Transitions, Natural Gas And Natural Gas Liquids
There has been an increase in conversation in the media of late about energy transition, and for Western Canada, the need to diversify economically away from reliance on simple extraction of petroleum resources. Natural gas is clearly a lower carbon option than coal for power generation, and also provides reliable and dispatchable support for the grid that renewables alone cannot provide.
In addition to electricity, it is likely that natural gas will play a significant part in the production of blue hydrogen to displace liquid transportation fuels or decarbonize natural gas distributed to consumers. The scale of the proposed conversions is often not talked about, but if one were to displace all the diesel fuel used in Alberta with blue hydrogen (on an equivalent energy basis), the additional natural gas demand would be about two-thirds of Alberta’s current consumption. This will take time to develop and such a significant change to the industrial and commercial landscape will take many years to come to fruition. The Transition Accelerator reports that have recently been published point to very significant infrastructure investments that will be needed to support this, as well as some technology development to improve hydrogen storage on vehicles.
As many people in the industry understand, natural gas liquids are recovered from most gas sources and must be removed to a minimum extent to meet pipeline dewpoint specifications. In recent years, the pricing for these liquids, such as ethane and propane, have not been sufficiently high in Western Canada to justify extraction beyond dewpoint because there simply hasn’t been enough demand. Growth in U.S. propane production also reduced the economics of shipping propane south. The Edmonton par price has often bounced around zero.
However, this is starting to change. The growth in offshore export routes via terminals in British Columbia and the U.S. Pacific Northwest provide an alternate outlet that may offer higher prices, but the imminent start of the first polypropylene plant near Edmonton, and other proposed propane consuming petrochemical facilities will increase local demand for propane. Forecasts are clearly difficult as different parties see different timelines for the western Canadian propane market tightening in the medium term, but it is clear that propane recovery profitability should improve moving forward.
Ethane extraction economics continue to struggle as there is significant excess extraction capacity and the import of ethane via the Vantage Pipeline helps hold down ethane prices. However, there are proposed ethylene plant complexes being discussed, and the Alberta government is keen on seeing these and other propane derivative projects move forward. While these projects have longer timelines and aren’t likely to start production until the late 2020s, it is foreseeable that ethane extraction will become more viable in the future.
Removing NGLs from natural gas does have a small benefit from an emissions perspective. Ethane and propane have emission intensities that are respectively 11.6 and 17.6 per cent higher than methane (kg CO2/kJ LHV basis) when burned as fuel. This means that extracting them from natural gas is a simple way to partially decarbonize natural gas, albeit at a fairly small net percentage as they make up a small fraction of the total gas stream.
The other aspect of this is that removing NGLs from natural gas needs to be done prior to blending hydrogen into natural gas. Hydrogen has a negative Joule-Thompson coefficient at temperatures above 202 K (-71°C) and the inversion temperature falls as the pressure rises. This means that any hydrogen present in an expansion-type NGL recovery process will work against the goals of the process (it heats up when it expands). Inclusion of 10-15 per cent hydrogen in natural gas significantly reduces the ability of a cryogenic plant to recover ethane and propane.
Therefore, if hydrogen blending into natural gas is going to be a significant part of decarbonizing the energy system, then NGL removal from the natural gas needs to happen first, and those NGLs should be converted to products that do not emit the carbon to the atmosphere (e.g. polymers and other specialty chemicals).
All of these issues should increase demand for natural gas as a lower carbon energy source than oil and coal, and recovery of the natural gas liquids to make value-added products should be a key part in this transition. Nevertheless, we recognize that the timelines for increased propane and ethane demands are not going to be the same. This means that capital investments in NGL recovery projects would ideally focus on flexibility.
Fluor’s Cryo-GasSM family of NGL recovery technologies offers just that. Our patented Deep Dew Point Process (DDP) offers a simpler alternative for full propane recovery with ethane rejection than prior technologies. This process allows for essentially complete propane recovery with full ethane rejection without requiring a turbo-expander, with the simplicity of operation of a mechanical refrigeration unit.
Figure 1 : Fluor Cryo-Gas DDP Process Schematic. Fluor's DDP technology won Best Gas Processing/LNG Technology at the Hydrocarbon Processing 2019 Awards gala event.
A simple conversion of the DDP process to the Cryo-Gas Twin Reflux Absorption Process (TRAP) with the addition of a turbo-expander allows for >90 per cent ethane recoveries and the flexibility of switching from ethane recovery to rejection as markets change. The DDP and TRAP configurations offer a 10-15 per cent reduction in net power requirements over competing processes, and our most recently completed unit in Colorado is operating successfully. Our standard design is configured for addition of the TRAP components without significant modifications.
Predicting the future is difficult, but that we believe the indicators are pointing towards NGL recovery being more economically and environmentally attractive; our solutions will provide better energy efficiency and flexibility than legacy technologies, at a very competitive price point.
If this topic is of interest to you or generates questions, the author would be pleased to have a more in-depth discussion.
Since 1949 Fluor Canada has been involved in the engineering, procurement and construction of a wide range of energy related projects that are spread across the Canadian landscape. Today, we provide a complete range of fully integrated solutions for all types of facilities including liquefied natural gas (LNG), refineries, oil sands and heavy oil upgraders, steam assisted gravity drainage (SAGD) recovery, petrochemicals, chemicals, gas processing, power, mining, as well as pipelines, utilities and offsites, infrastructure and revamps of existing facilities. Our experience as a full-service contractor with extensive process design capabilities is unmatched in Canada.
Throughout our 70-year history in Canada, Fluor has provided local, regional and international clients with our full-service capabilities, which include economic evaluations, conceptual engineering, feasibility studies, program management, detailed engineering, procurement, transportation and logistics, modularization, fabrication, direct-hire construction, construction management, commissioning, start-up, operations and maintenance.
Our employees across Canada have the experience, leading-edge tools, systems and procedures to deliver customized solutions that meet our clients’ needs. We are committed to delivering high-quality, safe and cost-effective project solutions.
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