The natural gas gathering process begins with the drilling of wells into gas-bearing rock formations. Once extracted from the earth, some processing happens at the wellhead, but complete processing happens at a plant. Natural gas is transported to the processing plants through a gathering system, which is a network of small-diameter, low-pressure pipelines.
Raw natural gas brought from the earth to the wellhead is much different than the natural gas that we as consumers use every day. Almost all raw natural gas must be purified, or “processed,” in some way to meet quality standards and regulations.
In addition, and equally important, natural gas is processed to separate the heavier hydrocarbon liquids from the gas, which are valuable by-products of gas processing known as natural gas liquids (NGLs). NGLs include natural gasoline, butane, iso-butane, propane and ethane. GPA Midstream members represent more than 90 percent of all natural gas liquids extracted from produced gas in the United States.
Natural gas that reaches its destination after the gathering and processing stages may not be needed right away, so it’s injected into underground storage facilities when the demand is low, and withdrawn from storage when demand peaks. The underground facilities include salt dome caverns, bedded salt caverns and depleted reservoirs.
You may not realize it, but we all rely heavily upon a stored natural gas supply to meet our needs when the demand goes up. The demand is typically higher in winter months because we rely on natural gas to heat our homes and businesses.
Natural gas produced at a particular well may have to travel a great distance to reach its destination, and pipelines provide the safest method of transportation for natural gas and NGLs. Three types of pipelines are used for natural gas and natural gas liquids: gathering systems, transmission pipelines and distribution pipeline systems.
Companies operating in the midstream industry are ultimately responsible for finding a home for the natural gas and natural gas liquids (NGLs) that they have gathered and processed, and that’s where marketing comes in. A great amount of detail is involved in marketing natural gas and NGLs. To simplify a potentially long explanation, marketers find buyers for natural gas and natural gas liquids, either to resellers (other marketers and distribution companies) or end-users.
Marketing natural gas and NGLs can include all of the intermediate steps that any purchase requires: arranging transportation, storage, accounting, and basically any other step required to facilitate the sale of natural gas.