Warren R. True
Pipeline/Gas Processing
Editor
Growth in the world's natural gas processing industry slowed somewhat in 1993 after strong expansion a year earlier.
In 1993, slower growth was more evenly distributed among the world's regions than in 1992 with the U.S. and Canada adding capacity along with the Middle East and Asia Pacific.
Capacity and throughput grew modestly for most of the rest of the world with somewhat larger increases appearing in the Middle East and Asia Pacific.
The U.S. and Canada continue to lead the world in capacity with more than 107 bcfd; in throughput with almost 76 bcfd; and in production with nearly 115 million gpd (2.7 million b/d).
The two countries also continued to lead the world in petroleum derived sulfur production with more than 54% of the world's capacity and production last year.
Oil & Gas Journal's recent exclusive, plant by plant, worldwide gas processing survey (p. 63) and its international survey of petroleum derived sulfur recovery (p. 109) reflect these trends.
For some Alberta plants whose operators failed to report 1993 information, this year's report supplements for the first time operator supplied capacity and production data for the province with figures from its Energy Resources Conservation Board (ERCB). This therefore prevents specific comparisons with 1992 or earlier Canadian data.
In general, however, ERCB data confirm what the reported data suggest, that Alberta experienced capacity and production increases in 1993 which were in line with those in the U.S. and the rest of the world.
Significant new capacity is being built in Alberta, elsewhere in North America, and worldwide, as will be discussed presently.
In Middle Eastern countries, capacity in 1993 grew by 600 MMcfd last year, while capacity in countries of the Asia Pacific region grew by 865 MMcfd.
Record economic growth in Asia the prime market for NGLs produced in the two regions is the reason for very strong growth in natural gas and LPG production.
INDUSTRY TRENDS
The largest share 40.3% of the world's gas processing capacity continues to reside in the U.S. Likewise, at Jan. 1, the U.S. was pushing the largest share 41.5% of the world's produced natural gas through that capacity.
NGL production in the U.S. also ranked first in the world: 37.6%.
Canada maintained its position as the second leading gas processing region with 19.8% of the world's processing capacity, 24.7% of its throughput in 1993, and 20.7% of its NGL production.
North America therefore dominated gas processing activity again in 1993 with Canada and the U.S. accounting for more than 60% of worldwide gas processing capacity, nearly 66% of throughput, and more than 57% of world NGL production.
The number of gas plants operating last year stood at 1,617 worldwide, continuing a 6 year upward trend. The 1987 number of 1,407 was the lowest since 1983.
Plant construction for expansions and new capacity increased last year (Table 2). New capacity was or is being added in Canada, the U.S., the U.K., the Middle East, and Asia Pacific. A discussion of major projects for last year and the first half of 1994 rounds out a look at the numbers from OGJ's annual survey of operating gas plants.
Gas reserves are shown in Table 3; production in Table 4. Table 5 presents the top 10 NGL producing nations in the world.
Canada and the U.S. continued as world leaders in petroleum derived sulfur recovery in 1993, holding more than 54% of the world's processing capacity and production.
For worldwide production of petroleum derived sulfur last year, Canada accounted for more than 31% of the overall total; the U.S., more than 23%.
U.S. PICTURE
Gas processing capacity in the U.S. last year improved over that for 1992, up by almost 1.9 bcfd. Throughput improved by nearly 1.3 bcfd. Both had declined from 1991 to 1992.
The turnaround in 1993 reflects greater natural gas production in the U.S. 19.2 tcf for 1993 vs. 18.6 tcf for 1992 as well as stronger NGL prices, at least through second quarter (OGJ, Mar. 14, p. 86; Mar. 8, 1993, p. 32).
But by the end of the year, the squeeze on processing margins was all too evident. A colder than expected winter kept LPG demand strong nevertheless, and drawdown of storage inventories of LPG approached records.
The other major story for U.S. processors was the move toward ethane rejection, primarily in the Rocky Mountain region. Gulf Coast petrochemical plants switched among available NGLs for feedstock, depending on price, and generally left the more expensive lighter fractions begging for markets.
Overall, however, the U.S. continued to hold the largest share of worldwide gas processing capacity (more than 40%; Table 1).
The total of U.S. gas plants operating decreased by only 1, further evidence of the overall downward trend in U.S. plants since 1984 and the increased efficiencies of existing plants. Since 1994, the number of plants operating in the U.S. has fallen by 153 (17.5%).
U.S. plants maintained their utilization rate of 66.3% in 1993, virtually unchanged from 1992. In 1986, plant utilization rate stood at 55%.
Capacity for 1993 continued the trend of expansion evident since 1989. The year 1988 was the last time when U.S. capacity declined.
Throughput regained the advancing pattern it has established since 1984. Total U.S. throughput since that year has gained 7.3 bcfd.
For last year, overall U.S. NGL production increased very slightly (0.53%) over that for 1992. Production has increased by nearly 23% since 1984.
STATE HAPPENINGS
Companies in Texas last year operated 7 fewer plants than in 1992 but expanded capacities and throughputs at those which did operate. That continues a trend evident since 1983 when 415 plants operated in Texas.
Capacities increased by more than 200 MMcfd; throughput, by more than 600 MMcfd. And the state produced more than 300,000 gpd more of NGLS.
Specific plant additions and expansions are discussed presently in a wrap up of worldwide plant changes.
Texas again far outstripped any other state for NGL production (nearly 30.4 million gpd), compared to the closest production in Louisiana of almost 12 million gpd.
Texas' share of gas processing capacity stood at nearly 24%, down slightly from 1992. The state's portion of throughput was 25%; of production, 41 %. Both maintain levels near to those for 1992.
Louisiana historically has more capacity than Texas' plants which was true again in 1993, but the plants processed less gas (by nearly 300 MMcfd) than in 1992 and less than did Texas' plants. In 1993, they Produced virtually the same amount of NGL as in 1992.
Because so much of Louisiana's capacity is devoted to handling gas coming ashore from fields in the Gulf of Mexico, the state's plants tend to be larger. This explains how the state could have only a quarter the number of plants as Texas, yet lead the U.S. in capacity and, until 1993, in throughput.
Average plant size in Louisiana in 1993 was nearly 255 MMcfd; in Texas, nearly 60 MMcfd. Only Kansas, which operated 22 plants in 1993 with capacities totaling more than 5 bcfd, was close to Louisiana in average plant size: 234 MMcfd.
Alaska is rather anomalous in that three plants there average nearly 2.6 bcfd. The big plant there, however, is ARCO Alaska Inc's Prudhoe Bay cycling plant at 5.6 bcfd, easily the largest in the world.
Louisiana's plant utilization rate for 1993 was nearly 65%, compared with Texas' nearly 70%. These rates straddle the U.S. industry's average of 66%.
For all states, Louisiana's share of capacity in 1993 was 25.5%, of throughput 25%, and of production 16%.
Combined, Texas and Louisiana in 1993 had gas processing capacity of almost 36 bcfd, slightly less than 50% of the entire country's total and off from 1992. For throughput, the states combined total of 23.9 bcfd holds a 50% share of nationwide throughput.
But between them, the two states produced 42,254,000 gpd in 1993, 57% of the nation's plant production,
Among other states whose plants experienced increases in capacity during 1993 were Alabama, Alaska, Colorado, Kansas, and Wyoming.
Alabama's gas plant capacities grew by 245 MMcfd with no net increase in the number of plants. The main factor, however, was the start up of operations at Exxon Co. U.S.A.'s Mobile Bay plant in October (OGJ, May 23, p. 49).
With inlet capacity of 300 MMcfd, the plant began handling that level almost immediately, says Exxon. With very little NGL production, however, the plant can produce up to 150 long tons/day of sulfur.
Alaska added 1.4 bcfd of capacity and handled 180 MMcfd more gas than in 1992. NGL production was reported to have declined, however.
Plants operating in Colorado added more than 300 MMcfd in capacity and processed more than 285 MMcfd in 1993.
Kansas added 250 MMcfd of capacity with Mesa Operating Ltd.'s Satanta plant (OGJ, Oct. 11, 1993, p. 35), more about which presently; Wyoming added almost 92 MMcfd.
Oklahoma operators reported seven fewer plants operating, taking 182.3 MMcfd of capacity out of service. North Dakota operators ran one less plant, reducing that state's capacity by 65 MMcfd.
Ethane rejection in the industry in 1993 shows up conclusively in year end figures for production. U.S. plants produced nearly 6.6 million gpd of ethane last year compared with almost 7.8 million gpd in 1992, a drop of 15%.
Commensurately, production of raw NGLs the largest single product category jumped by 3.6 million gpd (8.7%) along with an increase in "Other" production (mostly condensate and ethane propane mix) of 353,000 gpd (8.5%) to yield a fractional increase in U.S. NGL production of 387,700 gpd (0.53%).
NEW CAPACITY
Increasing gas production around the world is fueling gas plant construction. Also, demand for gas liquids, especially for petrochemicals and power generation, has been strong recently.
Many projects to process gas and supply liquids are under way or planned.
WORLDWIDE
In the Middle East, Abu Dhabi Co. for Onshore Oil Operations has built two oil and gas processing plants in northeast Abu Dhabi. The plants will serve as pilots to determine the need for more processing.
Elsewhere, the Abu Dhabi National Oil Co. is upgrading and expanding gas treating at Habshan, United Arab Emirates, in a project set for late 1995 completion. The $2 million project will triple capacity to 1.86 bcfd from 540 bcfd (OGJ, Apr. 5, 1993, p. 25; Sept. 6, p. 30).
Among other work, a new gas processing plant is being built adjacent and to be integrated into two existing trains.
Also, Amoco Sharjah Oil Co. is expanding the Sajaa field gas plant to 700 MMcfd from 440 MMcfd. And, Qatargas plans a gas processing complex in Qatar that will produce 1,000 metric tons/day (OGJ, Jan. 24, p. 25; Aug. 23, 1993, p. 21).
In Asia Pacific, Pakistan's OGDC is building a $75 million gas processing plant in the Dhodak gas and condensate field, Dera Ghazi Khan district in the Punjab, to produce 180 190 metric tons/day of LPG. Construction is to be completed in August.
By third quarter 1996, Gas Authority of India will build, at Usar in Maharashtra, a 140,000 metric ton/ year LPG plant. Another proposed LPG plant at Lakwa will produce 85,000 tons/year upon completion in April 1996. And a $126 million plant is planned along a proposed expansion of the company's 500 MMcfd gas line (OGJ, Apr. 4, p. 38; Nov. 8, 1993, p. 42; June 21, 1993, p. 37).
In Africa, Nigerian National Petroleum Corp. has begun site preparations for a gas processing plant for the Escravos oil field off southeast Nigeria. And Sonatrach has begun construction of a 2 million metric ton/ year, $450 million gas plant near Arzew, Algeria (OGJ, Mar. 14, p. 39; Feb. 28, p. 24).
In Europe, Hamilton Oil Co. Ltd., London, is building a 240 MMcfd gas processing terminal at Point of Ayr, North Wales, to treat sour gas from Hamilton and Douglas fields in the Irish Sea (OGJ, May 31, 1993, p. 27).
Chevron U.K. Ltd. and Conoco U.K. Ltd. are building a $330 million, 750 MMcfd gas plant for production from the North Sea's Britannia field. Scheduled completion is late 1998 (OGJ, Mar. 14, p. 39; Oct. 4, 1993, p. 74).
And Enron Corp. has begun engineering for the second process train at its Teesside gas plant to handle gas from the U.K.'s North Sea Judy and Joanne fields going ashore via the Central Area Transmission System in 1996 (OGJ, Mar. 7, p. 40; June 7, 1993, p. 37).
Elsewhere, Pennzoil Caspian Corp. has installed a 150 MMcfd gas plant at its Guneshli field offshore Azerbaijan in the Caspian Sea (OGJ, Mar. 8, 1993, p. 28).
NORTH AMERICA
Expansion plans are progressing at major gas processing points in Canada.
In the western part of Alberta, near Cochrane and astride pipelines taking gas to the Alberta British Columbia border, Alberta Natural Gas Co. Ltd. is expanding its 1.3 bcfd plant to handle volumes needed for, among other markets, Pacific Gas Transmission's recently built expansion to the U.S. Pacific Northwest and California (OGJ, June 28, 1993, p. 28).
Alberta Natural Gas is reviving a 900 MMcfd former lean oil plant dormant since 1983 to complement three cryogenic plants. Targeted start up for the $55 million (Canadian) Cochrane plant is third quarter this year.
At Empress in the eastern part of Alberta, Amoco Canada operates two plants totaling 4 bcfd (1.7 bcfd, Amoco and PanCanadian Petroleum Ltd.; and 2.3 bcfd, TransCanada PipeLines Ltd. and Pan Alberta Gas and operated by Amoco).
In late 1993, applications were filed with the ERCB to add two plants at 800 MMcfd each by Amoco and PanCanadian. Upstream pipeline expansions on NOVA's system headed east suggest adequate supplies for both projects (Gas Processors Report, Nov. 8, 1993, p. 2; OGJ, Nov. 29, 1993, p. 36).
Also, in late 1993, Wolcott Gas Processing Ltd. started up its 225 MMcfd expansion at Empress, raising that plant's capacity to 600 MMcfd.
Paralleling stories of major expansions at the Alberta gas export points was Shell Canada's Caroline project.
Processing began in March 1993 at the plant which handles 300 MMcfd from the Caroline Devonian gas condensate field (OGJ, Mar. 15, p. 36; June 22, 1992, p. 23).
The project is important less for the capacity brought on stream than for the technology of handling particularly sour gas: early flows contained up to 35% H2S.
Production from the plant will run to 18,000 b/d of condensate, 26,400 b/d of NGLS, 4,000 metric tons of sulfur, and 100 MMcfd of residue gas.
In British Columbia, Westcoast Energy Inc., Vancouver, is expanding its Pine River plant near Chetwynd to 560 MMcfd from 260 MMcfd in a $251 million (Canadian) project. Start up is set for fourth quarter 1994 (OGJ, July 5, 1993, p. 25).
Elsewhere in North America, Exxon Co. U.S.A. began flowing gas into its 300 MMcfd plant at Mobile Bay, Ala., on Oct. 20, 1993. Although the gas is relatively dry, the plant can produce up to 150 long tons/day of sulfur from the sour gas, which varies in sulfur content (OGJ, May 23, p. 49).
In Kansas, Mesa Inc., Dallas, started up its 250 MMcfd Satanta plant in the Hugoton field. Average annual production from the $43 million project will be 16,000 b/d of NGL; a separate unit will extract 375 million cu ft/year of helium.
Also in the Hugoton field, Amoco Production Co., and Trident NGL Holding Inc., The Woodlands, Tex., will build a 500 MMcfd cryogenic plant with helium recovery units to replace Amoco's 420 MMcfd Ulysses and Trident's 500 MMcfd Jayhawk plants (OGJ, Oct. 11, 1993, p. 35; Feb. 28, p. 24).
Helium is also a by product of Maxus Energy Corp's new 190 MMcfd Sunray, Tex., plant. The $65.5 million plant has a state of the art cold box for producing helium (OGJ, June 28, 1993, p. 68).
The plant replaced processing formerly provided by Diamond Shamrock Inc. at the adjacent McKee refinery.
Also, in Texas, GPM Gas Corp., Houston, has expanded its Quarry plant capacity in Washington County to 65 MMcfd.
In Wyoming, near Riner, Williams Field Services Group, Tulsa, has built a $30 million, 120 MMcfd gas plant for the Wamsutter field. And in the Madden field of Fremont County, Wyo., Louisiana Land & Exploration Co., New Orleans, has begun construction on a 50 MMcfd plant to be complete in early 1995 (OGJ, Aug. 2, 1993, p. 40; Oct. 18, 1993, p. 37).
Williams Field Services has also started up its latest addition to the Manzanares system in New Mexico, the 110 MMcfd Esperanza treating plant that expands the facility's capacity to 850 MMcfd.
Williams plans another plant at Manzanares near the Cedar Hill delivery point just south of the border with Colorado. Start up target is early 1995; capacity could be between 200 MMcfd and 225 MMcfd.
Also in New Mexico, GPM Gas Corp., Houston, has started up its fully automated, remotely controlled 27 MMcfd Zia gas plant in Lea County. Zia brings GPM's processing capacity in New Mexico to 239 MMcfd (OGJ, Jan. 24, p. 41).
SULFUR RECOVERY
Canada reported more than 28,000 metric tons/day of sulfur recovery capacity, 26% of the world's total. The U.S. held almost 31,500 metric tons/ day, almost 29% of the world's total.
Total worldwide sulfur recovery capacity in 1993 rose to almost 110,000 metric tons/day from almost 104,000 metric tons/day for 1992.
Worldwide capacity outside the U.S. and Canada also rose, to almost 50,000 metric tons/day from almost 45,000 metric tons/day for 1992.
Worldwide production of petroleum derived sulfur increased last year to more than 55,500 metric tons/ day from 54,000 metric tons/day for 1992.
Canada accounted for more than 17,300 metric tons/day, or 31.2%, of the overall total; the U.S., almost 13,000 metric tons/day, or more than 23%.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.