Wednesday, February 21, 2018

Primer On Natural Gas Liquids -- US Dept Of Energy -- December, 2017


February 22, 2018: be sure to watch comments. I can't bring them all to the main post (it would get too cluttered) but this one is too important to lose. From a reader:
The line to Alberta might well ship both ethane and propane either in batches or separated by pigs.
The huge cracker in India built by Reliance Industries is being fed by a virtual pipeline of brand new, built -for-purpose ethane carrying ships out of Morgan's Point.
Reliance said that even with transportation costs (halfway around the world), they are still profiting $300 million/year more rather than using naptha.

This shipping or liquefied ethane is a new industry entirely with Marcus Hook and Morgan's Point being the ports of origin. 
Original Post
For an understanding of natural gas liquids, a reader recommends this monograph: "Natural Gas Liquids Primer: With a Focus on the Appalachian Region" produced by the US Department of Energy, December, 2017.

Clicking on this link will result in a pdf that will load on your desktop, or you can click on this link which will lead you to the pdf link.

This link will also be found at the "Data Links" page tabbed at the top of the blog.


And this blows me away.

The first thing I wanted to check: the volume of natural gas liquids produced in the Appalachian region, now that we know that number of North Dakota (posted earlier today or yesterday -- see below).

Hold your breath.

From the monograph linked above:

If I'm reading the graph correctly, and it's not a particularly difficult graph to read:
  • in 2013, the Appalachian region was producing less than 250,000 bbls of NGL daily
  • in 2016, production had jumped to 1.2 million bbls / day
  • through 2049, production tends to level off at 1.2 million bbls daily
So? So what? What's the point?

The Appalachia (Marcellus/Utica) is a natural gas play. It's producing about 1 million bbls NGLs on a daily basis and is projected to level out at that level.

But yesterday, from this post:
  • North Dakota produces more than 400,000 bbls of NGLs daily
  • this NGL production will more than double by the 2030s -- ranging from from 800,000 to 1 million bbls daily
Okay, you can breathe now. I may be missing something or misreading something, but it seems fairly straightforward.

But there's more.

This is not as interesting, perhaps, but it certainly helps put things into perspective. This graph is from the same monograph:

This is annual production of natural gas in the Appalachian region, measured in trillions of cubic feet. Currently it looks like the region is producing around 8 trillion cubic feet annually but just a few years ago, half that much, about 4 trillion cubic feet. But just for the fun of it, let's call it 3.65 trillion cubic feet, divide by 365 and come up with 10 billion cubic feet / day.

North Dakota is producing 2 billion cubic feet / day. Yes, ten billion is 5x two billion -- a huge difference but it's not exponentially different.

I am simply blown away. The natural gas comparison might not be that remarkable, but the natural gas liquid comparison certainly caught my attention. It certainly helps explain why the NDIC and industry leaders in North Dakota have a sense of urgency about this issue. Even if there were no caps on flaring, what will the industry do with all this "by-product."

Disclaimer: especially for newcomers -- I often make simple arithmetic errors. I am inappropriately exuberant about the Bakken. I see things that may not exist. On many of the things I post I feel I am in a distinct minority. C'est la vie.

A Summer Song

A Summer Song, Chad and Jeremy

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