Most Capacity Growth Will Come from the EMEA

Monday 16 December 2013, Amsterdam

The Highest Concentration of Active Natural Gas Processing Capacity Is in the Americas

Roughly 46% of global natural gas processing capacity is located in the Americas. This translates to 61.2 trillion cubic feet (tcf) on an annual basis or 167.7 billion cubic feet per day (bcf/d). This super-region also leads in terms of the number of active natural gas processing plants globally with 1,449, compared to 206 in Europe, the Middle East and Africa (EMEA) and 138 active plants in the Asia-Pacific region.  

There are many reasons for the large concentration of natural gas processing plants in the Americas, including the large number of natural gas pipelines in the super-region; the large number of natural gas production fields; the large number of independent operators and midstream companies working in the super-region; and a regulatory culture that allows private companies to build their own infrastructure.

Natural gas processing has been a part of the business from its earliest days as a way to purify the gas for residential, utility, commercial and industrial usage as well as to strip out high-value Natural Gas Liquids (NGLs) including ethane, propane, butane, pentane and hexane and also condensates. The NGLs, in particular, are the chief feedstock for most of the world’s petrochemical industry and are considered a high-value commodity wherever they are produced. Condensates, which are produced along with natural gas from the same well, are very light, low sulfur crude oil streams that are stripped out by natural gas processing plants.

The advent of natural gas produced from shale formations in the US through the use of hydraulic fracturing has led to a superabundance of new natural gas production and the need for more natural gas processing capacity to be utilized and built. This “wet” gas is saturated with NGLs so natural gas processing plants have been working overtime to strip out the higher-value NGLs. So much natural gas processing has gone on in the US over the last few years, in fact, that prices for ethane and propane at prime market hubs Mont Belvieu, Texas and Conway, Kansas have fallen to their lowest levels in many years.  

While low prices on ethane and propane do not sound good for producers, they have provided an economic incentive for petrochemical producers to construct plants in the US and/or to ramp up operations in the Americas to take advantage of the lower-priced feedstock. With the current shale-produced natural gas production forecast showing this boom likely to last at least another forty years, it would seem to be a wise investment to continue to process natural gas for the petrochemical industry in this region.  

After the Americas, EMEA has the second largest active gas processing capacity at 56.8 tcf’ or 155.6 bcf/d. The Asia-Pacific region has the least amount of active gas processing capacity at 15.1 tcf, or 41.4 bcf/d.

The US has the highest active natural gas processing capacity of all the countries in the Americas super-region, at 32 tcf, (or 87.7 bcf/d) on an annualized basis.  

In EMEA, Iran has the largest installed base of active natural gas processing capacity at 11.2 tcf, or 30.7 bcf/d. In the Asia-Pacific region, China has the largest base of installed capacity, at 2.7 tcf, or 7.4 bcf/d.

The Most New Capacity Additions Will Be Built in EMEA between 2013 and 2017

Among the three super-regions, EMEA plans to build the most new capacity between 2013-2017 at 10.1 tcf, or 27.7 bcf/d. Most of this capacity will be centered in Iran and Saudi Arabia. The other supper-regions will also see capacity increases but not at the same scale as will be seen in the EMEA. The Americas supper-region will build 4.4 tcf, or 12.1 bcf/d, of new capacity, while the Asia-Pacific region will construct 2.4 tcf (6.6 bcf/d) of new capacity.

National Iranian Gas Company Is the Largest Natural Gas Processing Plant Operator Globally

National Iranian Gas Company (NIGC) operates the most active gas processing capacity among all operators worldwide. NIGC’s total capacity is 7.9 tcf, or 21.6 bcf/d, which accounts for 5.9% of the global total. Gazprom and Saudi Aramco have the second and third-highest capacities, at 7.7 tcf (21.1 bcf/d) and 6.0 tcf (16.4 bcf/d), respectively.

NIGC operates 13 active gas processing plants in Iran. Of these, South Pars Gas Plant has the largest processing capacity at 2.4 tcf (6.6 bcf/d). The Fajr Plant, the Parsian Plant, and the Kangan-Nar Plant are the company’s other major plants, with capacities of 1.4 tcf (3.8 bcf/d), 1.0 tcf (2.7 bcf/d) and 1.0 tcf (2.7 bcf/d), respectively.