There is, it seems, a downside to the tremendous natural gas production results in the Marcellus Shale, according to energy consultant Bentek Energy LLC.
Without a viable offtake for ethane, the shale producers may be forced to curtail gas production, Bentek said in a study issued late Thursday. The study addresses how ethane is impacting gas production and examines several ongoing projects that are designed to address the issue. Bentek's researchers also assess the viability of each of the options now on the table.
"In most natural gas producing regions, ethane is a highly valued byproduct of natural gas production, sold as an important feedstock for the petrochemical industry," noted the Evergreen, CO-based consultant. "But in the rapidly growing Marcellus producing region of the Appalachian basin, ethane is viewed by some natural gas producers as a contaminant that could threaten development plans in the area."
No one doubts the rapid build-up of gas output from the Northeastern shale play. On Thursday the Pennsylvania Department of Environmental Protection reported that between July 1, 2009 and June 30, 2010 the state's 632 wells in the Marcellus play produced 180 Bcf of natural gas (see Daily GPI, Sept. 10).
"In Pennsylvania alone, receipts into pipeline systems have increased four-fold from 0.3 Bcf/d in early 2009 to 1.2 Bcf/d in August 2010," Bentek estimated. "Over the next five years Marcellus production is expected to reach at least 5 Bcf/d, with some projections exceeding 10 Bcf/d."
However, as the shale play's volumes ramp up across the region, "a serious problem is emerging for producers of high-BTU, or rich gas," noted the consultant. Before the high-BTU gas is delivered to pipes to transport to market, natural gas liquids (NGL) have to be extracted from the gas, and ethane is "by far the largest by volume" of the hydrocarbons that make up NGL in the region.
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