Natural Gas Condensate Will Provide Major Boost to OPEC Oil Production

Condensate fuels are a byproduct of natural gas excavation. (image: wikimedia.org)

The National reported yesterday that OPEC countries are expected to add 2 million barrels per day (bpd) of liquids production capacity by the end of next year through projects to expand natural gas output. “Condensate,” as the article refers to liquids present in natural gas wells, “is almost identical to premium quality light crude oil, and can be processed in petroleum refineries to yield products such as [gasoline]. But it is excluded from OPEC quotas because it is a by-product of gas production.”

OPEC needs to increase natural gas output, in any case, to meet rising domestic demand from power stations, water desalination plants and heavy industry as well as for re-injection at aging oilfields where the gas is used to bring oil to the surface.  The liquid by-products are an added bonus.During the process to extract the dry, pipeline gas (almost pure methane)  used by consumers from the raw material produced by natural gas wells, Natural Gas Liquids (NGL’s) are also recovered. These can include, but are not limited to, ethane, propane, butane, pentane and natural gasoline. The term “condensate” is broadly defined as an NGL that precipitates out of, or is stripped from, produced natural gas. Unlike LPG, condensate remains a liquid without specialized infrastructure and in many ways can be considered a sweet, light crude equivalent.
According to the International Energy Agency (IEA), which included the new projection for OPEC liquids output in its latest monthly oil market report, the Middle East oil producers Saudi Arabia, Qatar, Iran and the UAE would provide 90 per cent of the additional volumes, with Nigeria accounting for the remaining 10 per cent.

A related article in the Tehran Times said the forecast rise in the amount of condensate and other liquids to be pumped from gas deposits would be equivalent to adding another oil exporter to the group nearly the size of Kuwait, and bigger than both Libya and Angola!

This development was predicted last year by the IEA, which said in its World Energy Outlook 2008, that “Global NGL production is projected to almost double, from 10.5 million bpd to just under 20 million bpd by 2030. This increase is driven by the steady rise in natural gas output. The bulk of the increase comes from OPEC countries, where gas production to supply local markets and new LNG projects is projected to expand quickest.”