Natural Gas Liquids (NGLs) are an essential component of the energy industry, providing valuable resources and playing a significant role in various applications. In this article, we will guide through the definition of NGLs, and will explain their types. We will also explore the benefits and drawbacks of using NGLs, the extraction process, and conclude with key takeaways.

What do Natural Gas Liquids Mean?

Natural Gas Liquids refer to a group of hydrocarbons that are often found in association with natural gas reserves. These hydrocarbons exist in a liquid state at atmospheric conditions and can be separated from natural gas through various extraction processes. NGLs consist of a mixture of different compounds, primarily ethane, propane, butane, and pentane. Each compound within NGLs has unique properties and applications.

Explaining NGLs

NGLs are hydrocarbons that are formed during the natural gas production and processing. When natural gas is extracted from underground reservoirs, it typically contains impurities and hydrocarbon compounds in addition to methane, which is the primary component of natural gas. NGLs are separated from the raw natural gas through a process known as natural gas processing or conditioning. This process involves the use of various techniques such as cooling and pressurisation to extract and separate the NGLs from the raw gas stream.

What are the Benefits of Using NGLs?

Here are the Benefits of Using NGLs:

Versatile Energy Source: NGLs offer versatility in energy applications. They can be used as a fuel source for heating homes and businesses, providing reliable and efficient energy.

Blending into Motor Fuels: NGLs, such as butane and natural gasoline, can be blended with other fuels to improve their properties. Blending NGLs into motor fuels enhances their octane rating, which improves engine performance and reduces emissions.

Feedstock for Manufacturing: NGLs serve as a valuable feedstock for various manufacturing processes. They are used in the production of plastics, synthetic fibers, rubber, and other raw materials, contributing to the manufacturing sector's growth.

Petrochemical Industry: NGLs are crucial in the petrochemical industry, where they are used as feedstock for the production of ethylene and propylene. 

Increasing Energy Security: Utilising NGLs helps diversify the energy mix and reduce dependence on other energy sources. By expanding the use of NGLs, countries can enhance their energy security and reduce vulnerability to supply disruptions.

What are the Drawbacks of Using NGLs?

Here are the Drawbacks of Using NGLs:

Environmental Impact: Although NGLs have lower carbon emissions compared to coal and other hydrocarbon resources, their combustion still contributes to greenhouse gas emissions. The extraction and production processes of NGLs can also have environmental consequences if not properly managed, including habitat disruption and water contamination.

Price Volatility: Similar to other fossil fuels, NGL prices can be subject to market volatility. Changes in global supply and demand, geopolitical factors, and other market dynamics can lead to fluctuations in NGL prices, impacting both producers and consumers.

Infrastructure Requirements: The effective utilisation of NGLs requires a well-developed infrastructure, including pipelines, storage facilities, and processing plants. Building and maintaining this infrastructure can be capital-intensive and time-consuming, posing challenges for regions with limited existing infrastructure.

Transportation and Storage Safety: NGLs are typically transported through pipelines, which are generally considered a safe method. However, pipeline leaks or accidents can still occur, emphasising the need for rigorous safety measures and regular inspections. Also, proper storage and handling of NGLs are essential to prevent accidents and ensure the safety of workers and nearby communities.

How to Extract NGLs?

Here are the steps to extract NGLs:

Natural Gas Processing: NGLs are often extracted as byproducts during the processing of natural gas. Natural gas wells produce both methane (natural gas) and NGLs. The extraction process involves connecting pipelines to natural gas wells, drawing the gas from the well, and then cooling and pressurising it to separate the NGLs from the natural gas.

Fractionation: Once extracted, the NGLs are transported to an NGL processing plant, also known as a fractionator. At the fractionator, the NGLs undergo a separation process. The separation is achieved by subjecting the NGL mixture to heating and cooling at different temperatures, as different NGL components have different boiling points and condensation temperatures.

Storage and Transportation: After the fractionation process, the separated NGLs are stored in facilities such as storage tanks and can be transported through pipelines or other means to end-users or further processing facilities. Pipelines are considered the safest method for NGL transportation, but safety measures and monitoring are crucial to prevent leaks or accidents.

It's important to note that the specific extraction methods and technologies may vary depending on the geological characteristics of the region and the operational practices of the companies involved in NGL production.

What are the Types of NGLs? 

In South Africa, the types of Natural Gas Liquids that are commonly encountered include ethane, propane, butanes, and pentanes. NGLs are classified based on their vapour pressure. Let's explore each type in detail:

Ethane: Ethane is a low-vapour-pressure NGL that is widely used as a feedstock in the petrochemical industry. It serves as a raw material for the production of plastics, vinyl, synthetic fibers, and other chemical products.

Propane: Propane is an intermediate-vapour-pressure NGL and finds diverse applications. It is commonly used for residential and commercial heating, cooking fuel, and as a petrochemical feedstock. Also, some vehicles also use propane as a fuel source.

Butanes: Butanes are high-vapour-pressure NGLs that can be further divided into two categories: normal butane and isobutane. Normal butane is often blended with gasoline to enhance its performance, and it also has uses in the production of synthetic rubber and lighter fuel. Isobutane is utilised as a refinery and petrochemical feedstock, with applications in aerosols and refrigerants.

Pentanes: Pentanes are another type of NGL and are primarily used in natural gasoline, as well as a blowing agent for polystyrene foam. Pentanes plus, a specific category of pentanes, is blended with vehicle fuel and exported for bitumen production in oil sands.

These NGLs have varying vapour pressures, chemical compositions, and applications. Their presence in South Africa's natural gas resources presents opportunities for industries and contributes to the country's energy landscape.

What are the Example of NGL-producing Companies?

In South Africa, there is one and only company involved in the production of NGLs. This company plays a crucial role in extracting, processing, and supplying NGLs to meet various industry needs. Here is the example of NGL-producing company in South Africa:

Renergen: Renergen is an emerging natural gas and helium producer in South Africa. They hold the first and only onshore petroleum production rights in the country. Renergen's Virginia gas project, located in the Free State province, aims to distribute Liquefied Natural Gas (LNG) and become the first commercial supplier of LNG in South Africa.

This example showcases the involvement in the production and distribution of NGLs in South Africa. It contributes to the country's energy sector, supporting various industries that rely on NGLs for their operations.

Bottom Line and Key Takeaways

Natural Gas Liquids are essential hydrocarbon components found in association with natural gas reserves. They offer various benefits, including serving as valuable feedstocks for the petrochemical industry and as versatile fuels for heating, cooking, and transportation. However, the volatility of NGL prices and the infrastructure requirements for extraction and processing present challenges. NGL extraction involves specialised plants and techniques, including fractionation to separate the different components based on their boiling points. Ethane, propane, butane, and pentane are among the examples of NGLs, each with specific applications across industries.

FAQ

1. Are Natural Gas Liquids the same as Liquefied Natural Gas (LNG)?

No, they are not the same. NGLs refer to the hydrocarbon components that are in a liquid state at atmospheric conditions and are extracted from natural gas. On the other hand, LNG is natural gas that has been cooled to a very low temperature and condensed into a liquid for transportation and storage purposes.

2. Can NGLs be used as a substitute for crude oil?

NGLs can serve as a substitute for crude oil in certain applications. They are often used as feedstocks for the production of various petrochemical products. However, NGLs have different properties compared to crude oil, and their use as a substitute depends on the specific requirements of the application.

3. How are NGL prices determined?

The prices of NGLs are influenced by several factors, including supply and demand dynamics, market conditions, and the overall energy landscape. Market participants, such as producers, traders, and consumers, play a role in determining NGL prices through negotiations and market transactions.

4. What are some other uses of NGLs?

Apart from their applications in the petrochemical industry and as fuels, NGLs are also utilised in the production of various household and industrial products. They can be found in cosmetics, aerosols, refrigerants, and even as an energy source for certain power generation facilities.

5. What is the outlook for the NGL industry in South Africa?

The NGL industry in South Africa is influenced by factors such as the availability of natural gas reserves, infrastructure development, and market demand. As the country continues to explore and develop its natural gas resources, the NGL industry is expected to grow, potentially attracting investments and contributing to the energy landscape of the nation.