing 23.34 MM tons in 2015, averaging 7.73%/yr growth in imports since 2010.
Europe imported 8.03 MMT in 2015. European propane imports average grew at an average rate of
8.82%/yr since 2010 when 5.26 MMT were imported.
LPG
LPG (liquefied petroleum gas), a mixture of propane and butane, is the most consumed NGL product,
totaling 286.12 MMT in 2015. LPG is produced from natural gas as well as refinery sources.

Most of the global growth in LPG production will come from recovery from natural gas rather than from
refinery sources (Figure 4.4). LPG from natural gas has a higher concentration of propane than typical
refinery gas. LPG supply growth will be driven by further development of US and Canadian shale fields,
by Middle Eastern conventional oil and gas production and by refinery production in China.
Global demand growth for LPG will be driven by the residential and commercial fuel demand growth and
chemical feedstock growth. LPG demand as transportation fuel is an important niche market comprising
about 9% of total world LPG demand. Growth as engine fuel usually depends upon government support
driven by air pollution emissions reduction goals, transportation fuel security or diversification.
Figure 4.4 World LPG production by source—2015
Refineries
37%
Natural Gas
63%
LPG demand growth is led by Asia with the largest growth and the Middle East. Chemical demand for LPG
as feedstock is growing faster than residential/commercial demand. Chemical demand acts to clear the
global LPG markets [27].
Supply
Worldwide supply of LPG totaled 286.12 MMT in 2015, up 3.22%/yr from 244.16 MMT in 2010. North
America is the largest region producing LPG, supplying 85.33 MMT in 2015 including exports of 22.02
MMT. Supply in North America increased 7.59%/yr from 59.18 MMT in 2010 due to increased fracking
for shale gas and oil. The surplus rocketed to 22.02 MMT in 2015 from 2010 when the surplus was only
1.22 MMT. In the near term, US LPG is mostly exported to Latin America, but increasing amounts are
forecast to be exported to Europe and Asia. Completion of the Panama Canal expansion project will allow
all very large gas carriers (VLGCs) to pass through the canal to Asia, reducing transportation time and risk.
Northeast Asia’s import sources are diversifying as US and Africa producers enter new markets.
LPG production growth from North America, the Middle East, and China will ultimately need to be
consumed in Asia. Northeast Asia will continue as the largest LPG importing region with India and
Southeast Asia growing quickly. India, China, and Southeast Asia are expected to increase consumption by
residential and commercial users. Russian LPG will need to be consumed in Europe and the Mediterranean
region, likely displacing some US exports toward Eastern Asia. Middle Eastern LPG will increasingly be
shipped to South Asia, especially to India.

Asian supply totaled 48.42 MMT and 40.21 MMT, respectively, in 2015 and 2010. European supply
actually declined 2.15%/yr from 26.00 MMT in 2010 to 23.32 MMT in 2015. In Asia, almost all LPG
production is from refineries in Northeast Asia; only limited production from gas processing occurs in the
rest of Asia. As typical for regions where diesel is the main automotive fuel, refinery production of butane
is greater than the production of propane. Rapid growth in refined product demand in China is expected to
drive their growth in LPG production. Over the long term, China is expected to increase gas production
from shale sources.
The main source of imported LPG is the Middle East, where 33.13 MMT surplus was produced in 2015,
up 1.60%/yr from a surplus of 30.60 MMT in 2010. Middle Eastern supply grew 2.98%/yr from 51.64
MMT in 2010 to 59.80 MMT in 2015.
In the Middle East, over 90% of the LPG is produced by gas plants; LPG recovery from refineries is small
but growing with increased capacity and increased refinery utilization. New gas plants are being built
upstream of new LNG and gas-to-liquids plants. Saudi Arabia will remain the largest LPG producer in the
region but Iraq and Iran will have the highest long term growth rates. As production increases are forecast
to continue, the Middle East will continue to be a large net exporter of LPG. Japanese, Chinese, Taiwanese,
and South Korean imports from the Middle East have decreased. More Middle Eastern LPG has been going
to South and Southeast Asia [28].
The supply of LPG in Europe from the North Sea is gradually declining as crude oil production and
associated gas production decline. Reduced crude oil throughput in refineries is also reducing European
LPG production. Refineries will continue to be the major source (69%) of LPG, but refinery production
will also decline as European oil product demand (and thus crude runs) declines.
The Commonwealth of Independent States region contains very large resources of crude oil and gas;
however, the largest resources are located far from population centers in Western Siberia, Kazakhstan, and
Azerbaijan. Most LPG production in the region is from gas processing plants. As natural gas production
increases, LPG production will increase. Sanctions on Russia, the largest LPG producer, will delay growth
in production.
Supply of LPG in Latin America is significantly net short, especially of propane. Mexico, Brazil, and
Venezuela supply about 70% of LPG production. Production has been significantly negatively impacted by
reduction in crude oil production in Mexico and Venezuela and the closure of the Hovensa refinery in the
Virgin Island.
Most of the LPG supply in Africa is produced in Algeria, Egypt, and Nigeria, where large natural gas
reserves are located. LPG production is expected to increase as natural gas production comes online in
Algeria, Angola, Nigeria, and other countries. LPG from Africa that used to go to the United States is now
being exported to Europe and Asia.
In Oceania, Australia is the largest producer and consumer of LPG due to having the majority of the
resources and population. The majority of LPG in Oceania is recovered from natural gas. New LNG projects
coming online about 2018 to 2020 will process some gas from fields containing significant quantities of
LPG that will be recovered prior to liquefaction.
Demand
Global growth in LPG demand has averaged 3.22%/yr from 244.16 MMT in 2010 to 286.12 MMT in 2015.
Demand was greatest in Asia where 84.44 MMT were consumed in 2015, up 4.88%/yr from 66.53 MMT
in 2010. Asian imports were 36.02 MM tons in 2015, up from 26.32 MM tons in 2010. The Far East
accounted for 76.6% of Asian demand and 74.4% of supply; Southeast Asia provided the balance.

Europe is also a large LPG importing region having a deficit of 13.03 MM tons in 2015 or 35.8% of the
36.35 MMT of demand. European demand grew 2.64%/yr from 31.91 MMT in 2010.
North America consumed 63.31 MMT in 2015. Demand increased 1.87%/yr since 2010s 57.70 MMT.
Middle Eastern demand grew 4.85%/yr from 21.04 MMT in 2010 to 26.67 MMT in 2015.
The largest US demand growth for LPG will be as feedstock for propane dehydrogenation units. Growth in
demand as petrochemical feedstock will drive Middle East demand. The residential and commercial fuel
market as well as chemical feedstock demand will drive LPG demand in Asia. European demand is driven
by chemicals. In the Commonwealth of Independent States region, Russia is expected to remain the
dominant LPG consumer.Demand for LPG in Latin America is expected to increase with improving
economies and rising populations.
The largest regional market in Africa will continue to be in Egypt. Morocco should remain the second
largest consumer. Africa historically has exported significant amounts of LPG, which will continue through
at least 2023. Longer term as more domestic residential and commercial use continues to grow and chemical
uses develop, LPG available for export will decline.
Butanes
The recent worldwide supply of butane is shown in Figure 4.5. Demand closely followed supply. Butane
demand grew at a rate of 2.98%/yr from 111.93 MMT in 2010 to 129.62 MMT in 2015. Supply of butane
similarly grew 3.07%/yr to 129.61 MMT to 111.37 MMT.
Figure 4.5 World butane supply
135,000
130,000
1,000 metric tons
125,000
120,000
115,000
110,000
2009 2010 2011 2012 2013 2014 2015 2016
The largest demand for butane is in Asia. The Far East consumed 32.72 MM tons in 2015, a 3.68%/yr
increase from 2010s 27.31 MMT. Southeast Asia consumption grew faster, 5.56%/yr, but from a smaller
base, 7.51 MMT in 2010 to 9.84 MMT in 2015. Combined, Asia is the largest importer of butanes,
importing 12.68 MMT in 2015, up 4.37%/yr from 10.24 MMT in 2010. Regional supply was about 70% of
demand both in 2010 and 2015. From 2010 to 2015, production grew from 24.57 MMT to 29.88 MMT.
From 2010 to 2015, Europe switched from being almost in balance between supply and demand to a
substantial importer (0.64 MMT deficit in 2010 to 5.00 MMT in2015). European demand grew 2.90%/yr
during this period from 14.28 MMT to 16.50 MMT. European production, however, declined 3.37%/yr
from 14.64 MMT to 11.49 MMT.
The Middle East supplies the bulk of imported butane, 16.93 MM tons in 2015. Middle Eastern exports
grew 6.61%/yr from 12.29 MM tons in 2010. Middle Eastern supply grew faster than demand, 5.58%/yr
versus 4.14%/yr as production increased from 21.57 MMT in2010 to 28.29 MMT in 2015. During this
period, demand increased from 9.27 MMT to 11.36 MMT.
By 2015, North America became a large exporter of butane, exporting 4.46 MM tons that year. Surplus
butane was only 0.36 MMT in 2010. Like the Middle East, supply grew faster than regional demand,
6.58%/yr compared with 3.04%/yr due to increased fracking. In 2010, North American supply was 18.94
MMT. Supply increased to 26.04 MMT in 2015. Demand in2015 was 21.59 MMT, up from 18.58 MMT
in2010.
Since US production of butane is also expanding faster than domestic demand, the United States is forecast
to become a significant butane exporter. Most US surplus n-butane has been consumed domestically.
However, inventories have been rising since 2011 and exports of surplus n-butane have started to increase.
US exports of n-butane and isobutene have increased about 325% since 2011 [27; 28].
Natural gasoline
Natural gasoline is the highest boiling of the NLG components. By definition it is recovered in NGL plants
from natural gas. The natural gas source differentiates it from all refinery naphthas and segregated field
condensates.
Natural gasoline supply is dependent upon its concentration in the natural gas processed in recovery plants.
US natural gasoline production is forecast to increase in the medium term but will start to decline long term
as drier production from shale fields replaces wetter field production.
Surplus natural gasoline produced in the United States will be exported to Canada for use as bitumen diluent.
US produced natural gasoline will likely remain too expensive to use as petrochemical feedstock [27; 28].
End-use markets and demand drivers
More than 90% of US NGL demand is for petrochemical feedstock, gasoline blending and retail space
heating plus engine fuel (Table 4.6). Although the chemical structure of the NGLs are similar, all being
paraffins but differing in molecular weight, their uses are very different. All NGLs are used as
petrochemical feedstock. n-Butane, isobutene and natural gasoline are either reacted to gasoline blending
components such as alkylate or blended directly depending upon gasoline Reid vapor pressure
specifications. Propane is used mainly as space heating and cooking fuel. Petrochemical feedstock is the
largest sector with ethylene being the largest product [20].
Table 4.6 US NGL demand (ca 2011)

Petrochemical Motor gasoline Space heating and other fuel uses Exports Inventory changes
Demand, vol% 54 17 19 7 3
Ethane 58
Propane 23 60
n-Butane 5 26 11
Isobutane 2 37
Natural gasoline 12 37 29
Total 100 100 100
Source: [37] © 2016 IHS

Compared with heavier liquid refined products, NGLs are more expensive to handle, store and transport
due to:
• High pressure and/or low temperature required to maintain them in the liquid state.
• High flammability with dense products exhibiting vapor “crawling” rather than rising since their density
is heavier than air.
• Special containers are required for shipping and storage. Thick steel insulated tanks hold smaller volumes
for shipping and storage; underground caverns store large volumes [37].
Ethane
The lightest NGL, ethane (C2H6), is almost all steamed (thermal) cracked to ethylene, most of which is then
polymerized to polyethylene plastic. Ethylene is also reacted to produce a variety of other petrochemicals
(Table 4.7). US ethylene derivative supplies are expected to grow faster than US demand, which will put
downward pressure on derivative prices [35; 42].
Table 4.7 Major reactions of ethylene, products, and derivatives

Reaction Product Derivative of product
Polymerization/oligomeization Polyethylene (low, linear low and high density polyethylenes)
Linear alpha olefins
Halogenation/hydrohalogenation Ethylene dichloride Vinyl chloride
Polyvinyl chloride
Oxidation Ethylene oxide Ethylene glycol
Nonionic surfactants
Alkylation Ethylbenzene Styrene/polystyrene
Styrene-butadiene rubber
Other Vinyl acetate Polyvinyl acetate polymers/copolymers
Source: [38] © 2016 IHS
In the second half of 2015, about 68–70% of NGL demand for US ethylene feedstock was for ethane.
Ethane cracking accounted for about 76% and 87% of the increased NGL feedstock demand in the third
quarter and fourth quarter, respectively.
Figure 4.6 shows recent US petrochemical demand for ethane and propane. Cracking ethane instead of
propane, naphtha or gas oil produces higher ethylene yields and minimal by-products. The higher ethylene
yield significantly reduces the feed rate for a given ethylene production rate—1.25 tons ethane/ton ethylene
compared with 2.3 tons propane/ton ethylene, 3.0 tons naphtha and 3.85 tons gas oil. When cracking 100%
ethane, often the C3 and heavier products are too low in volume for economical separation and hence
individual recovery. In particular, 1,3 butadiene, butenes, C5s, and BTX products are all reduced in yield to
less than 2 wt%. Besides lower feedstock cost and operating costs, new ethane crackers have lower capital
cost than equivalent capacity naphtha crackers since the product separation train is less complex [32].

Figure 4.6 US petrochemical demand for ethane and propane
1,200
1,000
800
1,000 B/D
600 Ethane
Propane
400
200
-
2009 2010 2011 2012 2013 2014 2015 2016
As of early 2016, 20 ethylene cracker projects were proposed for the United States. Five were scheduled
for completion by 2017. Sasol has started construction at Lake Charles, LA. Many of the other projects may
be postponed or canceled. IHS predicted 10 are likely to be built over the next few years. The long term
trend still favors locating shale gas related petrochemical plants in the United States.
Propane
Propane (C3H8), the next lightest NGL, is mainly fuel for residential and commercial space heating and
cooking. US residential-commercial sector propane demand depends on the severity of winter but usually
is 75–80% of total retail propane demand [36]. Petrochemical feedstock uses of propane are significant; the
main one is steam cracking to propylene and by-product ethylene (Figure 4.7).
Figure 4.7 World propane uses—2015
Refinery Other
Town Gas 0.1% 3.4%
1.0%
Chemical
29.2%
Residential and
Commercial
49.1%
Engine Fuel
8.3% Industrial
9.0%

LPG
LPG is a mixture of propane and butane (typically 60/40 butane-propane). Butane content can vary from
100 to 50% or less. About 67% of LPG is consumed as a fuel. Chemical uses comprise about 29% of
consumption.
Worldwide end-use markets of LPG for residential, commercial and petrochemical uses comprise about
78% of total LPG end use (Figure 4.8). The residential and commercial sector is the largest end use with
about 49% of LPG demand (71.58 MMT in 2015, Table 4.8). Chemical uses accounted for 29.2% of
demand (42.66 MMT) in 2015, up from 27.1% (34.98 MMT) in 2010. Industrial use of about 13.1 MMT
was about unchanged from 2010 to 2015.
Figure 4.8 World LPG demand by use—2015
Refinery
6%
Other
3%
Town Gas
1%
Petro-
chemical
20%
Residential and
Commercial
50%
MTBE
2%
Engine Fuel
9%
Industrial
8%

Table 4.8 World LPG end uses

Use 2010 2015 Average annual growth rate,
1,000 MT 1,000 MT %/yr
Residential and commercial 62,444 71,579 2.77
Chemical 34,382 42,662 4.41
Industrial 13,126 13,096 -0.046
Engine fuel 10,608 12,040 2.56
Town gas 1,333 1,445 1.63
Refinery 177 82 -14.26
Other 4,998 5,017 0.076
Total 127,068 145,922 2.81
Growth in these markets is expected to absorb the projected supply growth. Increased world chemical
demand for LPG is anticipated to help balance supply and demand. Increased demand will come from China
for propane dehydrogenation to propylene, from the Middle East for LPG cracking to olefins and from
Eastern Asia through substitution of LPG for naphtha in flexible crackers.
Chemical production will continue to be the largest end use of LPG in the Middle East. Ethylene crackers
and propane dehydrogenation units are the main consumers. Residential and commercial consumption of
LPG is increasing rapidly. Consumption is about 45 kilograms per capita, which is about 2.5 times the
worldwide rate of 18 kilograms per capita.
In Asia, residential and commercial users consume about 50% of total LPG consumption, a proportion that
is expected to rise slowly over the long term. Consumption in the mature markets of Japan, Korea and
Taiwan is already relatively high at 30 to 50 kilograms per capita. In the region, petrochemicals will drive
demand growth, especially for propane dehydrogenation in China.
European residential and commercial demand for LPG is being displaced by natural gas for cooking and
heating fuel. Most European steam crackers crack naphtha. Some increase in LPG use as steam cracking
feedstock is forecast due to favorable cash costs compared with naphtha feedstock. In some European
countries, LPG as automotive fuel is popular since availability is wide spread and prices are competitive
with diesel fuel. Growth is expected to be supported by governments.
The largest end-market demand for LPG in the Commonwealth of Independent States is as engine fuel and
chemical feedstock. Residential and commercial uses have largely been displaced by natural gas.
In Latin America, almost 75% of LPG demand is consumed by residential and commercial users who
consume about 36 kilograms per capita, double the world’s 18 kilograms per capita rate. Chemical
production consumes only about 6% of total LPG demand. Most of the steam crackers have very limited
flexibility to substitute LPG for naphtha. About 5% of LPG is consumed as automotive fuel.
LPG consumption in Africa at about 90% of total demand is residential and commercial uses.
In Oceania where demand is dominated by Australia, engine fuel is the largest end use. Automotive fuel
demand growth has slowed so that use is expected to remain mostly flat since Australian government tax
incentives have been reduced. Residential and commercial uses as well as industrial use will grow slowly.
Chemical consumption will remain flat through 2020 at least.
Butanes
Figure 4.9 shows the distribution of uses of butane in 2015. Besides being used as a fuel in LPG, some n-
butane is blended directly into gasoline to bring the vapor pressure up to the Reid vapor pressure limit.
Winter gasoline usually allows more butane to be blended so the quantity of n-butane consumed varies with
the season. The main use of isobutane is as an alkylation feedstock reacted with preferably isobutylene but
also n-butenes to form alkylate, a high octane, paraffinic and very low sulfur gasoline blending stock.
As petrochemical feedstock, n-butane is reacted to maleic anhydride and some is dehydrogenated to

butadiene, most of which is then polymerized into synthetic rubber. The synthetic rubber is mainly used in
tires.
Figure 4.9 World butane uses—2015

Other
Refinery 1.5%
13.5%
Town Gas
0.3%
Petrochemical
11.9%
Residential and
Commercial
51.4%
MTBE
4.5%
Engine Fuel
10.8%
Industrial
6.1%
Natural gasoline
Natural gasoline is a mixture of pentane (C5H12) and heavier paraffins. Natural gasoline tends to be lighter
and more paraffinic than other naphthas and can be sold into the same markets as other light naphthas,
mainly refining and petrochemical uses. Natural gasoline can be directly blended into motor gasoline but
with an octane rating penalty that must compensated by higher octane components. To increase its octane
rating, natural gasoline is also fed to C5–C6 isomerization units in refineries having these units. Since the
volume of gasoline demand is strongest in summer, usage of natural gasoline is higher in summer. Demand
in refineries without an isomerization unit for natural gasoline is more variable.
A relatively small amount is consumed as a denaturant for ethanol. Natural gasoline is also an excellent
steam cracking feedstock and paraffinic petrochemical feedstock. Some is used in specialty solvent
production.
In North America, Venezuela and Colombia, natural gasoline is a highly desirable diluent for heavy bitumen
and crude oils. The large volumes consumed in Canada have driven up the price of natural gasoline making
it less competitive as a petrochemical cracking stock in the region [42].

Price history
US NGL prices peaked in 2011 and fell through the first half of 2015 as crude oil prices fell (Figure 4.10).
NGL supply became surplus due to the rapid development of shale gas reserves and constrained LPG export
capacity. US Gulf Coast spot prices for propane, butane and natural gasoline fell in the second half of 2015
to 2002 levels. NGL raw mix was 41 ¢/gal (3.91 $/MMBtu) in the third quarter and 43 ¢/gal (4.04
$/MMBtu) in the fourth quarter of 2015 [25; 36].
Figure 4.10 US NGL price history
250
200
Cents per gallon
150 Ethane
Propane
n-Butane
100
Isobutane
Natural Gasoline
50
US natural gas resources are plentiful especially with the advent of shale fracking. US natural gas prices
dropped in 2014 driven by rising inventory caused by increased gas production combined with decreasing
upstream costs. US natural gas prices are largely disconnected from crude oil prices. Ethane has the least
value of the NGLs. The prices of NGLs, except ethane, plunged along with crude oil prices. By that time,
the price of ethane had already declined to near fuel value. Low crude oil prices driven by oversupply are
expected to recover over the next two to six years to a level able to sustain development of needed supply
[25].
Value of a NGL is the sum of the commodity value of the product itself plus a location component.
Published prices are available only for a few locations that trade large volumes (hubs). Hub prices must be
adjusted for a location differential (transportation costs) to arrive at the plant gate value. Realized plant
price equals the hub value less fractionation cost less transportation cost. Estimated fractionation plus
transportation costs to market hubs are given in Table 4.9 assuming new construction cost. Transportation
fees in 2013 for ethane shipment to the Mont Belvieu, Texas hub ranged from 0.05 $/gal from the Permian
Basin in west Texas to 0.21 $/gal from the Bakken field in North Dakota (Table 4.10).

Table 4.9 Estimated fractionation plus transportation costs to market hubs (2012)
Field Hub Cost, ¢/gal
Brakken (North Dakota) Mid-Continent 20–22
Marcellus (Northeast US) Mont Belvieu 28–30
Rockies (Colorado) Mont Belvieu 18–20
South Texas Mont Belvieu 7–11
West Texas, Southeast New Mexico Mont Belvieu 10–12
Source: [37] © 2016 IHS
Table 4.10 Ethane transportation fees to Mont Belvieu, Texas hub (2013)
Basin $/gal $/MM BTU
Bakken (North Dakota) 0.21 3.20
Marcellus (Northeast US) 0.15 2.28
Eagle Ford (South Texas) 0.07 1.07
Permian Basin (West Texas, New Mexico) 0.05 0.76
Source: [45] © 2016 IHS
Ethane
Ethane prices are affected by regional natural gas production as well as domestic ethylene plant and export
demands. From 2010 to mid-2014, the US shale boom caused ethane production to grow into an excess
over domestic demand. Since the excess ethane had no outlet, prices fell even below fuel value, which led
producers to reject ethane (leave ethane in the natural gas product while recovering C3+ NGLs).
Historically, ethane prices fell to rejection levels when ethane demand as a feedstock fell below gas plant
supply for one or two quarters as inventory levels grew unsustainably high. In 2011, US ethane price was
greater than twice its fuel value. In second quarter 2012, Mont Belvieu, Texas spot prices fell below levels
that supported full ethane recovery in all western US production regions [20]. By 2013, the price of ethane
had declined to its fuel value. Then about mid-2014, crude oil prices fell quickly, reducing the huge price
advantage of ethane as steam cracker feedstock over heavier feedstocks. Flexible crackers switched some
of their feed to LPG.
The EIA generally expects the price of ethane to rise to meet increased demand from petrochemicals and
exports [29]. In the future, US ethane consumption is expected by IHS to come closer to supply. New
pipeline capacity along with a couple new export terminals and expanded ethane steam cracking capacity
are planned to come online by 2020. The new facilities should consume much of the ethane now being
rejected. The reduction in ethane rejection should raise ethane prices to a level above the fuel value before
all the recoverable rejected ethane is recovered. The ethane supply will come from diverse fields while
demand will be concentrated on the US Gulf Coast. Increased transportation costs for shipping ethane
produced increasingly distant from processing plants will also drive the price up. Most demand for US
ethane for ethylene will remain domestic since export demand is expected to be limited compared with new
US ethane crackers coming online in the next several years [27].
Starting in 2016, Saudi Arabia raised its price of ethane 133% to 1.75 $/MMBtu from 0.75$/MMBtu. This
brought their steam cracker feedstock cost closer to those in the United States but still lower [12].
Propane
Similar to ethane, the price of propane has depended upon supply. US propane production increased from
2010 to mid-2014 similar to ethane during the shale boom. US propane production from shale gas exceeded
the incremental increase in domestic consumption. Propane became oversupplied as insufficient export

capacity existed, resulting in low US propane prices compared with overseas markets. Pricing of ethane
made it a more favorable feedstock than propane, reducing the demand for propane. During the mid-2014
to 2016 period, propane prices declined as crude oil prices declined. Cracker demand for propane as
feedstock recovered.
In the future, US propane prices will be at a discount to overseas prices in order to clear surplus propane
production. The US propane market balance will tighten as export capacity is expanded over the next couple
years. Over the next five years, ethane is projected to again be the favored cracking feedstock. Propane has
global emerging market demand as residential/commercial heating and cooking fuel as well as Asian
hydrogenation demand. Start-up of new US propane dehydrogenation capacity over this time will increase
demand for propane. The excess supply will be exported, likely to Asia [27]. Significant LPG trade
developing with Asia will maintain US propane prices lower than other major international trading hubs
over the long term.
LPG
Since the global recession of 2008–09, US LPG prices weakened due to a lack of export terminal capacity.
LPG prices in Asia remained relatively flat compared with crude oil prices. When US export terminal
capacity is adequately available, the price of LPG will be determined by the netback cost for Asia [28].
Natural gasoline
Naphtha prices follow crude oil prices more closely than do other NGL component prices. Naphtha in Japan
is priced at a premium compared with Northwest European prices [27].
Producers
The 2015 worldwide supplies of ethane, LPG and NGL by region are summarized by region in Table 4.11.
The table also lists some of the major countries production. North America is the largest ethane producing
region, accounting for 1.466 million B/D or 52.67% of world ethane supply. The Middle East is the largest
supplier of LPG (3,886 million B/D or 47.16%) and NGL (80.66 million B/D or 46.57%). North America
supplies substantial quantities of LPG (1.700 million B/D or 27.00%) and NGL (3.430 million B/D or
26.69%) while the Middle East supplies 0.634 million B/D or 22.78% of world’s ethane.

Table 4.11 Regional world NGL supply—2015

Ethane LPG NGL
Region 1,000 B/D 1,000 B/D 1,000 B/D
North America 1,466 2,225 4,623
United States 1,065 1,700 3,430
Canada 287 325 806
Mexico 114 200 387
Western Europe 62 637 762
Norway 42 252 342
United Kingdom 12 108 120
Commonwealth of Independent States 520 564 1,939
Russia 520 540 1,660
Kazakahstan --- 15 270
Middle East 634 3,886 8,066
Saudi Arabia 280 860 1,945
Qatar 152 410 1,337
Asia-Pacific 82 1,888 2,903
China --- 795 992
India 30 326 372
South America 82 438 876
Brazil 9 186 220
Venezuela 16 70 236
Argentina 55 91 185
Africa 13 490 1,056
Algeria 13 286 679
World total 2,783 8,240 17,322
Source: [44] © 2016 IHS
Capacity
The United States has 365 gas plants with a total capacity to process 95.463 trillion cubic feet/day of treated
natural gas. In Canada, 91 gas plants can process 22.299 trillion cubic feet/day of natural gas.
Table 4.12 lists the major natural gas producing companies in the United States, the states their plants are
located, the number of plants in the state and the total state feed capacity. Similar information for Canadian
producers is listed in Table 4.13. The number distribution of the capacity of gas processing plants located
in North America (Figure 4.11) is bimodal with peaks at the smallest plants (2 to 30 MM cf/D) accounting
for 17% of the plants and 181–210 MM cf/D plants comprising 14.5%. The volume distribution of the same
gas plants (Figure 4.12) is also bimodal with peaks at 181–210 MM cf/D (13.5% of total volume) and the
largest plants (1,000–2,600 MM cf/D), which total only 4% of the plants by number but about 29% by
volume.

Table 4.12 United States natural gas processing plants

Producer State Number of plants Feed capacity, MM scfd
Anadarko/Western Gas Partners Colorado 4 900
Texas 3 625
Wyoming 5 536
Total 12 2,061
Aux Sable Illinois 1 2,100
Blue Pacer Midstream Ohio 2 400
West Virginia 2 400
Total 4 800
Crestwood Midstream Partners California 1 25
New Mexico 1 20
Texas 4 461
Wyoming 1 120
Total 7 626
DCP Alabama 1 300
Colorado 11 905
Kansas 1 700
Louisiana 4 3,745
Michigan 2 70
New Mexico 8 750
Oklahoma 10 843
Texas 26 3,911
Wyoming 1 60
Total 64 11,314
Dominion Transmission West Virginia 1 180
Enable Midstream Partners Louisiana 1 225
Oklahoma 10 1,520
Texas 2 520
Total 13 2,265
Enbridge Energy Partners Oklahoma 3 440
Texas 20 1,756
Total 23 2,196
Energy Transfer Partners Louisiana 7 1,114
New Mexico 1 80
Oklahoma 3 190
Texas 28 3,470
Total 39 4,884

Table 4.12 United States natural gas processing plants (continued)

Enlink Midstream Partners Louisiana 5 1,710
Oklahoma 4 1,075
Texas 10 1,168
Total 19 3,953
Enterprise Products Partners Colorado 1 1,800
Louisiana 5 2,710
Mississippi 1 1,500
New Mexico 4 1,500
Texas 10 2,860
Wyoming 1 1,350
Total 23 11,920
ExxonMobil Alabama 1 300
California 1 15
Louisiana 1 225
Texas 4 663
Total 8 1,863
Kinder Morgan Energy Partners North Dakota 4 182
Ohio 2 400
Oklahoma 7 236
Texas 6 1,300
Total 19 2,118
MarkWest Energy Partners Kentucky 2 395
Ohio 5 1,325
Pennsylvania 4 805
Texas 4 742
West Virginia 11 3,247
Total 28 6,984
Occidental California 6 626
New Mexico 1 300
Texas 8 1,065
Total 15 1,991
Oneok Partners Kansas 2 300
Montana 1 7
North Dakota 9 874
Oklahoma 8 633
Wyoming 1 50
Total 21 8,501
Plains All American Pipeline Alabama 2 11
Louisiana 2 630
“Various” 7,860
Total --- 8,501
Southwest Energy Partners Texas 4 685
Targa Resources Louisiana 11 6,595
New Mexico 3 240
North Dakota 12 128
Oklahoma 10 2,998
Texas 15 2,332
Total 41 10,473
Veresen Illinois 1 2,100

Table 4.12 United States natural gas processing plants (concluded)

Williams Partners Alabama 1 690
Colorado 7 2,375
Louisiana 1 600
New Mexico 2 310
Pennsylvania 3 236
Texas 1 500
Wyoming 3 2,3345
Total 22 8,221
United States Total 365 95,463
Table 4.13 Canadian natural gas processing plants

Producer Providence Number of plants Feed capacity, MM scfd
AltaGas Alberta 30 200
British Columbia 1 32
Saskatchewan 2 41
Total 33 273
ATCO Alberta 3 1,490
Northern Territory 1 8
Saskatchewan 2 42
Total 6 1,580
Aux Sable British Columbia 1 75
Enbridge Energy Partners British Columbia 1 320
Inter Pipeline Alberta 3 6,200
Keyera Alberta 17 2,446
Pembina Alberta 8 3,473
Saskatchewan 1 60
Total 9 3,533
Shell Alberta 8 3,473
Spectra Energy British Columbia 10 3,607
Veresen Alberta 1 510
British Columbia 2 273
Total 3 783
Canada Total 91 22,290

Figure 4.11 Natural gas processing plant capacity number distribution
20
18
16
14
12
%
10
8
6
4
2
0
Capacity, MM CF/D
Figure 4.12 Natural gas processing plant location capacity volume distribution
35
30
25
20
%
15
10
Capacity, MM CF/D
Fractionators
The major North American NGL producers run 84 fractionation facilities in the United States and an
additional 14 in Canada (Tables 4.14 and 4.15). Fractionator feed capacity in the United States totals 4.488
million B/D while Canadian capacity totals 0.669 million B/D for a total of 5.157 million B/D. The
combined capacity distribution by number of the 98 US and Canadian facilities (Figure 4.13) is bimodal
with peaks at 10,000–20,000 B/D (18.4% of facilities) and 60,000–80,000 B/D (10.2%). The volume

distribution (Figure 4.14) shows the 30.6% of facilities with 60,000 B/D or greater feed capacity account
for two-thirds of the volumetric capacity.
In late 2015, Phillips 66 started up a new 100,000 B/D NGL fractionator at its Sweeny Complex in Old
Ocean, Texas [15].
Table 4.14 Capacity of United States fractionation facilities
Producer State Number of plants Feed capacity, B/D

Anadarko/Western Gas Partners Colorado 1 7,900
Wyoming 2 11,900
Total 3 19,800
Aux Sable Illinois 2 131,500
Blue Racer Midstream West Virginia 2 126,000
Crestwood Midstream Partners California 2 20,000
DCP Midstream Colorado 2 13,000
Louisiana 1 25,000
Texas 6 83,000
Total 9 121,000
Dominion Transmission West Virginia 1 14,000
Energy Transfer Partners Texas 3 225,000
Louisiana 4 194,000
Total 7 419,000
EnLink Midstream Partners Texas 2 57,000; unknown
EnLink Midstream Partners, Targa Resources, Texas 1 125,000
Phillips 66
Enterprise Products Partners Louisiana 2 105,000
Ohio 1 3,000
Texas 3 843,000
Total 6 951,000
Enterprise Products Partners, Williams Louisiana 1 60,000
Enterprise Products Partners, Dow Chemical Louisiana 1 145,000
ExxonMobil Texas 2 152,000
Kinder Morgan North Dakota 2 24,000
Texas 1 44,000
Utah 1 5,600
Total 4 73,600
Kinder Morgan, MarkWest Ohio 1 48,000
Kinder Morgan, Targa Texas 1 100,000
MarkWest Kentucky 1 24,000
Ohio 4 198,000
Pennsylvania 5 150,500
Texas 1 29,000
Total 12 477,500
Occidental Texas 1 87,000

Table 4.14 Capacity of United States fractionation facilities (concluded)

Oneok Kansas 2 260,000
North Dakota 2 41,000
Oklahoma 2 200,000
Texas 2 150,000
Total 8 651,000
Oneok, DCP Midstream Texas 1 160,000
Phillips 66 Texas 3 267,000
Plains All American California 1 14,000
Texas 1 15,000
Various Unknown 11,800
Total 2+ 26,800+
Southcross Texas 3 90.3
Targa Resources Louisiana 2 66,000
Texas 2 45,000
Total 4 111,000
Targa Resources, BP Texas 2 493,000
Williams, DCP Midstream Louisiana 1 42,000
Williams Partners Kansas 1 107,000
Wyoming 1 8,000
Total 5 258,000
United States Total 84 4,488,100
Table 4.15 Capacity of Canadian fractionation facilities

Producer Providence Number of plants Feed capacity, B/D
Dow Chemical Alberta 1 145,000
Keyera Alberta 4 71,400
Pembina Pipeline Alberta 2 155,000
British Columbia 1 Unknown
Total 3 155,000+
Pembina Pipeline Ontario 1 20,000
Plains All American Alberta 1 75,000
Ontario 1 120,000
Total 3 215,000
Spectra Energy Alberta 1 63,000
Williams Partners Alberta 1 Unknown
Canada Total 14 669,400+

Figure 4.13 NGL fractionation plant capacity—Number distribution
20.00
18.00
16.00
14.00
12.00
%
10.00
8.00
6.00
4.00
2.00
0.00
Capacity, B/D
Figure 4.14 NGL fractionation plant capacity—Volume distribution
18
16
14
12
10
%
8
6
4
2
0
Capacity, B/D

New construction
As of September 2015, US and Canadian LPG export projects totaling 1.8 million B/D of capacity were
announced or under construction.
Most midstream infrastructure expansions and new construction is driven by gas plant NGL production.
Since 2011, associated gas production has driven gas plant production. Future construction will depend
upon when and how quickly US exploration companies resume shale field drilling. A present concern is
how much the oil supply will increase before another drop in the crude oil price or in NGL product prices
[20]. Announced new gas plant construction as of March 2016 is listed in Table 4.16. The announced 31
new capacity projects total over 5,198 million scfd of new gas plant capacity in North America.
Table 4.16 New gas plant construction

Capacity,
Company Location Process MM scfd Status Estimated completion
North America
AltaGas British Columbia 198 2016
Anadarko/Western Gas Partners Reeves County, TX 200 Under construction 2016
Blue Racer Midstream --- Cryogenic Planned 2016
Delaware Basin Gas Processing Texas Cryogenic 150 Under construction 2016
Enable Midstream Partners Oklahoma 200 Under construction 2016
Enable Midstream Partners Oklahoma 200 Under construction 2017
Energy Transfer Partners Pennsylvania Unknown Under construction 2017
EnLink Midstream Partners Oklahoma 200 Under construction 2016
EnLink Midstream Partners Texas 200 Under construction 2016
Enterprise Products Partners New Mexico 200 Under construction 2016
Enterprise Products Partners New Mexico 150 Proposed 2016
MarkWest Energy Partners Butler County, PA 200 Under construction 2016
MarkWest Energy Partners Washington County, PA 200 Under construction 2016
MarkWest Energy Partners Panola County, TX 120 Planned 2016
MarkWest Energy Partners Washington, PA 200 Planned 2016
Oneok Partners Grady, OK 200 On hold
Oneok Partners Dunn, ND 80 Announced 2016
Oneok Partners Campbell, WY 100 On hold
Oneok Partners McKenzie, ND 200 On hold
Pembina West Central, Alberta 200 Announced 2016
Pembina Grand Prairie, Alberta 100 Announced 2016
Pembina Fox Creek, Alberta 100 Announced 2017
Pembina West Central, Alberta 100 Under construction 2016
Sanchez Energy/Targa Resources La Salle County, Texas Cryogenic 200 Planned 2017
Partners LP JV
Stolt LNGaz Quebec, Canada 500 MMtpy Under construction 2018
Targa Resources McKenzie County, ND 200 Under construction 2016
Targa Resources Martin County, TX 200 Announced 2016
Targa Resources/Sanchez Energy La Salle County, TX 200 Announced 2017
Veresen British Columbia 200 2017
Veresen British Columbia 400 2017
Williams Partners Garfield County, CO 300 Under construction 2016
Commonwealth of Independent States
Gazprom Russian Federation 49 Bcmy 2019
Lukoil Uzbekistan 8.1 Bcmy 2019
Note: Bcmy refers to billions of cubic meters per year.

New fractionator plant construction
New announced North American fractionator plant capacity, proposed or under construction as of March
2016, totaled 520,000 B/D. A postponement of 85,000 B/D reduces the total new capacity to 435,000 B/D.
The projects are listed in Table 4.17.
Table 4.17 New North American NGL fractionator construction

Company Location Capacity, B/D Status
Energy Transfer Partners Mt. Belvieu, TX 120,000 Proposed
Marcus Hook, PA --- Proposed, 2017
EnLink Midstream Partners Plaquemine, LA 100,000 Under construction, 2016
Enterprise Products Partners Mt. Belvieu, TX 85,000 Postponed
Kinder Morgan North Dakota 6,500 Under construction, 2016
MarkWest Houston, PA 10,000 Under construction, 2016
Oneok Williams, ND 26,000 Under construction, 2016
Pembina Pipeline Redwater, Alberta 73,000 Announced, 2017
Targa Resources Mt. Belvieu, TX 100,000 Under construction, 2016

5 Historical economics comparison—An iPEPSpectra™ analysis

Historical NGL prices
Figure 5.1 shows the historical price volatility for US Gulf Coast market prices of NGL components
compared with West Texas Intermediate (WTI) Crude Oil and natural gas for 2000 to 2016.
Figure 5.1 Historical NGL component market prices
United States Prices

1200 14
12
1000
10
Natural gas ($/MMBtu)

800 Ethane ($/t))
8 Propane ($/t))
$/t
600 Isobutane ($/t)

6 Butane ($/t)
400 Natural Gasoline ($/t))

4
WTI Crude ($/t) WTI Crude ($/t)
200 Natural Gas ($/MMBtu)

2
0 0
2000 Q1
2000 Q4
2001 Q3
2002 Q2
2003 Q1
2003 Q4
2004 Q3
2005 Q2
2006 Q1
2006 Q4
2007 Q3
2008 Q2
2009 Q1
2009 Q4
2010 Q3
2011 Q2
2012 Q1
2012 Q4
2013 Q3
2014 Q2
2015 Q1
2015 Q4
2016 Q3
NGL prices are a function of the crude oil price, especially before the global recession of 2008–09.
Emerging from the recession, prices are more volatile and, except for natural gasoline, are more independent
of the crude oil price, but still fell greatly when crude oil dropped in fourth quarter 2014. Over the period
from 2000 to 2016, linear regression coefficients (R2) of individual NGL component prices to crude oil
price show a strong correlation for natural gasoline and essentially no correlation for ethane:
Component R2
Natural gas 0.21
Ethane 0.23
Propane 0.77
Isobutane 0.84
n-Butane 0.85
C5+ natural gasoline 0.98
Similarly, ethane correlated better with natural gas, 0.72 R2.
Ethane and propane prices especially after second quarter 2011 dropped precipitously loosing two-thirds
and almost one-half, respectively. By first quarter 2014, the price of propane had recovered to 740 $/t from
438 $/t, while ethane continued to decline from 251 $/t in first quarter 2014 to 130 $/t in fourth quarter
2015.
© 2016 IHS 100 December 2016

Historical process economics comparison—iPEPSpectra™ cost module
In the Section 3 of this process summary, we report that the economics of NGL separation with ethane
recovery or rejection under two scenarios—at low oil price of $42/bbl as of fourth quarter in 2015 and at
high oil price of $100/bbl as of first quarter 2014. We show that the profitability of NGL separation with
ethane recovery or rejection is very high under the high oil price period but very low under the low oil
period. Since oil and NGL prices fluctuate widely overtime as shown in Figure 5.1, we develop a new iPEP
Spectra data module to examine how the NGL separation and fractionation margin changes quarterly, from
first quarter 2000 to third quarter 2016. During the period, the energy and chemical industries experienced
two major oil and NGL price cycles.
The new iPEP Spectra data module is an interactive file written in Excel pivot tables. Pivot tables are
dynamic and flexible that allows our clients to compare process economics by selecting competing
processes and/or feed compositions. A user can also choose to compare production economics at various
levels, such as cash cost, net production cost, or margin. One can also compare the process economics in
three main NGL production regions—United States, Canada, and Saudi Arabia. The iPEP Spectra file is
available on our website together with the PDF file of this process summary.
Due to the flexbility inherited in Pivot table, there are so many different ways a user can use the iPEP
Spectra data module to compares time-dependent process economics. In the following discussion, we only
show a few key comparisons.
The economic analyses of the NGL recovery plant and the fractionator plant were combined by adjusting
the capital and operating costs for each case to equal the fractionator NGL feedstock rate. The resulting
margins (defined as the product market value minus natural gas shrinkage using US Gulf Coast pricing)
were plotted in Figures 5.2 through 5.5. Propane was chosen to be the main product of the fractionator
while other NGL components are treated as by-products. Figure 5.2 shows the margin of each of three
“Rich” feed gases varied similarly over time for the conventional turboexpander, combined NGL recovery
and fractionation process recovering ethane in the NGL. Rich C feed gas consistently produced the highest
margin. Rich C has the highest natural gasoline content and hence yield of the three Rich feed gases. Natural
gasoline is currently the highest valued product. The margin is determined by the highest value component
in the NGL mixture.
Margins of the Rich A and Rich B feed gases are very close. Since about second quarter 2012, Rich B feed
gas’ margin is a little higher than the Rich A feed gas. However from about fourth quarter 2010 to first
quarter 2012, the margin of Rich A feed gas is seen to be a little higher than that of Rich B. The global
recession of 2008–09 dropped demand for NGLs, causing all these Rich feed gases to be unprofitable
(negative margin).
© 2016 IHS 101 December 2016

Figure 5.2 Effect of feed gases on margins for ethane recovery by the conventional turboexpander
combined with the fractionation process
2,500

BY CONVENTIONAL
RECOVERY RICH A FEED - USGC
1,500
Margin ($/t)

1000.0 BY CONVENTIONAL
500.0
BY CONVENTIONAL
0.00 RECOVERY RICH C FEED - USGC
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-500.00
The effect of the turboexpander process type on margins from Rich B feed gas for the combined NGL
recovery process and NGL fractionation process is shown in Figure 5.3 for ethane recovery and Figure 5.4
for ethane rejection. Figure 5.3 shows for ethane recovery, the margins are seen to be virtually identical
except during periods of peak demand. Close examination shows the conventional turboexpander process
provides slightly less margin than the other processes. During the peak periods, the margin differential
increases.
Figure 5.4 shows the margins for ethane rejection are also often almost identical except during periods of
strong demand for the NGLs. Unlike the ethane recovery case, the margins at the peaks for ethane rejection
are clearly highest for the conventional turboexpander process than for either of the more complex
processes. As expected, the order of the margins for the types of processes follow the order—conventional
greater than the GSP, which is greater than the RSV process, the inverse order of increasing capital cost:
conventional < GSP < RSV.
In either ethane recovery or ethane rejection case, propane and heavier NGL recoveries approach 99%. This
high recovery does not allow room for the better demethanization offered by the GSP and RSV processes
compared with the conventional turboexpander process. Revenue from recovered ethane has to exceed the
costs of recovery to have a positive margin.
© 2016 IHS 102 December 2016

Figure 5.3 Effect of turboexpander process type on ethane recovery margins for Rich B feed gas
2,000

BY CONVENTIONAL
1000.0
Margin ($/t)

BY GAS SUBCOOLED
500.0
BY RECYCLE SPLIT-VAPOR
0.00 RECOVERY RICH B FEED - USGC
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-500.00
Figure 5.4 Effect of turboexpander process type on ethane rejection margins for Rich B feed gas
1,300
1,100
900.0 PROPANE - FRACTIONATED NGL

BY CONVENTIONAL
700.0
REJECTION RICH B FEED - USGC
Margin ($/t)
500.0 PROPANE - FRACTIONATED NGL

BY GAS SUBCOOLED
100.0
BY RECYCLE SPLIT-VAPOR
-100.00 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 REJECTION RICH B FEED - USGC
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-300.00
-500.00
© 2016 IHS 103 December 2016

The performance of ethane recovery versus ethane rejection by the conventional turboexpander process
combined with fractionation is shown in Figure 5.5 for feed gases Rich B and Rich C. Feed gas Rich C
consistently outperformed feed gas Rich B. The curves vary similarly over time. For either feed gas, the
difference in margin between ethane recovery or rejection is generally small.
During periods when ethane recovery has the larger margin than ethane rejection, recovery is more
profitable for both Rich B and Rich C feed gases. Generally, margins are seen to be highest from second
quarter 2006 through third quarter 2014 (except at the height of the recession, when the margin for all cases
is negative). Since about first quarter 2012, ethane rejection processing either Rich B or C feed gas has been
more profitable than recovery.
turboexpander—Fractionation process for feed gases Rich B and Rich C
2,500

2,000
BY CONVENTIONAL
BY CONVENTIONAL
Margin ($/t)
RECOVERY RICH C FEED - USGC

1000.0
BY CONVENTIONAL
BY CONVENTIONAL
0.00
REJECTION RICH C FEED - USGC
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-500.00
© 2016 IHS 104 December 2016

6 Detailed process economics

Table 6.1 NGLs by conventional turboexpander process
Product: Mixed NGL
PEP Cost Index: 1107
Location: US Gulf Coast
Process: Conventional turboexpander process
Process description: Pretreated feed gas is first dried by molecular sieves and the stream split into two steams. The first stream is cooled to partially
condense NGLs by heat exchange with demethanizer overhead gas. The second stream warms the demethanizer reboiler and side reboiler. Both streams
are then recombined. Liquid and vapor are separated in a vertical drum. Liquid is cooled flowing through a Joule-Thomson expansion valve before
entering the demethanizer. The vapor is cooled by turboexpansion and enters at the top of the demethanizer. Overhead gas (sales gas) leaving the top
of the demethanizer is warmed by heat exchange with the feed gas. Overhead gas is compressed first by a booster compressor driven by the
turboexpander. The gas is further compressed to specification pressure by the residue compressor. The sales gas then is pipelined to customers.
Demethanizer bottoms flow to the reboiler where a portion vaporizes and returns to the bottom of the demethanizer. Liquid from the reboiler is the NGL
product.
When ethane is rejected, a separate reboiler heated by hot oil is used instead of the feed heated reboiler and side reboiler.
Tables of production costs of NGL recovery with ethane recovery or rejection from Rich B feed gas follow.
Table 6.1 NGLs by conventional turboexpander process—Variable costs of ethane recovery by

conventional turboexpansion (Rich B feed gas)
Variable costs Unit cost Consumption per lb Consumption per kg ¢/lb
Raw materials
Gas shrinkage 236 ¢/MMBtu 0.023103 MMBtu 5.10
Mole sieves 80 ¢/lb 0.000227 lb 0.02
Utilities
Electricity 3.78 ¢/kWh 0.133 kWh 0.293 kWh 0.50
Natural gas 236 ¢/MMBtu 516 Btu 287 kCal 0.12
Table 6.1 NGLs by conventional turboexpander process—Production costs of ethane recovery (Rich B feed
gas)
Mixed C2+ NGL 7.835 ¢/lb
a b
Capacity, million lb/yr 153 307 613
Investment, US$ million
Battery limits 17.5 28.3 49.6
Off-sites 7.6 12.4 21.4
Total fixed capital 25.2 40.7 71.0
Production costs, ¢/lb
Utilities 0.62 0.62 0.62
Maintenance materials 0.34 0.28 0.24
Operating supplies 0.08 0.04 0.02
Operating labor 0.83 0.41 0.21
Maintenance labor 0.34 0.28 0.24
Control laboratory 0.17 0.08 0.04
Plant overhead 1.07 0.62 0.39
Taxes and insurance 0.33 0.27 0.23
Depreciation 1.64 1.33 1.16
G&A, sales, research 0.70 0.60 0.54
Production cost 11.57 9.98 9.14
© 2016 IHS 105 December 2016

Table 6.1 NGLs by conventional turboexpander process—Production costs of ethane recovery (Rich B feed
gas) (concluded)
a b
ROI before taxes, 15% of TFC 2.46 2.00 1.74
Product value 14.03 11.98 10.88
G&A, sales, research 0.39
Production cost 9.77
ROI before taxes, -0-% of TFC -1.92
Market product value 7.85
a
of mixed C2+ NGL
b
base case
Table 6.1 NGLs by conventional turboexpander process—Variable costs of ethane rejection by

conventional turboexpansion (Rich B feed gas)
Raw materials
Mole sieves 80 ¢/lb 0.000393 lb 0.03
Utilities
Natural gas 236 ¢/MMBtu 1,220 Btu 678 kCal 0.29
Table 6.1 NGLs by conventional turboexpander process—Production costs of ethane rejection (Rich B feed
gas)
a b

Off-sites 7.6 12.4 21.4
Utilities 1.00 1.00 1.00
© 2016 IHS 106 December 2016

Table 6.1 NGLs by conventional turboexpander process—Production costs of ethane rejection (Rich B feed
gas) (concluded)
a b

Product value 19.68 16.08 14.24
ROI before taxes, 0% of TFC -2.40
a
of mixed C3+ NGL
b
base case
Table 6.2 NGLs by gas subcooled (GSP) turboexpander process

Product: Mixed NGL
Process: Gas subcooled turboexpander process
Process description: A lower expanded gas temperature can allow higher ethane recovery than the conventional turboexpansion process.
Similar to the conventional process, treated and molecular sieve dried feed gas is split into two streams. One stream is cooled to partially condense
NGLs in the residue gas exchanger by heat exchange with warmed demethanizer overhead gas. The second feed gas steam heats the demethanizer
reboiler and side reboiler. Both feed streams are recombined. Liquid and vapor are separated in a vertical drum. Liquid is cooled on flowing through a
Joule-Thomson expansion valve and charged to the demethanizer. The vapor is split into two streams. One stream is cooled as it flows through the
turboexpander and into the demethanizer. The other portion is cooled by heat exchange with demethanizer overhead in a subcooler exchanger. The
subcooled stream is further cooled by a Joule-Thomson expansion valve before entering the top of the demethanizer.
Overhead gas (sales gas) from the subcooler is further warmed by the residue gas exchanger before compression to specification pressure by the
turboexpander driven booster compressor and then by the residue gas compressor. The sales gas is then pipelined to customers.
product.
Tables of production costs as a function of feedstock and ethane recovery or rejection follow.
Table 6.2 NGLs by GSP turboexpander process—Variable costs of ethane recovery (Rich B feed gas)
Raw materials
Mole sieves 80 ¢/lb 0.000208 lb 0.02
Utilities
© 2016 IHS 107 December 2016

Table 6.2 NGLs by GSP turboexpander process—Production costs (ethane recovery, Rich B feed gas)

a b

Off-sites 8.4 13.6 23.6
Utilities 0.54 0.54 0.54
Product value 13.20 11.25 10.23
a
of mixed C2+ NGL
b
base case
Table 6.2 NGLs by GSP turboexpander process—Variable costs of ethane rejection (Rich B feed gas)
Raw materials
Mole sieves 80 ¢/lb 0.000338 lb 0.03
Utilities
© 2016 IHS 108 December 2016

Table 6.2 NGLs by GSP turboexpander process—Production costs (ethane rejection, Rich B feed gas)
a b

Off-sites 8.4 13.6 23.6
Utilities 0.95 0.95 0.95
Product value 18.08 14.90
a
of mixed C3+ NGL
b
base case
Table 6.3 NGLs by recycle split vapor (RSV) turboexpander process

Product: Mixed NGL
Process: Recycle split vapor turboexpander process
Process description: The RSV process more efficiently purifies the sales gas product, allowing higher ethane recovery, by providing recycled sales gas
as liquid reflux to the demethanizer.
Similar to the conventional and GSP processes, pretreated, molecular sieve dried feed gas is split into two streams. One steam is cooled by heat
exchange in a residue gas exchanger with subcooler warmed demethanizer overhead gas. The second feed stream heats the demethanizer reboiler and
side reboiler. Both feed gas streams are recombined and the vapor and liquid separated. Liquid flows through a Joule-Thomson expansion valve and
into the demethanizer. The vapor is split. One portion is cooled by Joule-Thomson expansion. The other portion is cooled by the subcooler exchanger
and further cooled by Joule-Thomson expansion before entering the demethanizer.
Demethanizer overhead gas is warmed in the subcooler and then in the residue gas exchanger. The gas is compressed to specification pressure by a
turboexpander driven booster compressor and a residue gas compressor. Unlike the conventional and GSP processes, the residue gas (sales gas) is
cooled in an air cooler and a portion is recycled through the subcooler, where it is cooled, and then through a Joule-Thomson expansion valve. The
cooled recycle gas refluxes the demethanizer.
product.
Tables of production costs as a function of feedstock and ethane recovery or rejection follow.
© 2016 IHS 109 December 2016

Table 6.3 NGLs by RSV turboexpander process—Variable costs of ethane recovery (Rich B feed gas)
Raw materials
Mole sieves 80 ¢/lb 0.000201 lb 0.02
Utilities
Table 6.3 NGLs by RSV turboexpander process—Production costs (ethane recovery, Rich B feed gas)
a b

Off-sites 8.8 14.3 24.9
Utilities 0.57 0.57 0.57
Product value 13.23 11.31 10.38
a
of mixed C2+ NGL
b
base case
© 2016 IHS 110 December 2016

Table 6.3 NGLs by RSV turboexpander process—Variable costs of ethane rejection (Rich B feed gas)
Raw materials
Mole sieves 80 ¢/lb 0.000326 lb 0.03
Utilities
Table 6.3 NGLs by RSV turboexpander process—Production costs (ethane rejection, Rich B feed gas)
Mixed C3+ NGL 9.600

a b

Off-sites 8.8 14.3 24.9
Utilities 1.08 1.08 1.08
Product value 18.25 15.15 13.63
a
of mixed C3+ NGL
b
base case
© 2016 IHS 111 December 2016

Table 6.4 NGL separation by generic fractionation process

Product: Propane with by-product ethane, n-butane, isobutane and/or natural gasoline
Process: Generic sequential fractionation
Process description: NGLs are separated in a series of distillation columns, each having a reboiler and condenser. Ethane, when present in
significant quantity, is removed first. Liquid mixed NGLs are fed to the deethanizer. Ethane containing vapor flows up and out the column to a partial
condenser where C2+ heavies are condensed and returned to the tower as reflux. Ethane vapor that may contain CO2, N2, or other noncondensibles,
depending upon the source of the feedstock, is the product. C3+ heavier components condense as they flow down the deethanizer. Liquid flows from
the bottom of the column to a reboiler where a portion is vaporized and returned to the column. The remainder of the bottoms liquid passes to the next
column, the depropanizer.
Propane is removed overhead from the depropanizer and is partially condensed. The liquefied C3+ heavies are returned to the tower as reflux. The
vapor is product propane. The depropanizer bottoms are C4+ liquid that is next debutanized.
In the debutanizer, natural gasoline is removed as liquid bottoms product from the reboiler. Mixed butanes are taken overhead and totally condensed.
A portion of the liquid butanes is returned to the column as reflux; the remainder passes to the C4 splitter.
The C4 splitter fractionates the lower boiling isobutane from the higher boiling n-butane. Isobutane flows overhead from the splitter to a total condenser.
A portion of the liquid isobutane is returned to the tower as reflux while the remainder is the isobutane product. Liquid n-butane from the reboiler is the
bottoms product.
When ethane is rejected, the NGL generally contains an insignificant concentration of ethane. In that case, the mixed NGL feed is fed directly to the
depropanizer, by-passing the deethanizer.
Tables of production costs for fractioning NGLs produced by conventional turboexpansion with ethane recovery or rejection from Rich B feed gas
follow.
Table 6.4 NGL separation by generic fractionation process—Fractionation of NGL from conventional
turboexpansion with ethane recovery (Rich B feed gas)
Raw materials
Mixed NGL Feed 7.835 ¢/lb 2.77726 lb 21.76
By-products
Ethane 5.805 ¢/lb -0.874895 lb -5.08
Isobutane 13.33 ¢/lb -0.17762 lb -2.37
n-Butane 12.17 ¢/lb -0.427878 lb -5.21
Natural gasoline 17.33 ¢/lb -0.284063 lb -4.92
Utilities
Natural gas 236 ¢/MMBtu 1,830 Btu 1,020 kCal 0.43
© 2016 IHS 112 December 2016

Table 6.4 NGL separation by generic fractionation process—Production costs (ethane recovery by
conventional turboexpansion, Rich B feed gas)
Propane 9.823 ¢/lb
a b
Off-sites 11.2 17.8 32.3
Raw materials 21.76 21.76 21.76
By-products -17.58 -17.58 -17.58
Utilities 0.70 0.70 0.70
Product value 11.64 9.82 8.92
a
of propane
b
base case
Table 6.4 NGL separation by generic fractionation process—Fractionation of NGL from conventional
turboexpansion with ethane rejection (Rich B feed gas)
Raw materials
Mixed NGL Feed 9.935 ¢/lb 2.15592 lb 21.42
By-products
Ethane 5.805 ¢/lb -0- lb -0-
Isobutane 13.33 ¢/lb -0.223483 lb -2.98
n-Butane 12.17 ¢/lb -0.552551 lb -6.72
Natural gasoline 48.52 ¢/lb -0.379860 lb -6.58
Utilities
© 2016 IHS 113 December 2016

Table 6.4 NGL separation by generic fractionation process—Production costs (ethane rejection by
conventional turboexpansion, Rich B feed gas)
Propane
a b
Off-sites 11.2 17.8 32.3
Raw materials 21.42 21.42 21.42
By-products -16.28 -16.28 -16.28
Utilities 0.78 0.78 0.78
Control laboratory 0.02 0.01 -0-
Product value 11.24 9.82 9.10
a
of propane
b
base case
© 2016 IHS 114 December 2016

7 Cost bases
Capital investment
Equipment costs are estimated primarily from correlations developed by PEP and supplemented
occasionally by vendors’ estimates. If an equipment item is specialized or contributes substantially to the
cost of the facility‚ a vendor’s quote has been obtained if possible. When necessary‚ the costs are corrected
to a PEP Cost Index of 1107.
Direct installation costs are estimated by a modular method developed by PEP; the details of which are
described in PEP Report 145‚ Battery Limits Cost Estimating (1982). The indirect costs in capital
investment are estimated by adding allowances for engineering‚ field expenses‚ overhead‚ purchasing‚ and
contractor’s profit. The bases for the estimation of these allowances are detailed in Section 7 of PEP Report
162‚ Computer Program for Estimating Plant Investment (1985). These indirect cost estimates are then
added to the direct investment (FOB costs plus direct installation costs) to get the overall installed costs.
Investment in utilities is computed for the entire plant and allocated to each major operation according to
use. Indirect costs for utilities and off-site tankage (generally raw material and product storage) are assumed
to be 20% of the direct utilities investment.
General service facilities not directly associated with process operations are assumed to be 20% of the
battery limits installed cost and utilities-plus-storage investment. An allowance for waste treatment facilities
is also made. These allowances are determined prior to the addition of contingencies to the installed costs.
The total fixed capital for the facility includes total investment in battery limits‚ utilities and tankage‚
general service facilities‚ and a contingency. Usually the contingency is taken as 25% each of the battery
limits investment and 25% of the off-site investment. All of the above investment estimates have been
calculated with the aid of the IHS PEPCOST II computer program.
In comparing the IHS estimates with actual plant costs or contractors’ estimates‚ the following should be
borne in mind:
• The processes may be generally the same, but differ enough in detail to affect costs significantly.
• The estimates may not be strictly comparable because of omission of process sections (e.g.‚ by-product
recovery) in one or another of the designs.
• Actual plants are frequently overdesigned for reasons unique to the particular situations.
• During periods of rapid escalation of equipment costs‚ and when long delivery times are ted‚ cost indexes
probably are not an accurate reflection of actual costs.
• During periods of depression in chemical plant construction‚ equipment vendors and engineering
contractors will provide goods and services at little or no profit.
Production costs
The operating labor wages are based on estimated prevailing rates in Houston‚ Texas. The base rate is
derived from US national average rates in industrial chemical plants‚ corrected to the Houston area on a
relative basis for production workers. With an allowance for fringe benefits and a 10% shift overlap
assumed‚ the effective total rate is $48.20 per hour. The operating labor requirements have been estimated
subjectively on the basis of the number of major equipment items in the process. The number of men per
© 2016 IHS 115 December 2016

shift includes the working foremen. The cost of staff supervision—such as the assistant operating
department manager‚ etc.—is assumed to be included in our allowance for plant overhead.
The total maintenance costs are estimated to be 6% of the battery limits investment. We have assumed a
50/50 split between materials and labor.
Plant overhead has arbitrarily been assumed at 80% of total labor. It includes all staff personnel located at
the plant site‚ and services directly associated with plant operations and maintenance.
G&A‚ sales‚ and research costs are assumed for each product by making allowances for the stage of process
development in estimating research expense‚ and for the character of marketing channels and technical
service requirements in estimating selling expense. These estimates are customarily assigned a percentage
of the sales value of the product‚ generally in the range of 5–30%. When actual prices are unknown‚ we
base the G&A‚ sales‚ and research expense on the calculated product value (total production cost plus
25%/yr pretax return on fixed capital).
The cost of taxes and insurance is calculated at 2% of total fixed capital. Depreciation is based on 10%/yr
of fixed capital.
Effect of operating level on production costs
Variations in production costs with plant capacity and with operating rate are based on the following
assumptions:
• The annual costs of process plant operating labor‚ control laboratory labor‚ and operating supplies are
invariant with plant capacity. Also‚ the entire process plant labor force remains on the when the plant is
operating at reduced capacity or is shut down.
• Investment-related items‚ including maintenance labor‚ maintenance materials‚ taxes‚ and depreciation‚
are directly proportional to investment‚ and their annual cost remains constant with reduced operating
rate.
• Corporate overhead charges are constant to various plant capacities‚ and the annual allocation is constant‚
regardless of plant operating rate.
• Production costs generally do not include any allowance for packaging or shipping; i.e.‚ they are bulk
costs‚ FOB plant.
• Working capital is not included in the fixed capital cost‚ nor is start-up costs. Interest on capital is not
included in the production cost or in the product value.
• Royalties are not included in any of the estimates. Royalties for any given licensed process may vary
considerably‚ depending on terms of the agreement‚ geographic location‚ etc. Initial payments or royalties
may be substantial‚ and they should be considered in specific estimates.
• Annual costs for raw materials and utilities are directly proportional to the annual plant production.
In accordance with the last assumption‚ unit costs for raw materials and utility consumptions do not change
with either plant capacity or operating rate.
© 2016 IHS 116 December 2016

APPENDIX A
Cited references
Appendix A—Cited references
© 2016 IHS 117 December 2016

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83–88
86 Snell, J. e., "Worldwide Gas Processing," Oil Gas J., 99, 26 (June 25, 2001), 80–107
87 Esteban, A., et al., "Exploit the Benefits of Methanol," Proceedings. Gas Processors Association Seventy-
Ninth Annual Convention, Atlanta, Georgia. (March 13–15, 2000). Gas Processors Association, Tulsa, OK,
45–81
88 Rhinesmith, R. B., et al., "A Technical and Economic Analysis of Turboexpander Efficiencies on Liquids
Recoveries for Cryogenic Gas Plants," Proceedings. Gas Processors Association Seventy-Ninth Annual
Convention, Atlanta, Georgia. (March 13–15, 2000). Gas Processors Association, Tulsa, OK, 184–97
89 Minkkinen, A., et al., "Deep Liquids Extraction From Natural gas," Proceedings. Gas Processors Association
Seventy-Ninth Annual Convention, Atlanta, Georgia. (March 13–15, 2000). Gas Processors Association,
Tulsa, OK, 348–62
90 Gerritsen, J. W., et al., "New Deep Cut Process for NGL Recovery," Proceedings. Gas Processors Association
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Association Seventy-Ninth Annual Convention, Atlanta, Georgia. (March 13–15, 2000). Gas Processors
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98 BP Plc, "Isobutane Specifications", BP Whiting Refinery, (4/26/01) Web Page URL

http://www.whitingrefinery.com/Products/isosbutane.htm, (Sept. 1, 1927)
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© 2016 IHS 121 December 2016

APPENDIX B
Product yields
Appendix B—Product yields
© 2016 IHS 122 December 2016

Overall fractionated NGL gas plant yields, wt% feed gas—Ethane recovery
Process Rich A Rich B Rich C Lean
Conventional turboexpansion
Sales gas 83.61 82.85 84.41 94.26
Acid gas 0.09 0.08 0.10 0.03
Ethane 8.11 5.40 3.64 3.35
Propane 5.12 6.18 4.05 0.91
Isobutane 0.78 1.10 1.59 0.16
n-Butane 1.36 2.64 1.70 0.15
Natural gasoline 0.94 1.75 4.52 1.15
Total 100.00 100.00 100.00 100.00
GSP turboexpansion
Sales gas NA 81.24 81.45 93.83
Acid gas NA 0.08 0.39 0.03
Ethane NA 6.92 6.31 3.79
Propane NA 6.26 4.13 0.90
Isobutane NA 1.10 1.58 0.16
n-Butane NA 2.64 1.68 0.15
Natural gasoline NA 1.75 4.46 1.15
Total NA 100.00 100.00 100.00
RSV turboexpansion
Sales gas 80.24 80.57 84.36 93.55
Acid gas 0.15 0.10 0.07 0.03
Ethane 11.13 7.56 3.36 4.06
Propane 5.39 6.27 4.38 0.90
Isobutane 0.78 1.10 1.60 0.16
n-Butane 1.37 2.65 1.71 0.15
Total 100.00 100.00 100.00 100.00
© 2016 IHS 123 December 2016

Fractionation plant yields, wt% feed gas—Ethane rejection

Process Rich A Rich B Rich C Lean
Conventional turboexpansion
Sales gas 92.41 90.08 88.53 98.11
Acid gas 0.00 0.00 0.00 0.00
Ethane 0.00 0.00 0.00 0.00
Propane 4.57 4.60 3.71 0.49
Isobutane 0.75 1.03 1.56 0.13
n-Butane 1.33 2.54 1.68 0.13
Total 100.00 100.00 100.00 100.00
GSP turboexpansion
Sales gas 91.70 88.45 87.89 97.48
Acid gas 0.00 0.00 0.00 0.00
Ethane 0.00 0.00 0.00 0.00
Propane 5.24 6.08 4.30 1.06
Isobutane 0.77 1.09 1.59 0.16
n-Butane 1.35 2.63 1.70 0.15
Total 100.00 100.00 100.00 100.00
RSV turboexpansion
Sales gas 91.27 88.02 87.71 97.45
Acid gas 0.00 0.00 0.00 0.00
Ethane 0.00 0.00 0.00 0.00
Propane 5.64 6.48 4.45 1.09
Isobutane 0.78 1.10 1.60 0.16
n-Butane 1.37 2.65 1.71 0.15
Total 100.00 100.00 100.00 100.00
© 2016 IHS 124 December 2016

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Process Summary—Natural Gas

December 2016 ihs.com

PEP Review 2016-05

PEP Review 2016-05

© 2016 IHS 1 December 2016

© 2016 IHS 3 December 2016

© 2016 IHS 4 December 2016

© 2016 IHS 5 December 2016

Figure 4.4 World LPG production by source—2015 78

© 2016 IHS 6 December 2016

© 2016 IHS 7 December 2016

© 2016 IHS 8 December 2016

• Conventional turboexpander process

• Simplified gas subcooled turboexpander process

• Simplified recycle split vapor turboexpander process

© 2016 IHS 9 December 2016

Figure 1.1 Overview of natural gas and NGL processing

Combined wet wellhead gas

Gas Treating Plant

Liquefaction Plant LNG Product

Sales Gas Product

Source: [7] © 2016 IHS

• Conventional turboexpander process (conventional)

• Simplified gas subcooled turboexpander process (GSP)

• Simplified recycle split vapor turboexpander process (RSV)

Table 1.1 Three types of separation processes

Cascade refrigeration 70% 85% 95% 100%

© 2016 IHS 11 December 2016

© 2016 IHS 12 December 2016

Table 1.2 Selected commercial NGL recovery processes

Comparison of process economics

© 2016 IHS 13 December 2016

Figure 1.2 Comparison of technologies—Capital intensity

Ethane Recovery, C2+ NGL Ethane Rejection, C3+ NGL

Source: IHS © 2016 IHS

Source: IHS © 2016 IHS

© 2016 IHS 14 December 2016

Figure 1.3 Comparison of technologies—Production costs, ethane recovered

5.00 Variable Costs

Source: IHS © 2016 IHS

Figure 1.4 Comparison of technologies—Production costs, ethane rejected

Product Value, ₵/lb C3+ NGLs

20.00 Total Direct Costs

Source: IHS © 2016 IHS

© 2016 IHS 15 December 2016

Source: IHS © 2016 IHS

Source: IHS © 2016 IHS

© 2016 IHS 16 December 2016

Historical economics comparison—An iPEPSpectra™ analysis

© 2016 IHS 17 December 2016

PROPANE - FRACTIONATED NGL

1,500 PROPANE - FRACTIONATED NGL

RECOVERY RICH C FEED - USGC

Source: IHS © 2016 IHS

© 2016 IHS 18 December 2016

Natural gas processing

Natural gas treating

© 2016 IHS 19 December 2016

Figure 2.1 General configuration of non-associated natural gas processing

Field Raw Gas

Sales Gas Product

Source: IHS © 2016 IHS

© 2016 IHS 20 December 2016