WORLDWIDE GAS-PROCESSING ACTIVITY LEVELS OUT

Warren R. True
Pipeline/Gas Processing Editor

Gas-processing worldwide showed steady growth in 1990.

U.S. and Canada continued to dominate gas-processing with the majority of the world's capacity, throughput, and production. This was evident in the most recent exclusive Oil & Gas Journal gas-processing survey.

The survey is also accompanied by the Journal's annual compilation of sulfur-recovery capacity. That listing shows that petroleum-derived sulfur produced outside the U.S and Canada gained last year.

Gas-plant capacity and throughput outside the U.S. grew slightly last year, with moderate increases in Latin America and Canada.

As would be expected, the Persian Gulf War disrupted any expansion plans for the Middle East countries.

These developments are reflected in the plant-by-plant, worldwide gas-processing survey (pp. 54) along with international survey of petroleum-derived sulfur recovery (pp. 85).

Although 1990 was a quiet year insofar as major capacity or production changes are concerned, current construction, especially in the U.S., the Caribbean, and Canada, promise significant increases in the next survey.

INDUSTRY TRENDS

Slightly more gas-processing capacity was available last year than in 1989 to process more gas (Table 1). Activity is concentrated in North America where last year Canada and the U.S. accounted for some 60% of worldwide gas processing capacity, reported 64% of the throughput, and produced 60% of the world's NGL.

Processing capacity worldwide (outside the Soviet Union and China) advanced by slightly more the 2.3 bcfd (1.5%) in 1990 compared with 1989 OGJ figures.

Worldwide gas-plant capacity has been moving ahead steadily in the past 4 years, reversing an earlier 3-year period of reduction in the number of plants between 1985 and 1989.

That decline was reversed in 1988 with a total of 1,424 plants reported to be operating. And the growth continued in 1989 when 1,475 plants worldwide were reported in operation and in 1990 when 1,478 were operating.

Plant construction for 1990 reversed the decline evident in 1989 (Table 2).

Gas reserves are shown in Table 3 and production in Table 4.

Natural-gas throughput for 1990 moved ahead by 2.1 bcfd (2.3%) over 1989.

Production of NGL showed a healthy increase from 1989, up 4.8 million gpd (114,286 b/d; 3.4%).

Canada and the U.S. continue to dominate world sulfur recovery with almost 60% of available capacity.

In 1990, Canada led all countries and regions with 31% of total world capacity. Most of Canada's sulfur recovery capacity is tied to its production of sour natural gas.

U.S. sulfur-recovery capacity, primarily in petroleum refineries, was at 28.5% of world capacity.

The shares of world sulfur-production capacity held by Canada and the U.S. fell last year. The rest of the world's capacity (excluding the U.S.S.R. and China) increased.

U.S. PICTURE

Despite flat growth in recent years, the U.S. continues to hold the largest concentration of the world's gas-processing capacity (43.5%; Table 1), although its proved gas reserves make up less than 7% of the world's outside the Soviet Union and China.

U.S. gas-processing capacity, throughput, and production gained moderately last year (Fig. 1) after 2 years of flat growth (OGJ, July 9, 1990, p. 41; July 10, 1989, p. 33) following good growth in 1987 (OGJ, July 11, 1988, p. 33).

The industry in 1990 returned to a downward trend in plants operated, however, after reversing a 5-year downward trend in 1989. For 1990, 27 fewer plants were operating in the U.S. than in 1989. For 1989, however, 19 more were in operation than in 1988.

Between 1986 and 1988, plants operated had dropped by 120 ( 14%); since 1984, by 127 (-14.8%).

U.S. capacity increased somewhat in 1990 over 1989, by almost 1.65 bcfd (2.5%). Capacity in 1989 had held flat when compared with figures for 1988, increasing only 367 MMcfd (0.55%).

Despite the drop in plants 1984-1988, U.S. capacity has declined by only 366 MMcfd (-O.5%), rising slightly in 1987 and again in 1990.

Throughput increased for 1990 over 1989: up 1.7 bcfd (4%). This improves on the modest growths seen in 1988 of 550 MMcfd and 1989 of 909 MMcfd. Reported U.S. throughput has increased 4 years running.

U.S. plant utilization improved again in 1990, to 64.5%, but continued the slowing growth evident in recent years: 63.7% in 1989; 62.7% in 1988; 60.9% in 1987; and 55% in 1986.

U.S. production showed healthy improvement in 1990 compared with 1989 figures. Daily 1990 production was up 2.9 million gal (about 69,000 b/d) compared with a decline in 1989 of 3.9 million gpd (Fig. 1).

SLATE-BY-STATE

For 1988, Oil & Gas Journal survey data (OGJ, July 10, 1989, p. 46) included for the first time specific throughput and production figures from Phillips Petroleum Co. The company is by far the world's largest processor of natural gas and producer of NGLs.

Prior to that time, only capacity figures for Phillips' plants were available. State-by-state plant throughput figures for the company were estimated as a percentage of rated capacities, while production figures were available only in aggregate.

State-by-state comparisons of U.S. throughput and production could therefore only be made for years following 1988.

For 1990, Texas continued to lead all states with 301 gas plants, down from 315 in 1989, 311 in 1988, and 325 in 1987. The number of plants has been falling steadily since 1983.

Texas' throughput was slightly less than 10.5 bcfd, off 199 MMcfd (-2%) from 1989.

Texas' production as usual outstripped that of any state at slightly more than 28 million gpd (667,231 b/d) in NGL.

Texas' share of 1990 U.S. capacity was 24.2%; of daily throughput, 23.9%. Of total daily U.S. 1990 NGL production, however, Texas had 42%.

Louisiana, with 75 gas plants, 5 fewer than in 1989, led states in gas-processing capacity with 18.7 bcfd (Texas having 16.5 bcfd) and surpassed Texas in 1990 with throughput of 11.4 bcfd. Louisiana remained second in NGL production with 9.8 million gpd (234,152 b/d).

Louisiana's share of capacity was 27.4%, of throughput 25.8%, and of production 14.6%.

Combined capacities for Louisiana and Texas (35.1 bcfd) represented 51.5% of total U.S. 1990 daily capacity; throughputs (21.86 bcfd), slightly less than 50%; and NGL production (37.86 million gpd, or 901,336 b/d), 56.3%.

Reported Oklahoma processing grew 245.2 MMcfd in capacity, 183 MMcfd in throughput, and 1,038,200 gpd in production from 1989.

With the increasing push of natural gas as a clean-fuel alternative, processing capacities and throughput in the states of Texas, Oklahoma, and Louisiana along with other gas-producing states will likely continue their gradual climb suggested by last year's figures. However, the low prices that producers are getting for their gas is certainly a negative factor that could, if it continues, dampen growth.

Texas and Louisiana will continue to dominate in NGL production, however. Demand for ethane and propane as olefin plant feedstocks and increasing attractiveness of C3s and C4s as alternative vehicle fleet fuels should sustain upward pressures on their production from gas plants. The outlet for normal butane (after isomerization and dehydrogenation) as feedstock for methyl tertiary butyl ether should also grow as the use of oxygenates in reformulated fuels expands.

On the other hand, gasoline volatility restrictions will cut back on gasoline demand for butane as a blend component.

Processing capacities and throughputs for the states of Wyoming, Colorado, and New Mexico will show moderate growth in the immediate future as plans advance for gas movements from these areas, especially Wyoming, into California and toward U.S. Northeast markets.

WORLD ACTIVITY

Oil & Gas Journal's data for 1990 show that total gas-processing capacity for the world's plants outside the U.S. made modest gains in 1990. Throughput also improved slightly as did total production outside the U.S.

In relation to the world totals, 1990 capacities for countries of the Asia-Pacific region made up 13.5% of total non-U.S. capacities and 7.6% of worldwide capacities including the U.S.; throughput, 16.5% of non-U.S. and 8.8% of all; and production 9.5% of non-U.S. and 5.2% of all.

Worldwide capacity outside the U.S. (and the Soviet Union and China) increased 663 MMcfd (1.3%) in 1990 over 1989.
Most regions showed gains of less than 1% with volume increases ranging between 335 MMcfd for Canada and 3 MMcfd for Africa.
Canadian companies for 1990 reported a total of 539 plants operating in the four provinces processing gas; for 1989, companies reported 512 plants operating (Fig. 2).
Capacity increased marginally in Canada, up 335.5 MMcfd (1.3%).
Natural-gas throughput gains outside the U.S. approached 387 MMcfd (0.8%) over non-U.S. throughput for 1989. Canada and Latin America showed the largest gains.
Canadian throughput was up 350 MMcfd (2.2%); Latin America's, 208 MMcfd (2.21%).
Total production outside the U.S. also advanced almost 2 million gpd (25,438 b/d; 2.4%; Table 1). Latin American net production advanced last year, up almost 2 million gpd (46,662 b/d; 9.23%) over 1989.

Mexico reported an increase in production on the order of 2.5 million gpd (approximately 58,925 b/d; 19.5%). Virtually all of this was increased ethane production reported by Petroleos Mexicanos for six plants operated at Cactus, Chiapas.

Other production gains for regions outside the U.S. were more modest. Countries of the Middle East reported that NGL production increased by 94,000 gpd (2,238 b/d; 1.2%); Canada reported 1990 production ahead of 1989 by 75,600 gpd (1,800 b/d; 0.3%).

WHAT'S HAPPENING

The hotbed of major gas-plant construction in the U.S. is Mobile Bay (Ala.).

There, Shell Offshore is nearing completion on its 200-MMcfd Yellowhammer sour-gas processing plant associated with gas production from its Mobile Bay fields.

Some pipelines for that plant were installed over the winter 1990-91, the remainder are being laid now. Plant commissioning is targeted for later this year.

In the very early stages of construction also in the area is Exxon Co.'s 300-MMcfd sour-gas plant.

It is expected to come on line in 1993.

And Mobil Exploration & Producing U.S. Inc. plans another 250-MMcfd gas-treating plant next to Mary Ann field's current plant near Coden, Ala.

In Texas, Marathon Oil Co. started up a 100-MMcfd gas plant in Yates field in West Texas.

And in Bee County, a 50-50 joint venture of Mitchell Energy & Development Corp., The Woodlands, Tex., and Transco Energy Co., Houston, completed a 60-MMcfd plant.

It will produce 110,000 gpd of C2+.

Maxus Energy Corp., Dallas, will build a 160-MMcfd plant in the Texas Panhandle to come on line in first quarter 1993.

Last fall, Union Pacific Resources, Ft. Worth, completed a 100-MMcfd upgrade to 520 MMcfd of its Carthage plant to serve increasing volumes coming out of East Texas.

In the busy San Juan basin area of New Mexico in March, Williams Field Services Co., Salt Lake City, started up its Milagro gas-treating plant near Blanco. It removes CO2 from coalbed methane.

Construction on a third train of the 360-MMcfd plant was begun in May. Contracts have been let for gathering and processing as much as 420 MMcfd with increases to 500 MMcfd expected by next year.

The plant is part of the $136 million Manzanares coalseam project, which includes a 120-mile gathering system laid in the fall 1990.

Elsewhere, Phoenix Park Gas Processors Ltd., a consortium of the National Gas Co. of Trinidad and Tobago Ltd., Conoco Inc., and Pan West Engineers & Constructors Ltd. is commissioning a 650-MMcfd plant near Point Lisas on the island of Trinidad.

The plant will use a proprietary turboexpander-based process that recovers 98% of the inlet propane and essentially all the butanes and heavier.

The raw mix will be fractionated into HD-5 propane, mixed butanes, and natural gasoline products. The propane and mixed butanes will go to refrigerated atmospheric pressure storage.

The C5+ stream will be sold by pipeline to a local refinery.

Along with the Mobile Bay plants, the most highly publicized project in North America has been Shell Canada Ltd.'s Caroline project in Alberta which calls for a plant to process up to approximately 300 MMcfd of sour gas from the Caroline and nearby Bearberry fields.

The fields represent the largest sour-gas find in Western Canada in 20 years, according to Shell Canada Ltd. which has this spring begun construction of the plant after wrangling with its partner, Husky Oil Ltd.

Caroline gas contains up to 35% H2S; the adjacent Bearberry field, up to 90%. Table 5 shows the composition at Caroline.

A Claus sulfur recovery unit, followed by a SCOT tailgas cleanup unit, will achieve an overall sulfur recovery of 99.8% under normal operating conditions.

At the Caroline plant site, storage in covered tanks and buried pits for 8,000 tons of sulfur will be provided along with a site for 630,000 tons of solid sulfur.

SULFUR RECOVERY

Given the hydrogen sulfide level of Bearberry natural gas and other Alberta gas streams, it is not surprising that for 1990, Canada continued to lead the world in petroleum-derived sulfur recovery capacity with 30,354 metric tons/day. The U.S. had 27,580 metric tons/day, mostly in petroleum refineries.

Canadian figures represent a slight drop of 296 metric tons/day; the U.S., a slight increase of almost 200 metric tons/day.

Total worldwide sulfur-recovery capacity in 1990 rose fractionally to 96,916 metric tons/day, up 592 metric tons/day from 1989.

World sulfur-recovery capacity outside Canada and the U.S reached 38,982 metric tons/day last year, also up less than 1%.

Production of sulfur increased last year, with most of the gains coming outside the U.S. and Canada.

Production exclusive of Canada and the U.S. reached 20,822 metric tons/day, an increase of 1,374 metric tons/day (7%).

Canada produced 15,770 metric tons/day of sulfur in 1990; the U.S., 10,074 metric tons/day. Canada's figure represents a drop of less than 1%; the U.S.', a rise of approximately 1%.

Total 1990 world production of petroleum-derived sulfur, including Canada and the U.S., stood at 46,666 metric tons/day, up from figures for 1989 by 1,7223 metric tons/day (3.8%).