UTAH PETROLEUM ASSOCIATION
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PROCESSING AND TRANSPORTING OIL & GAS

The midstream sector of the oil and gas industry is made up of companies involved in gathering, processing, transportation, and marketing of natural gas, natural gas liquids (NGL), condensate and crude oil. A safe and efficient transportation system of both unrefined and refined petroleum products is critical to the success of both the upstream and downstream sectors of Utah’s petroleum industry.

Gathering

Natural gas and crude oil gathering systems are a fundamental aspect of the midstream sector. An efficient, reliable, and safe gathering system greatly improves oil and gas output and profitability. A natural gas pipeline system begins at a natural gas producing well or field. In the producing area many of the pipeline systems are primarily involved in "gathering" operations. That is, a pipeline is connected to a producing well, converging with pipes from other wells where the natural gas stream may be subjected to an extraction process to remove water and other impurities if needed. Natural gas exiting the production field is usually referred to as "wet" natural gas if it still contain significant amounts of hydrocarbon liquids and contaminants.

Under certain conditions some or all of the natural gas produced at a well may be returned to the reservoir in cycling, repressuring, or conservation operations and/or vented and flared. At this stage it is a mixture of methane and other hydrocarbons, as well as some non-hydrocarbons, existing in the gaseous phase or in a solution with crude oil. The principal hydrocarbons normally contained in the natural gas mixture are methane, ethane, propane, butane, and pentane. Typical non-hydrocarbon gases that may be present in reservoir natural gas are water vapor, carbon dioxide, helium, hydrogen sulfide, and nitrogen.

In proximity to the well are facilities that produce what is referred to as "lease condensate", that is, a mixture consisting primarily of pentanes and heavier hydrocarbons which is recovered as a liquid from natural gas. Other natural gas liquids, such as butane and propane, are recovered at downstream natural gas processing plants or facilities.

Once it leaves the producing area, a pipeline system directs flow either to a natural gas processing plant or directly to the mainline transmission grid. Nonassociated natural gas, that is, natural gas that is not in contact with significant quantities of crude oil in the reservoir, is sometimes of pipeline quality after undergoing a decontamination process in the production area, and does not need to flow through a processing plant prior to entering the mainline transmission system.

The gathering of crude oil consists of aggregating crude oil production through gathering systems and by truck delivery to terminals where crude oil is stored for further delivery to downstream markets by truck, pipeline or rail.

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Processing

Natural gas and crude oil gathering systems are a fundamental aspect of the midstream sector. An efficient, reliable, and safe gathering system greatly improves oil and gas output and profitability. A natural gas pipeline system begins at a natural gas producing well or field. In the producing area many of the pipeline systems are primarily involved in "gathering" operations. That is, a pipeline is connected to a producing well, converging with pipes from other wells where the natural gas stream may be subjected to an extraction process to remove water and other impurities if needed. Natural gas exiting the production field is usually referred to as "wet" natural gas if it still contain significant amounts of hydrocarbon liquids and contaminants.

Under certain conditions some or all of the natural gas produced at a well may be returned to the reservoir in cycling, repressuring, or conservation operations and/or vented and flared. At this stage it is a mixture of methane and other hydrocarbons, as well as some non-hydrocarbons, existing in the gaseous phase or in a solution with crude oil. The principal hydrocarbons normally contained in the natural gas mixture are methane, ethane, propane, butane, and pentane. Typical non-hydrocarbon gases that may be present in reservoir natural gas are water vapor, carbon dioxide, helium, hydrogen sulfide, and nitrogen.

In proximity to the well are facilities that produce what is referred to as "lease condensate", that is, a mixture consisting primarily of pentanes and heavier hydrocarbons which is recovered as a liquid from natural gas. Other natural gas liquids, such as butane and propane, are recovered at downstream natural gas processing plants or facilities.

Once it leaves the producing area, a pipeline system directs flow either to a natural gas processing plant or directly to the mainline transmission grid. Nonassociated natural gas, that is, natural gas that is not in contact with significant quantities of crude oil in the reservoir, is sometimes of pipeline quality after undergoing a decontamination process in the production area, and does not need to flow through a processing plant prior to entering the mainline transmission system.

The gathering of crude oil consists of aggregating crude oil production through gathering systems and by truck delivery to terminals where crude oil is stored for further delivery to downstream markets by truck, pipeline or rail.

There are 11 natural gas processing plants currently operating in Utah. As of 2010, combined they processed an average of approximately 243 million cubic feet of natural gas daily.

Natural gas, as it is used by consumers, is much different from the natural gas that is brought from underground up to the wellhead. Although the processing of natural gas is in many respects less complicated than the processing and refining of crude oil, it is equally as necessary before its use by end users.

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The natural gas used by consumers is composed almost entirely of methane. However, natural gas found at the wellhead, although still composed primarily of methane, is by no means as pure. Raw natural gas comes from three types of wells: oil wells, gas wells, and condensate wells. Natural gas that comes from oil wells is typically termed ‘associated gas’. This gas can exist separate from oil in the formation (free gas), or dissolved in the crude oil (dissolved gas). Natural gas from gas and condensate wells, in which there is little or no crude oil, is termed ‘nonassociated gas’. Gas wells typically produce raw natural gas by itself, while condensate wells produce free natural gas along with a semi-liquid hydrocarbon condensate. Whatever the source of the natural gas, once separated from crude oil (if present) it commonly exists in mixtures with other hydrocarbons; principally ethane, propane, butane, and pentanes. In addition, raw natural gas contains water vapor, hydrogen sulfide (H2S), carbon dioxide, helium, nitrogen, and other compounds.

Natural gas processing consists of separating all of the various hydrocarbons and fluids from the pure natural gas, to produce what is known as ‘pipeline quality’ dry natural gas. Major transportation pipelines usually impose restrictions on the make-up of the natural gas that is allowed into the pipeline. That means that before the natural gas can be transported it must be purified. While the ethane, propane, butane, and pentanes must be removed from natural gas, this does not mean that they are all ‘waste products’.

In fact, associated hydrocarbons, known as ‘natural gas liquids’ (NGLs) can be very valuable by-products of natural gas processing. NGLs include ethane, propane, butane, iso-butane, and natural gasoline. These NGLs are sold separately and have a variety of different uses; including enhancing oil recovery in oil wells, providing raw materials for oil refineries or petrochemical plants, and as sources of energy.

While some of the needed processing can be accomplished at or near the wellhead (field processing), the complete processing of natural gas takes place at a processing plant, usually located in a natural gas producing region. The extracted natural gas is transported to these processing plants through a network of gathering pipelines, which are small-diameter, low pressure pipes. A complex gathering system can consist of thousands of miles of pipes.

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Transportation

Safely and efficiently moving petroleum products around the State and nation is critical to the success of the industry and the convenience and utility of consumers. Oil and gas are moved either by pipe, truck or rail.

Pipelines

Approximately 21,000 miles of pipelines crisscross Utah, safely transporting natural gas, crude oil, refined petroleum and other energy products every day to homes, businesses and to other parts of the country. Pipelines transport products that are part of our every day life and contribute to Utah’s vitality and robust economic activity.

The Utah Public Service Commission’s Division of Public Utilities inspects, regulates and enforces intrastate gas pipeline safety requirements. The Office of Pipeline Safety (OPS), within the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA) inspects, regulates and enforces interstate gas pipeline safety requirements and both interstate and intrastate liquid pipeline safety requirements.

Natural gas produced in Utah is transported via a large network of pipelines. All types of pipelines criss-cross the State, from large diameter lines that transport natural gas to other states to very small lines that deliver natural gas to your home or business.

Several crude oil pipelines also run throughout Utah, mostly transporting oil produced in other states bound for our refineries in the Salt Lake area. Most of the crude oil produced in Utah is more difficult to transport by pipeline due to it’s highly paraffinic nature. Without being heated, the waxy crudes set up to the consistency of shoe polish. A great deal of research is being done within the industry and in Utah’s systems of higher education to find better ways to transport Utah’s crude oil resources. New intrastate Utah crude oil pipelines have also been proposed and are in the planning and development stages. Market conditions play a huge role in determining when and if these new pipelines will be built. For more information on pipelines, see UPA’s Transportation Page within the Issues section of the website.

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Trucking

The large majority of Utah’s oil production is transported for refining and marketing by way of truck. The trucking industry is critical to the State of Utah and the petroleum industry. Trucking provides that link between Utah’s growing oil production industry and the refining sector located in Salt Lake City and beyond. As the State’s crude oil production increases and outpaces the refining capacity in Salt Lake, a small but growing portion of oil production is being trucked to rail terminals and shipped outside of Utah.

Trucks not only transport the products we produce as an industry but also deliver raw products and materials that make it possible to do our work. Truck safety is obviously a critical part of operating a successful oil and gas business. As an industry, a key focus is on safety and doing things the right way.

The oil and gas industry requires a safe and efficient transportation system to be successful. We promote and support adequate funding for highways and roads, both at the state and local levels.

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Rail

As oil production in Utah’s Uinta Basin has steadily increased, so has the need for more energy takeaway capacity from the area. More oil is being produced in the Basin than can be refined in Salt Lake’s refineries, so alternative methods to efficiently and economically transport Utah’s crude to other markets is essential. To a large extent, rail transportation fits that bill.

While still not to the level of many oil producing areas of the country, Utah has seen a significant increase in the amount of crude oil being transported via rail. Crude is trucked from the producing areas to rail connection facilities and then put on trains and shipped to market within and outside Utah.

In light of increased volumes of crude oil moving by rail, the nation's freight railroads have done top-to-bottom reviews and improved their operations and federal regulators have issued new regulations related to how railroads are moving crude oil by rail. The result: freight railroads move each oil train under rules as rigorous as those required for more hazardous materials.

Rail is also critical in transporting raw materials to and finished products and other feedstocks out of Utah’s petroleum refineries. Rail is becoming an increasingly important player in Utah’s energy delivery and transportation landscape.

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