What does the natural-gas supply chain look like?
The natural-gas supply chain starts with upstream activities, or the operations aimed at locating, testing and drilling for natural gas.
Once a well starts producing, wet and dry natural gas often travel together by pipeline to a processing facility, where they are separated and treated.
This begins the midstream stage of operation, which involves processing, storing, transporting and marketing natural gas
Dry gas then is usually ready to travel by pipeline to utility companies to be distributed to residential and commercial customers.
The dry gas found in the Utica and Marcellus shales, sometimes referred to as lean gas, typically contains few contaminants and requires little or no treatment at a processing facility.
But in other plays such as Louisiana’s Haynesville Shale, dry gas can contain carbon dioxide and hydrogen sulfide, which must be removed at a processing plant.
Processing plants separate impurities and hydrocarbons from raw natural gas. That process produces “pipeline quality” natural gas, known as methane, to be delivered to customers.
When processed, wet-gas shale plays also produce natural-gas liquids, or NGLs, such as ethane propane, butane and pentane. These materials are valuable and have many applications in nearly all sectors of the economy.
NGLs from the wet-gas-rich Utica play travel by truck, pipeline and rail to fractionation facilities, which break NGLs down to their basic components by boiling them off in stages one by one.
Gas often undergoes a process of liquification, or the conversion of natural gas into a liquid state by cooling the gas to minus-260-degrees Fahrenheit. According to the American Petroleum Institute, liquification helps remove dust, acid gases, helium, water and heavy hydrocarbons that can create problems in the downstream phase.
When ready for distribution, gas is now in the downstream process, which includes any operations after production.
Gas is generally stored underground in three places. The most common of these is depleted natural-gas reservoirs. According to API, more than 80 percent of natural-gas storage capability consists of these reservoirs, which are easy to convert and are usually located near consumption centers and pipelines.
For distribution, natural gas travels by pipeline to local distributors, which pass it on to residential and commercial customers. It also can go to industrial facilities and power plants.
Another main destination is natural-gas hubs, where natural gas is priced and traded throughout the country.
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