American Oil and Gas Reporter - March 2018 - 40

SpecialReport: Industry Infrastructure
cessing plant. In this case, the plant is recovering 90 percent of
the ethane and 99 percent of the propane, butanes and natural
gasoline. The upper section of Table 2 provides the recovered
gallons of each NGL (green oval), which then is used in the
value analysis to calculate the dollars per day ($/d) of value
created by selling the NGLs at market prices.
The column to the far right also gives the Btu content of the
feed gas byproduct and the total Btus of 1,219 Btu/cubic foot
for the feed gas (orange oval), which can be used to calculate
the cost of the inlet gas stream. The red oval in the lower
section of Table 2 denotes the volume (167 MMcf/d) while the
blue oval shows the Btu content of the residue gas (1,020
Btu/cubic foot), which are then used to determine the sales
value of the residue gas after removing NGLs.
Table 3 shows the natural gas processing value calculation
for the Eagle Ford plant with 90 percent ethane recovery, which
brings all the analysis together to answer the question of how
much money can be made producing ethane versus rejecting.
The blue cells on the left-hand side are all the inputs needed to
make the calculations. The price of methane (red oval) is the
spot price of Henry Hub natural gas on Feb. 13, while Mont

Belvieu NGLs prices on the same date are in the green oval.
The purple oval is the transportation and fractionation (T&F)
charge to get the y-grade NGLs transported to and fractionated
at Mont Belvieu. In this case, the analysis assumes a $0.05/gallon
cost to transport NGLs by pipeline and a $0.05/gallon fractionation
fee to separate into purity products ($0.10/gallon total).
Assuming no plant fuel or loss, contractual processing rights,
water content or other engineering refinements, the orange oval
shows the $/d value created by processing the gas to strip the
NGLs and sell each NGL and residue gas separately at market
prices. Recovering 90 percent of the ethane and selling those
gallons at market prices would create $63,706/d from 439,351
gallons of recovered ethane.
The ethane rejection value (pink circle) converts the price of
ethane from cents/gallon to dollars/MMBtu after factoring in
the T&F charge to provide a relative comparison to the price of
natural gas. If the ethane rejection value is less than the
$2.59/MMBtu price of methane (which it is in this case), the
economics of rejecting ethane are better than recovering it.
To illustrate, the blue oval denotes the cost of inlet gas and
the dollars created by selling the residue gas. For both inlet

TABLE 3
Value Table
(90 percent Ethane Recovery)

TABLE 4
Quantity and Residue Gas Tables
(0 percent Ethane Recovery)

40 THE AMERICAN OIL & GAS REPORTER



American Oil and Gas Reporter - March 2018

Table of Contents for the Digital Edition of American Oil and Gas Reporter - March 2018

Contents
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