Sunday, May 29, 2016

Natural Gasoline (Mostly Pentanes C5, and Hexanes C6, and C6+: Gasoline Blendstock, Tar Sands Diluent, Heavy Petrochemical Feedstock, and Niche Solvent



Natural Gasoline (Mostly Pentanes C5, Hexanes C6, and C6+): Gasoline Blendstock, Tar Sands Diluent, Heavy Petrochemical Feedstock, and Niche Solvent

Unlike the other NGLs natural gasoline is a liquid at ambient temperatures, but an unstable one. Its vapor pressure is between that of natural gas condensate (drip gas) and LP gas. Natural gasoline is a mixture of C5s (pentanes) such as pentane, isopentane (both C5H12), C6s, and a smaller percentage of heavier C6+s. Often natural gasoline is referred to as ‘pentanes plus.’ Natural gasoline as a petrochemical feedstock is similar to light naptha, also a mostly C5/C6 blend, except that natural gasoline comes from natural gas processing and light naptha comes from oil refining. Natural gasoline and light naptha make up a small percentage of ethylene feedstock. Due to pricing the lighter hydrocarbons, particularly ethane, are preferred feedstock and use of natural gasoline for this purpose may decline further. Pentane mixtures (pentane, isopentane, and cyclopentane) are used as a blowing agent for polystyrene foam and as a polystyrene solvent. Pentanes are good solvents for certain materials. Due to their low boiling points pentanes are used in refrigerant blends. They are used for this purpose in geothermal power stations. They are also used in some pesticides. Hexane (C6H14) and its isomers are widely used as solvents as well as gasoline additives. They are used to extract cooking oils and for glues as well. Much of natural gasoline is used as a blendstock in gasoline. It also used to denature ethanol and sometimes to make E85. In denaturing ethanol (making it unfit for human consumption) natural gasoline is required to be added to make up 2% of the ethanol by volume.

Plant Condensate vs. Lease Condensate

Another name for natural gasoline is “plant condensate” to differentiate it from “lease condensate.” They are called condensates because they are light liquids. Plant condensate is derived from gas processing plants while lease condensate comes from wells. Lease condensate also separates out by gravity in the geographical low points of pipelines, where it is called “drip gas.” Lease condensate typically has more heavies, C6 through C8. These definitions, or naming conventions are becoming more specific and official. The EIA recently proposed (2013) definitions are as follows:

Lease Condensate: Light liquid hydrocarbons recovered from lease separators or field facilities at associated and non-associated natural gas wells. Mostly pentanes and heavier hydrocarbons. Normally enters the crude oil stream after production.

Plant Condensate: Liquid hydrocarbons recovered at inlet separators or scrubbers in natural gas processing plants at atmospheric pressure and ambient temperatures. Mostly pentanes and heavier hydrocarbons, equivalent to pentanes plus.

The EIA also proposed that natural gasoline be considered a specific subset of pentanes plus that is mostly pentanes and hexanes and that is a commodity product.

Tar Sands Diluent 

In the U.S., over 40% of natural gasoline is shipped to Canada via truck and/or pipeline to be used as a diluent – to dilute the thick bitumen of the tar sands so that it becomes less viscous and more liquid. It also increases the API gravity.  Basically the diluent allows the bitumen to flow better in the pipelines. Many U.S. refineries are set up to refine heavy crude such as this composite. 

Natural Gasoline Pricing and Supply/Demand Dynamics

Natural gasoline is the highest priced of the NGLs. An NGL composite price is also utilized in the market. NGLs are transported as “y-grade,” also called “raw mix,” to processing plants that separate out the alkanes (C2, C3, C4, C5+) into “purity products.” The EIA predicts near-term low to modest growth in natural gasoline production, flat to slight consumption growth, and low to modest growth in exports. They also point out that 2015 was a big growth year for natural gasoline production, consumption, and export growth so up to modest growth going forward is still good news for producers. 40% of U.S. natural gasoline is exported to Canada, for diluent. In 2014 the Cochin Pipeline that previously brought propane from Canada to the U.S. Midwest, was reversed to flow natural gasoline and other light petroleum liquids to Canada. There are interconnects coming from the Marcellus/Utica rich gas and condensate areas. This is one of quite a few pipeline reversals brought about by increased Appalachian NGL and nat gas supply. A recent example of a new natural gasoline pipeline is the 42 mile Cornerstone Pipeline by Marathon currently being built from the Utica rich gas area in Harrison County, Ohio to a refinery in Canton, Ohio. This pipeline will also ship propane, butane, and condensate mix, in batches.

As mentioned earlier the use of natural gasoline for petrochem feedstock is declining. As with the other NGLs the U.S is oversupplied but as long as there is global demand and with new and recently activated pipelines and export facilities the exports will flow. Rusty Braziel thinks natural gasoline could lose some demand from its use for blending into gasoline from competition from light crude, condensate, and from diluent recovery from heavy Canadian crude at the refineries. Naptha around the world is in a similar position, being displaced as a petrochem feedstock by cheaper U.S. NGLs. Natural gasoline, as well as the other NGLs, requires special processing and special pipelines so those costs are added to the market costs when figuring margins. These are called F & T costs, which refer to fractionation and transportation costs.

Hydrocarbon Gas Liquids have more than doubled over the last 7 years and one question is: How much room will there be for exports in the coming years? Modest growth in demand is predicted in the short-term. Natural gasoline is the least abundant of the NGLs and the highest priced. Yet its continued demand is not certain. The price of natural gasoline trends well with the the WTI index NGL composite price.




  
References: 

Natural Gasoline – entry at Wikipedia.com

It’s a Natural Fact – Let’s Get Crackin – Part V: Natural Gasoline – by Rusty Braziel, in RBN Energy Blog, June 17, 2012

Short-Term Energy Outlook for Hydrocarbon Gases – by Energy Information Administration (EIA), March 16, 2016

What Are Natural Gas Liquids and How Are They Used? – by EIA, April 20, 2012

Pentane – entry at Wikipedia.org

Hexane – entry at Wikipedia.org

The Domino Effect: How the Shale Revolution is Transforming Energy Markets, Industries, and Economies - by E. Russell Braziel

EIA Proposed Definitions for Natural Gas Liquids – Energy Information Administration, June 14, 2013

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