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Article 1:  Nitrogen Rejection with Integrated High NGL Extraction

Author:   Greg Hall, Vice President of Sales/Planning, BCCK Engineering
Publication:   Hydrocarbon Engineering
Date:   July 2010

Estimates place as much as 25% of the natural gas in the United States out of specification with regard to nitrogen content. Typically, a processor can expect the pipelines to require less than 3.0 mole percent nitrogen in their natural gas stream. With a decline in conventional natural gas sources and with a recent increase in political desire to better utilize clean burning natural gas, there is a need for these unconventional sources of natural gas. For the United States to also become energy independent, natural gas will have to take a larger role in our daily lives in the future. There is no doubt that shale gas is propping up the decline curve with respect to conventional gas, but low-BTU gas is another economically viable option. With the recent increase in oil prices, there is now a greater opportunity for nitrogen rejection with integrated NGL extraction, and specifically high NGL recovery. The increase in spread value for the liquid constituents of high nitrogen natural gas streams increases the net revenue for the producers thus making the high nitrogen projects more attractive for producer investment. In the future it may also become a requirement for these type facilities should they produce a motor fuel grade product. Even today, there are requirements for motor fuel grade LNG to contain no less than 95% methane, thus making high NGL extraction mandatory for motor fuel grade LNG.

Nitrogen rejection has been an economically viable option for years, but historically only at flow rates in excess of 100 MMSCFD. With improved technology and increased natural gas prices over the past twenty years that rate has been reduced to as low as 5 MMSCFD. As NRU technology advanced the obvious next step was to integrate NGL extraction with the cryogenic NRU processes. Most natural gas needs some type of NGL extraction in order to meet pipeline specifications with regard to hydrocarbon dew point or some other similar tariff. With this need and with the inherent low temperature design of cryogenic nitrogen rejection, the addition of integrated NGL extraction was a logical step. In BCCK’s history with nitrogen rejection, almost every Nitech™ NRU installed for processing natural gas includes some type of NGL extraction. Now with higher liquid product values, it is important to not only meet pipeline specifications with regard to hydrocarbon dew point, but also to integrate NGL extraction that has high NGL recoveries.

As stated above, NGL extraction with nitrogen rejection is needed in order to meet pipeline specifications such as hydrocarbon dew point, maximum heating value, and the Wobbe index. While meeting the regulated specification is a requirement, it is also important to maximize facility net revenue.  In today’s market, natural gas is undervalued when compared to crude oil. Historically, the ratio of a barrel of crude oil to 1 MMBTU of natural gas has been 6-12. (See Figure 1)  Today that ratio is near 20, meaning that the spread value of the liquid constituent of natural gas is increasing. This liquid constituent and the increasing spread value makes the high nitrogen projects more attractive to producers and more important for nitrogen rejection facilities to maximize NGL extraction.


Figure 1. Crude Oil / Natural Gas Ratio

In order to extract a high percentage of the hydrocarbon liquids from a high nitrogen stream, there are basically two options. The first would be a step-by-step approach that would utilize a separate system to remove the liquids; then follow with a nitrogen rejection unit. As an alternative, a system can be built that integrates both systems into one complete system. This integrated approach has some obvious advantages: less equipment, lower capital costs, and less operational requirements than the first option. With these advantages, it is also important to look at the recoveries and energy requirements of each option along with the capital costs. The integrated option will typically have similar recoveries and horsepower requirements when compared to the step-by-step approach. For the purpose of this article, we will look at the integrated Nitech™ NRU/NGL extraction facility with a typical high nitrogen gas stream. Tables 1 and 2 show the inlet gas stream and the product streams from the Nitech™ facility as well as NGL recoveries.

Table 1. Stream Compositions for Integrated NGL Extraction Facility

Table 2.  NGL Recovery Efficiency

As can be seen in these tables, the integrated option yields NGL recoveries similar to that of a typical turbo expander facility, while also rejecting the nitrogen in the same process. This is accomplished with a simple design that requires less than half the equipment of a step-by-step process design, utilizing a stand-alone turbo expander plant and subsequent NRU.  The Nitech™ facility utilizes no expander and no cryogenic pumps, greatly simplifying the facility design and operation, thus reducing the associated capital and operating costs. The integrated NGL extraction facility also maintains the proven flexibility of the Nitech™ process with respect to both flow rate an inlet gas composition. Flexibility is required because the inlet gas composition and flow rate will change over the life of the project. The flexibility is particularly important for nitrogen flood projects where both the nitrogen and heavy end hydrocarbon content will change significantly over the life of the project. This is an area where the Nitech™ NRU with integrated NGL extraction has some distinct advantages.

With the current commodity prices, the gas stream used in Table 1 yields liquid product revenue that exceeds the revenue of that for the natural gas sales stream by about 20%. Of course, should the spread continue to grow, as the trend shows in Figure 1, the project economics will have a more favorable lean to high NGL extraction. There is indeed an increased cost to extract a high percentage of the liquids when compared to just meeting pipeline hydrocarbon dew point specifications, however the incremental costs are not significant since there minimal additional equipment required. These incremental costs would be expected to achieve a payout in less than 12 months for a typical project.

In order for midstream processor to look at the option of high NGL extraction associated with nitrogen rejection, there are several requirements to take into consideration. First, an NGL pipeline must be available. With the high percentage of ethane extracted, this liquid product will typically not meet vapor pressure requirements of a liquid product trailer, which is the same issue associated with turbo expander facilities. There also needs to be an adequate amount of C2+ hydrocarbons in the inlet gas stream to economically justify the high NGL extraction option. This does not mean that the gas stream must contain a significant amount of recoverable liquids. In fact, many cases that meet pipeline hydrocarbon dew point specifications still economically justify the integrated high NGL extraction option.

With an increasing spread in the value of the liquids compared to natural gas prices, it has become more important to look at high NGL extraction associated with NRU projects. This spread has also made once bypassed reservoirs more economically viable and profitable. The incentive to extract a high percentage of the liquid constituent is there today and is expected to increase in the future. With the additional political influence to utilize natural gas as a motor fuel in the future, these type projects will become more important for our country and our desire to become energy independent.

Contact details:
Gregory L. Hall, P.E.
BCCK Engineering, Inc.
2500 North Big Spring
Midland, Texas 79705
432-685-6095
432-685-7021(fax)
Engineering@bcck.com

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