U.S., Canada continue dominance of world's gas processing

Warren R. True
Pipeline/Gas Processing Editor

Gas plants in the U.S. and Canada continued to lead the rest of the world in processing capacity, throughput, and NGL production in 1996 (Table 1 [91362 bytes]).

The consolidation of gas-processing assets that has been rolling through U.S. companies in recent years continued to limit growth in new capacity.

Canadian liquids producers, on the other hand, will likely benefit from increased gas production and export sales to the U.S. when a clutch of pipeline expansions in the next 18-30 months eases the capacity constraints on gas movements southward.

And, markets and suppliers around the world continue to become more closely dependent on each other, stimulating new capacity and production.

U.S. capacity stood at slightly more than 68 bcfd as of Jan. 1, 1997; throughput for 1996 averaged 48.8 bcfd; and NGL production exceeded 76,000 gpd.

Canadian gas-processing capacity last year approached 40 bcfd. Gas-processing throughput there averaged more than 30.8 bcfd; NGL production fell to slightly more than 42,000 gpd.

Oil & Gas Journal's most recent exclusive, plant-by-plant, worldwide gas-processing survey (p. 88) and its international survey of petroleum-derived sulfur recovery (p. 135). reflect these trends.

This report supplements operator-supplied capacity and production data for Alberta with figures from the (1) Alberta Energy & Utilities Board (AEUB), formerly the Energy Resources Conservation Board (ERCB), (2) British Columbia Ministry of Employment & Investment's Engineering and Operations Branch, and (3) Saskatchewan Ministry of Energy & Mines.

OGJ began incorporating the AEUB data in the 1994 report for 1993. Specific comparisons with 1992 and earlier years must therefore proceed carefully because of lack of response by some operators. Provincial data, nonetheless, confirm general trends indicated in data reported for those years.

Outside Canada and the U.S., gas-processing capacity at the beginning of 1997 was more than 82.6 bcfd, up from 79 bcfd at the start of 1996. During 1996, throughput averaged more than 51.2 bcfd, compared to 1995 throughput of nearly 46.7 bcfd.

Non-Canadian/non-U.S. NGL production in 1996 was nearly 86.5 million gpd (about 2.16 million b/d); for 1995, production was almost 88.4 million gpd.

Western Europe retained the most processing capacity (23.6 bcfd) among regions outside Canada and the U.S. Countries of the Middle East (17.1 bcfd) and those that make up Asia-Pacific (15.8 bcfd) both increased capacity last year.

Latin America continued to expand its processing capacity in 1996, to more than 12.6 bcfd. The region again reported more NGL production (29.5 million gpd; more than 738,000 b/d) than other regions outside the U.S. and Canada.

Canada and the U.S. continued to lead the world in petroleum-derived sulfur recovery in 1996, holding more than 57% of processing capacity and 57% of actual production.

For worldwide production of sulfur-derived last year from refining and natural gas, Canada accounted for nearly 33% of the overall total; the U.S., nearly 25%.

U.S. picture

Shifting and consolidation of gas gathering and processing asset ownership so evident in the U.S. in 1995 continued into early 1996 but has paused somewhat for the present.

U.S. operators are keeping a wary eye northward, anticipating the next wave of gas-pipeline expansions to move gas and gas liquids southward.

A look at the industry on Jan. 1 shows the U.S.' leading share of the world's gas-processing capacity again shrunk, to less than 36% from 37% for 1995. Its share of gas processed was about level with that for 1995: 37.7% vs. 38%, still down from nearly 41% in 1994.

U.S. NGL production for 1996, still the largest portion of the world's production, was about level at 37% with the 36% for 1995 and 38.5% for 1994.

Canada's shares of capacity (21%), throughput (23.4%), and production (20.6%) kept it firmly in second place among the world's regions and ensured that most of the world's capacity (57%), throughput (61%), and NGL production (57.6%) lie in North America, despite gains elsewhere.

For 1996, OGJ data indicate 1,568 operating gas plants worldwide; 630 plants in the U.S., 682 in Canada. Recent OGJ data for new-plant construction show a drop in activity compared with a year ago (Table 2 [22286 bytes]).

Worldwide natural-gas reserves were about level in 1996 with those for 1995 (Table 3 [52676 bytes]), while gas production (Table 4 [67952 bytes]) increased.

Finally, Table 5 [48516 bytes] presents the top 10 NGL-producing nations in the world.

States' acitivities

The healthier U.S. picture is reflected in gas-plant utilization; in 1996 it rose to 72% from 70% in 1995. The figure stood at 67.4% in 1994. In 1986, the rate was 55%.

Louisiana retained its lead in processing capacity last year, thanks to the cluster of large gas plants along the Gulf Coast taking gas from nearby onshore and offshore fields.

These plants and their related pipelines stand to see significant expansion over the next few years as major gas production moves ashore from new medium and deepwater development.

Companies in Texas operated by far the largest number of plants, as in years past, 37.5% of all plants operated in the U.S. Those plants produced 40.6% of the country's NGLs in 1996.

Louisiana and Texas hold nearly 33 bcfd (48.5%) of U.S. capacity and 25.2 bcfd (50.7%) of throughput for the year. In both states, 308 plants were reported to be operating at Jan. 1, nearly half of the 630 reported operating in the entire U.S.

NGL production for 1996 in Texas, however, was greater than that of any other state, yielding more than 42 million gpd (more than 1 million b/d).

Totals for the three nearest NGL-producing states-Louisiana (11.3 million gpd), Oklahoma (7.8 million gpd), and New Mexico (7.1 million gpd)-made up 26.2 million gpd (more than 655,000 b/d), or more than 34% of total U.S. production.

Canadian explosion expected

Canadian gas, constrained in recent years by pipeline bottlenecks from gettng to U.S. markets, will likely break out in the next 18-36 months as major export expansion proposals become reality.

And much Canadian NGL is likely to find its way into the U.S., although major plans are on the boards for Canadian fractionators and petrochemical plants to absorb the increased liquids that will accompany gas production.

In 1996, Canadian plant utilization was 77%, somewhat off the rate for 1995; Alberta's in 1996 was also 77%.

OGJ's survey and government data from Canada's three major producing provinces indicated that 682 plants were operating in Canada in 1996; processing capacity approached 40 bcfd; gas processed was nearly 31 bcfd; and NGL production exceeded 42 million gpd (1 million b/d).

Alberta alone has 642 plants with more than 35.8 bcfd in capacity that processed almost 27.7 bcfd of gas.

The rest of the world last year continued closing the processing gap on the U.S.

In 1996, Canada's capacity as a portion of the world's outside the U.S. was 32.6%, off somewhat from the 33% of 1995 but nonetheless maintaining the flat portion it has had in recent years. Total world capacity outside the U.S., however, grew by more than 4.6 bcfd (3.9%).

In NGL production, Canada's share represented nearly 32.8% of the world's in 1996, the same as in 1995. In 1994, it made up more than 36%.

Sulfur recovery

Petroleum-derived sulfur production capacity worldwide flattened last year, holding at more than 118,400 metric tons/day (mtd) from more than 118,600 mtd in 1995.

Canada reported more than 33,000 mtd capacity in 1996 (28.2% of the world's total), down from more than 35,000 mtd capacity in 1995. The U.S. held more than 34,500 mtd (29.1% of the world's total).

Worldwide capacity in 1996 outside the U.S. and Canada fell to more than 50,000 mtd from more than 49,500 mtd in 1995.

Worldwide production of petroleum-derived sulfur increased last year to nearly 59,700 mtd from more than 58,700 mtd in 1995.

Canada accounted for almost 19,500 mtd; the U.S., for nearly 15,000 mtd.