Overview Gas & NGL Processing

Transcription

1 Overview Gas & NGL Processing

2 Topics Energy consumption & natural gas s place Natural gas sources Relationship with petroleum Basic economics of natural gas & NGL Trends for prices What are appropriate margins for the industry? Gas processing as part of total production system 2

3 Energy consumption & natural gas s place

4 Growth of U.S. Energy Consumption Energy Consumed (Quad = BTU) Wood Hydroelectric Power Nuclear Electric Power Coal Natural Gas Petroleum Source: , Energy Perspectives: A Presentation of Major Energy and Energy-Related Data, U.S. Department of the Interior, 1975; , Annual Energy Review 2011, Table

5 World Energy Consumption by Source Growth will not be uniform among all energy sources Renewable & nuclear power projected to be fastestgrowing energy sources, increasing by 2.5% per year Natural gas fastest growing fossil fuel, increasing by 1.7% per year Coal grows faster than petroleum because of China s increasing consumption Source: International Energy Outlook 2013, U.S. Energy Information Agency 5

6 Energy Markets Are Interconnected 6

7 Origins of Oil & Gas Organic life buried in sedimentary rock Transformation to hydrocarbons Migration from source rocks Accumulation of oil & gas Flow of oil & gas through porous media 7

8 Petroleum & Natural Gas Consumption influenced by production & cost of fuels 8

9 Flow of Natural Gas in U.S. Natural Gas Annual,

10 Overview of Natural Gas Gathering & Processing Fundamentals of Natural Gas Processing, 2 nd ed. Kidnay, Parrish, & McCartney 10

11 Natural Gas Resources Petroleum & natural gas formed from decomposing organic matter in source rock Conventional gas & liquids migrate through permeable rock toward the surface until it is stopped by some trapping mechanism Unconventional gas & liquids are trapped at the source rock because of extremely low permeabilities Dec. 5, 2012 update, 11

12 North American Conventional Gas Fields 12

13 North American Offshore Gas Fields 13

14 North American Shale Gas Plays 14

15 Marcellus & Utica Shale Formation Map 15

16 Worldwide Shale Oil & Gas Shale oil & gas have the potential to dramatically alter world energy markets Source: Supplemental presentation is support of International Energy Outlook 2013, U.S. Energy Information Agency 16

17 Expected Natural Gas Production by Source Retrieved November 26,

18 U.S. Gas Processing & Transportation U.S. Energy Mapping System, retrieved January 10,

19 Gas Plants Capacities in U.S. Lower

20 U.S. Gas Transportation, Storage, & Terminals U.S. Energy Mapping System, retrieved December 31,

21 Interstate Natural Gas Flow Natural Gas Annual,

22 Basic economics of natural gas & NGL

23 Energy & Oil Prices Prices retrieved January 1,

24 Energy & Oil Prices Prices retrieved January 1,

25 Price Changes With Time Prices updated January 1, 2018 Sources: & 25

26 Price Changes With Time Prices updated January 1, 2018 Sources: & 26

27 No Such Thing as a Global Gas Price 27

28 NGLs Can Bring Value Prices updated January 1, 2018 Sources: & 28

29 NGLs Can Bring Value Prices updated January 1, 2018 Sources: & 29

30 NGLs Can Bring Value Prices updated January 1, 2018 Sources: & 30

31 Economic Spreads NGL Frac spread Difference between the value of components in NGL vs. retaining in the natural gas Frac Spread = (Value as liquid product) (Value as component of natural gas) Can include value of mixture of C 2, C 3, ic 4, nc 4, & C 5 + Can be tailored to meet actual NGL compositions Some prices may be difficult to obtain on a daily basis o NYMEX C 2, C 3, nc 4, & C 5+ from Can be expressed as $/MMBtu (ideal gas heating value) or $/bbl (NGL volume) Make use of values for standard liquid density & heating value NGL frac spread requires a definition for NGL composition Spark spread More important to electricity producer rather than gas processor Gross margin of a gas-fired power plant selling a unit of electricity having bought the fuel to produce it 31

32 Example Propane Frac Spread Using (Last) February values: Propane - $ per gal Natural gas - $3.300 per MMBtu Propane conversion factors: 91,563 Btu/gal ideal gas gross heating value & standard liquid density Calculation: Btu 1, 000, 000 $ MMBtu $ Spread gal Btu MMBtu 91, 563 gal $4.372 per MMBtu Values retrieved January 10,

33 NGLs Can Bring Value Prices updated January 1, 2018 Sources: & 33

34 NGLs Can Bring Value Prices updated January 1, 2018 Sources: & 34

35 Gas processing as part of total production system

36 Total Production System CO for EOR 2 Gas Lift and Injection Sales Gas to Pipeline Crude Oil Gas Processing Module Ethane Propane N-Butane LPG I-Butane Natural Gasoline Plant Condensate Sulfur NGLs Field Condensate Compression (optional) Field Treating (optional) Solution Gas Production Separators Oil Well Gas Well Production Separators Gas Well Gas Cap or Associated Gas Non-associated Gas Oil Water Water Water J.M. Campbell & Company Adapted from Gas Processors Association (GPA), Tulsa, Oklahoma 36

37 Overview of Gas Plant Processing Fundamentals of Natural Gas Processing Kidnay, Parish, & McCartney, CRC Press,

38 Summary

39 Summary Natural gas supplies nearly 30% of the US s energy Contribution expected to continue to grow Production May be associated with petroleum production Unconventional sources shale & coal Primary distribution via pipelines Gas processing near the mouth of the pipeline system NGLs bring value Comparison is the value as a liquid vs the heating value as part of the natural gas 39

40 Supplemental Slides

41 How do energy prices compare? 41