June 13, 2008

How Natural Gas Liquids Go Their Separate Ways

Separating natural gas liquids from natural gas is a natural part of the industry.

It also is an area where ONEOK Partners is growing in a big way, with more than $1.1 billion in projects underway through the end of 2009.

Natural gas liquids go into a variety of different products for consumers. Stripping those liquids out of the gas has to happen first, though.

Natural gas liquids are ethane, propane, butane and natural gas. All of those are present in the natural gas -- methane -- that comes from completed wells.

Terry Spencer, ONEOK Partners' executive vice president for natural gas liquids, said those liquids really aren't liquids at all, to start with.

They come to natural gas processing plants as part of wells' vapor product.

Natural gas processing plants, he said, start the process of recovering the natural gas liquids by cryogenically cooling the vapor.

The dry gas that comes from that process -- the methane -- is natural gas used by homes, businesses, industries and some vehicles as fuel. The gas is sent on to market, where it feeds a network of pipelines that distribute the gas across the country.

What are left are natural gas liquids -- and they go by pipeline to another plant for additional processing.

How separation occurs The ethane, propane, butane and natural gas are still are mixed together in a liquid form when they arrive at a natural gas liquids processing plant, known in the industry as a fractionator.

ONEOK has three fractionators -- in Bushton, Kan., Conway, Kan., and in Medford.

"That is where the magic happens," Spencer said.

There, the liquid flows into a series of towers, each set to certain pressures and temperatures engineered to distill a particular product out of the liquid.

First to be extracted is the ethane, using what Spencer describes as a mechanical process. The tower the liquid goes into is 125 feet tall, weighs three-quarters of a million pounds and has steel three inches thick. Heat is applied to the bottom of the tower to boil the liquid, sending the product being extracted to the tower's top as a semivapor.

"All of these components each have different boiling points. So when you get the temperature right, you boil out certain products," Spencer said.

The ethane is drained into storage as it evaporates from the liquid. There, it cools. The remaining natural gas liquid, meanwhile, flows into the next fractionator tower. These subsequent towers extract the propane, butane and natural gas.

Each of these is stored until they can be shipped down the pipeline to a customer, Spencer said.

Who uses the liquids Spencer said the nation's petrochemical industry consumes more than 50 percent of natural gas liquids produced in the U.S., and much of that industry is on Texas' Gulf Coast at Mont Belvieu, near Houston.

About 20 percent of the liquids also are used by refiners, and the remainder is used for commercial, industrial and residential needs.

What has growth been? In 1995, ONEOK made $42.8 million in net income from its natural gas and natural gas liquids businesses.

In 2007, the partnership made more than $304 million in net income from those businesses.

The partnership acquired natural gas liquid assets from Koch Oil and Gas in 2005, giving it access to market hubs in Conway, Kan., and in Mont Belvieu.

It also is building a 760-mile natural gas liquids pipeline capable of carrying more than 100,000 barrels per day from Wyoming into Kansas, is building an extension onto that line into the Piceance Basin in Colorado, is expanding a fractionator in Bushton, Kan., is building a natural gas liquids pipeline to the Woodford Shale, and a pipeline from Oklahoma to Mont Belvieu.