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Where do Hydrocarbon Gas Liquids Come From?

Hydrocarbon gas liquids are derived from natural gas and crude oil

Hydrocarbon gas liquids (HGL) are produced when raw natural gas is processed at natural gas processing plants and when crude oil is refined into petroleum products. Most of the HGL produced in the United States are separated from natural gas at natural gas processing plants.

Hydrocarbon gas liquids from natural gas processing

HGL are present as gases in geologic formations containing natural gas. Raw, or untreated, natural gas produced from natural gas wells and oil wells is called wet gas because it sometimes contains HGL, along with water vapor and other nonhydrocarbon gases. HGL should not be confused with lease condensate separated out of associated and nonassociated natural gas at lease facilities. The liquid condensate is usually added to crude oil in pipelines that transport oil to refineries.

Natural gas is usually treated at natural gas processing plants before it enters natural gas transmission pipelines. HGL extracted from natural gas as liquids at these plants are called natural gas plant liquids (NGPL). Natural gas that has been processed to remove most of the HGL and nonhydrocarbon compounds is called dry gas, which consists of mostly methane. Natural gas pipeline operators have strict specifications for the characteristics (such as the heat content) of the dry natural gas that they accept, which in turn limits the amount of HGL contained in natural gas that is transported through these pipelines.

Mixed HGL streams (also known as Y-grade) are separated from each other by the process of fractionation. Fractionation facilities may be co-located at natural gas processing plants, or they may receive mixed HGL streams from several processing plants. Fractionation facilities separate some or all the individual HGL that are then sold as purity products—ethane, propane, normal butane, and isobutane product streams consisting of a minimum of 90% of one type of HGL molecule.

Most of the natural gas processing and fractionation plants in the United States are located in areas where natural gas and crude oil production is concentrated. In 2017, HGL production from natural gas processing accounted for about 86% of total U.S. HGL production.

Hydrocarbon gas liquids from crude oil refining

Production of HGL at petroleum refineries can occur during the distillation process, when HGL contained in crude oil are separated out along with other crude oil fractions, or at refinery cracking units, which break longer-chained (heavier) hydrocarbons into lighter molecules, yielding HGL alongside distillate and/or gasoline-blending components. All refinery olefins are produced at refinery cracking units.

Propane and propylene are the HGL streams that are produced and sold as separate purity products in the largest volumes by petroleum refiners. Most of the other volumes of HGL produced at refineries are burned as fuels or are used to make gasoline and petrochemical feedstock.

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Last updated: December 19, 2018

Propane is produced from crude oil refining and natural gas processing

Propane production is generally consistent throughout the year because it results from natural gas processing and crude oil refining. Most of U.S. propane production is from natural gas processing.

In natural gas processing plants, propane enters the plant as a component of the wet natural gas stream from natural gas and/or crude oil wells. When the raw, wet natural gas is cooled and pressurized in the plant, the heavier hydrocarbons, including ethane, propane, normal butane, isobutane, and natural gasoline, turn into liquids and separate from the natural gas stream. The mixed liquids, also referred to as Y-grade, are then refined and separated in a fractionator into purity products (products having a minimum of 90% of one type of hydrocarbon gas liquid).

Oil refineries can produce propane in two stages of the crude oil refining process. The first refining process that yields propane is the atmospheric distillation column, where crude oil undergoes initial distillation. In modern, complex refineries, propane (and propylene) is also produced in the fluid catalytic cracker (FCC) when long-chain hydrocarbon molecules are cracked under high temperatures and pressures to break these molecules into lighter hydrocarbons that are more suitable for motor gasoline production. In addition to those gasoline blending products, the refinery crackers produce lighter molecules including propane, normal butane, isobutane, and their olefins.

Propane is imported from other countries to supplement U.S. supply sources

The United States generally imports propane to supplement U.S. propane production, especially during the autumn and winter months, mainly to meet demand from farmers and for space heating in buildings. Most propane imports come by rail from Canada into the Midwest, East Coast, and Rocky Mountain regions of the United States. Some propane imports arrive by ship, usually at times of high demand and in regions where infrastructure constraints limit deliverability of domestic supplies, such as New England or Hawaii.

Last updated: December 19, 2018