After rising in 2017 for the 12th consecutive year to a record 3.74 million barrels per day, annual production of natural gas plant liquids in the U.S. is slated for continued expansion in the longer range, the U.S. Energy Information Administration said in its latest "Natural Gas Weekly Update" released March 1.
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The 2017 output level is 6.4% higher year on year and double the figure seen in 2007. Citing the projection in its latest "Short-Term Energy Outlook," the EIA sees another 15% increase in natural gas plant liquids production in 2018, which would go down as the second-highest annual increase following the 16% gain in 2014. Thereafter, output levels are expected to rise at a slower pace of 0.9% on average to reach 5.57 MMbbl/d in 2050, according to the agency's "Annual Energy Outlook 2018."
Ethane is expected to contribute 56% of the 1.84 MMbbl/d of total production growth between 2017 and 2050, with propane accounting for 25% of the increase, normal and isobutane production making up for 6% each and natural gasoline accounting for the remaining 7%.
The East region that includes the Appalachian Basin and the Utica and Marcellus shale formations is expected to contribute more than 70% of incremental production growth between 2017 and 2050, while the Southwest region that includes the Permian Basin is anticipated to bring in an additional 42% increase. The West Coast and the Midcontinent regions are expected to see reduced production that would offset gains elsewhere.
Natural gas plant liquids production generally relies on gross withdrawals of natural gas, the wet versus dry composition of this gas and the amount of ethane retained in the dry gas stream determined by pipeline specifications, according to the EIA.
Although the EIA sees the growth in gross gas withdrawals slowing and the composition becoming progressively drier as wetter areas associated with higher natural gas plant liquids yield are slowly depleted after 2022, natural gas plant liquids production is expected to increase as the market for ethane expands, rendering ethane recovery more economic and decreasing the volumes rejected or retained in the natural gas stream.
"The decision to market ethane separately instead of rejecting it back into the dry gas stream depends on the relative economics of each option and the capacity to consume the ethane," the EIA said. Agency estimates for the increase in natural gas plant liquids production between 2018 and 2022 are reportedly based on known projects coming online that will boost capacity to use ethane domestically or for exports.

