Natural Gas Processing and Handling

In 2019, the US experienced the lowest natural gas prices since 2016. This was despite natural gas consumption increasing in the residential and commercial sector by 2% (between October and December) according to the US Energy Information Administration (EIA). In July and August, the electric generation sector also experienced an increase in natural gas consumption because of above-average humidity levels in the Midwest and Northeast. Natural gas inventories at the end of March recorded the lowest levels since 2014 during withdrawal season, whereas the injection season recorded the second-highest levels from sustained growth in natural gas production. This trend of low gas prices was because of natural gas production growth, as prices continued to decline through the rest of 2019.

The EIA forecasts an increase in natural gas consumption by 1.4 Bcf/D (1.7%) in 2020. The average US natural gas price is projected to fall by 9% to $2.33/million British thermal units (MMBtu) in 2020. The EIA said it expects continued growth in natural gas production in 2020 in response to improved drilling, increased associated gas production, and increased Appalachian and Permian pipeline takeaway capacity. As of 3 February, Henry Hub spot price closed at $1.82/MMBtu, $0.87 lower than the same time last year. Weather temperatures were warmer than expected, except in the Northeast and Midwest where it was colder than expected, hence affecting winter demand.

Globally, the Paris-based International Energy Agency’s 5-year forecast shows natural gas demand driven by Asia-Pacific growth, with the region accounting for approximately 60% of the total gas consumption forecasted increase through 2024. China is expected to be at the forefront of this demand growth because it is expected to constitute approximately 40% of the total gas demand increase through 2024.

The global liquefied petroleum gas (LPG) market has continued to grow reasonably in the past decade, and the US, as a result of its strong domestic LPG production, has ascended in recent years as the largest LPG producer and exporter in the world. The Asia-Pacific region, because of its growing population, constitutes the highest market share of the global LPG consumption. The global LPG market trend is predominantly supply-driven by natural gas and crude oil but not so much from refining. According to IHS Markit, LPG demand in Asia-Pacific grew approximately 3.5% in 2018 and has continued to maintain its steady growth in 2019. Global supplies of LPG are expected to rise approximately 5% to 325 million tonnes in 2020. By region, approximately 28% of the global supplies will be from the US and approximately 20% from the Middle East. Asia-Pacific will continue to be the main driver for LPG demand growth, accounting for approximately 45% (4.6 million B/D) of the global demand.

The prominent increase in US LPG exports has resulted in significant changes in the LPG global trade flow patterns in recent years, demonstrating a shift from a dependency on exports from the Middle East.

More can be learned by attending the SPE Annual Technical Conference and Exhibition in Denver on 5–7 October and the SPE Asia Pacific Oil and Gas Conference and Exhibition in Perth, Australia, on 8–11 September.

This Month's Technical Papers

Study Correlates Hydrate Blockage Risk and Gas/Liquid Flow Pattern In Horizontal Pipelines

Integrated Design Assessment Optimizes Layout and Engineering of Timor Gas Field

What Role Will LNG Play in Balancing Gas Demand in the MENA Region?

Recommended Additional Reading

SPE 195759 Solutions for Seal Gas Leakage Recovery in Methane Compression: Integration Into Processing Lines or Gas Valorization Systems by Filippo Conforti, Baker Hughes, et al.

SPE 197582 Running Sour Hydrocarbon Assets: Eni’s Story of Experience by Luciano Scataglini, Eni, et al.

SPE 195555 Experimental Investigation of Integrity Issues of Underground Gas Storage Containing Hydrogen by Erik Clemens Boersheim, Clausthal University of Technology, et al.

Ehsaan Ahmad Nasir, SPE, is a reservoir engineer at Baker Hughes. He has been with Baker Hughes since 2012. Nasir is currently deployed in the US Permian geomarket. His experience includes evaluation of prospects for investment, production forecasting, statistical modeling using machine-learning methods, pressure- and rate-transient analysis, horizontal-multifractured-well production analysis, well-screening studies to identify production issues, data-mining studies in unconventional plays, and reservoir simulation. Nasir holds a master’s degree in petroleum engineering from Texas A&M University. He is a member of the JPT Editorial Committee and can be reached at


Ifunanya C. Ekwunife is a geoscientist with Baker Hughes working for the Cased Hole Group. In her primary role, she specializes in cased-hole data processing and interpretation. Ekwunife’s current role also involves supporting a multidisciplinary team developing an innovative predictive well-integrity software. She holds bachelor’s and master’s degrees in geology from the University of Oklahoma. Ekwunife has experience in underground natural gas storage reservoirs, reservoir characterization, and unconventional shales.

Natural Gas Processing and Handling

Ehsaan Ahmad Nasir, SPE, Reservoir Engineer, and Ifunanya C. Ekwunife, Geoscientist, Baker Hughes

01 April 2020

Volume: 72 | Issue: 4



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