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Which type of natural gas are companies most interested in extracting from the Marcellus and Utica



Published: Wed, January 1, 2014 @ 12:00 a.m.

Which type of natural gas are companies most interested in extracting from the Marcellus and Utica shales right now, and why?

Gas companies are looking for wet gas, which is driving their current movement within Ohio. Drilling rigs began leaving central and eastern Pennsylvania to come to Ohio in the past two years because the Marcellus Shale in many areas is primarily a dry-gas field.

There are large amounts of dry gas within the Marcellus, but dry gas is trading at just more than $4 per thousand cubic feet in the most-recent figures from the EIA. Natural-gas liquids, on the other hand, are selling for around $38 per barrel, according to figures from Midstream Energy Group.

This means natural-gas liquids are generating more than twice the price for natural-gas companies.

The reality is most companies would like to find another field like the Bakken in North Dakota, Montana and parts of Canada that contains significant amounts of oil.

Oil is currently trading for $98.51 per barrel. Companies that focus on natural gas, however, are looking for a “liquid-rich play.”

There is also more natural-gas liquids found within the Marcellus Shale in the western part of Pennsylvania, which is why drilling, permitting and leasing has increased in nearby counties such as Beaver, Mercer and Lawrence.

What are the differences between pipelines meant to carry wet natural gas and those that carry dry natural gas?

This is both a simple and complex question. The reality is there is no difference in the initial pipelines; both materials travel in the same gathering pipelines together to a processing facility.

But there is a significant amount of difference between how the wet gases such as butane and propane and dry gas, or methane, are treated once they arrive at a processing facility.

All gas, oil and condensate from the drilling process comes to the well head. But in close proximity to the well are facilities that produce what is referred to as “lease condensate,” which consists of a mixture primarily of pentanes and heavier hydrocarbons such as oil, which is separated as a liquid from natural gas, according to the U.S. Energy Information Administration.

Then wet gas and dry gas travel together to a processing facility where the wet gas and dry gas are separated. The dry gas, at that point, goes into national transmission pipelines and can be delivered directly to homes.

Any remaining natural-gas liquids extraction stream is directed to a separate plant to undergo what is referred to as a “fractionation” process, according to EIA. Natural-gas liquids are shipped by several methods, including pipeline, truck, rail car, or cargo ship.

Questions about shale development or the fracking process can be sent to news@shalesheet.com.


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