Economics

Natural Gas Liquids

Published Oct 25, 2023

Definition of Natural Gas Liquids

Natural gas liquids (NGLs) are hydrocarbons that are separated from natural gas during the extraction process. They are a valuable byproduct of natural gas production and can be separated into various components, including ethane, propane, butane, and pentanes. NGLs are typically used as feedstock for petrochemical production, as fuel in residential and commercial heating, and as a blending component in gasoline production.

Example

Let’s consider an example of natural gas liquids being used as feedstock for petrochemical production. Petrochemical plants rely on NGLs to produce a wide range of products, including plastics, fibers, rubbers, and solvents. The separation of NGLs into their individual components is typically done at natural gas processing plants or gas plants.

Once separated, ethane, for example, can be used as a raw material for the production of ethylene, which is a key building block for a variety of plastics. Propane can be used as fuel for heating and cooking in residential and commercial settings. Butane, on the other hand, is commonly used as a fuel for lighters and stoves. Pentanes are often used as a blending component in gasoline, improving its octane rating and reducing emissions.

Overall, the extraction and utilization of natural gas liquids play a vital role in various industries and provide valuable products and energy sources.

Why Natural Gas Liquids Matter

Natural gas liquids are essential resources that have multiple uses in various industries. They serve as a feedstock for the production of numerous petrochemical products, contribute to energy supply for heating, cooking, and transportation, and are essential for fulfilling the growing demand for plastics and other materials. As the world transitions towards cleaner energy sources, the efficient utilization and management of natural gas liquids become crucial for sustainable development and reducing reliance on fossil fuels.