A great opportunity exists in the LNG segment for those in the market and for those who would like to be. That opportunity is to integrate LNG into new or existing NGL facilities and operate both together for maximum output and efficiency.
From an economic perspective, LNG is a product that finds itself in the rare combination of high demand and high supply. That adds up to new revenue streams, something many companies should be interested in.
Tulsa, Okla.-based Linde Process Plants Inc. has developed StarLNGL technology that integrates the production of LNG into a new or existing NGL plant. This approach is a cost-effective method to produce LNG because it eliminates redundant infrastructure needs and improves the overall efficiency of the NGL operation—it can even increase NGL production.
Some industry context
The current prices of crude oil and natural gas commodities can easily distract, but U.S. midstream operators position themselves best by thinking long term and considering the vast potential on the horizon. The country is poised to remain one of the largest NGL suppliers for as long as two to three decades, according to many analysts.
Looking at just ethane, many industry experts are predicting production to double in the next 10 years, to roughly 2.5 million barrels per day (bbl/d). No surprise, considering the geographic growth now includes eastern Ohio, western Pennsylvania, West Virginia and North Dakota. This contrasts dramatically to our traditional focus on states like Texas, Louisiana, Kansas, Colorado and Wyoming as the sole markets for the midstream industry. It is refreshing to need a bigger map.
The opportunity is not lost on the petrochemical industry. This surge in U.S. natural gas production of NGL, including ethane, propane and butane, has prompted the industry to invest billions over the past year into expansion. Its goal is to take advantage of affordable NGL feedstocks to produce products like ethylene, detergents, plastics, synthetic rubber and other plastics as well as pharmaceuticals—all items with higher margins.
Infrastructure needs
There is no doubt about the demand, both domestic and foreign. The next question is whether sufficient infrastructure exists.
Part of this challenge is being addressed as pipelines are built to catch up. Examples are the 1,230-mile ATEX Pipeline, operated by Enterprise Products Partners LP, that came online in 2014 as well as the Aegis, a massive 425,000 bbl/d ethane transporter also run by Enterprise that spans from Texas shale fields to the Gulf Coast. It should be completed by year-end.
While this boom in shale has created opportunity, it certainly has not been maximized yet. In the Bakken Shale, for example, anywhere from 20% to 25% of the natural gas is lost to flaring because the infrastructure to capture, process and ship those products is still not in place. This means opportunity.
If those potential side products are not flared at the processing site, these valuable chemicals simply remain mixed with natural gas, only to be burned as fuel anyway, rather than being separated and marketed for additional economic value.
While investors evaluate their options, many companies also are searching for bolt-on acquisitions in the NGL segment or exploring non-traditional partnerships. Either way, there is a clear opportunity for companies to create enhancements that offer value for customers while opening new revenue sources. However, taking advantage of this opportunity requires significant capital to invest in a new, standalone LNG liquefaction plant.
A solution
At least one solution is to capture and process LNG in conjunction with an NGL plant. Linde’s StarLNGL builds on the company’s worldwide expertise within the LNG value chain.
The process takes advantage of existing cryogenic conditions because its feed gas is taken from the cryogenic column overhead of the NGL plant. This way, LNG can be made more efficiently. By contrast, a standalone LNG plant would take gas at atmospheric temperatures and then require additional duty on the refrigerant side to cool it to cryogenic levels.
Further, by routing some column overhead gas to the StarLNGL plant, the host NGL plant enjoys a debottlenecking advantage so that it improves plant throughput and operational efficiency.
Combined, this integrated solution will produce LNG while also increasing gas liquid recovery. Linde estimates a total efficiency increase between 5% and 10%.
“With those numbers, installing the LNG bolt-on will create savings to pay for the plant in roughly six months,” said Tina Edvardsson, Linde’s director of product management. “The efficiency increase alone is worth the investment.”
Getting technology to the job site
The Linde technology is designed to be efficient and flexible—from getting to the plant location to setting up the equipment to producing a marketable product.
The plant itself is a modular design, made to integrate with any new or existing plant. The equipment can be shipped by truck and arrives in multiple, segmented units. These pieces can be placed in the field into any configuration that bests suits the job site.
“Our engineering is highly standardized, but we also design it to be flexible,” said Ron Key, Linde’s vice president of technology and innovation. “Our philosophy is that we should make our product fit customer needs, not the other way around.”
Even when integrating into a plant already in operation, the retrofit process is easy and its effort, limited. The LNG unit needs only a few tie-ins to the existing piping system and requires a small footprint compared with the NGL plant. Linde manages this process from start to finish, collaborating with the customer’s plant team, including training to operate the new system at peak performance and making the most out of its operating flexibility.
The standardized StarLNGL plant has a nominal LNG capacity of 150,000 gallons (gal) per day, which is then specifically rated based on feed gas composition, ambient air temperature and NGL recovery column operating pressure. Tailoring the integrated process to a specific customer need is possible. With a turndown capability of around 30%, the plant can be run flexibly to the LNG demand needed without disturbing the NGL plant’s operation.
Alternatively, the StarLNGL plant can be run at full capacity while keeping LNG production at 30%. By increasing the reflux return sent to the NGL recovery column, it will increase NGL production instead of LNG. Although factors such as plant size and location of the job site can affect timing, Linde anticipates a leadtime of 12 months from order placement to delivery of core equipment modules.
Economic sense
Of course, the company has a specific interest in both natural gas and LNG, but after exploring the engineering, the concept of co-locating two plants together made economic sense. With the added benefit of debottlenecking existing NGL plants, it’s a huge win for midstream companies.
“We see great potential with LNG, and we’re taking it upon ourselves to move this segment of the market forward,” added Key. “While we are focused on providing innovative solutions to our customers, we also interested in bringing game-changing opportunities to the market.”
A diesel alternative
Another motivator in expanding the marketability of LNG is to position the fuel as a viable alternative to displace diesel, which is seeing current prices around $3 per gal. By contrast, a StarLNGL plant can provide LNG delivered at the pump at an estimated diesel gallon-equivalent of $1.50, which includes road tax.
This provides great financial advantage to over-the-road fleets. The required infrastructure certainly needs to develop further to make this fuel more readily available, particularly for long-haul trucking operations.
However, the existing locations of processing plants near transportation networks is more than promising. Engine conversions have also become much more affordable. Whereas previously they might cost close to $50,000 per vehicle, a retrofit today is much less at roughly $15,000.
“I really like the Linde StarLNGL plant from both a policy and business standpoint,” said Sam Combs, CEO of Tulsa-based COMSTAR Advisors LLC and former president of ONEOK Distribution Cos. “It is a simple and very functional way to improve the profitability of the NGL value chain by making it more efficient. Additionally, with NGL processing plants now dotting the landscape and a shortage of pipeline infrastructure, a StarLNGL plant can further improve the value chain by shortening the distribution channel for bringing clean, dense LNG energy to market. That’s good policy and good business, in my opinion. What’s not to like about that?”
Integration advantages
StarLNGL can easily be integrated with a variety of NGL recovery technologies including CRYO-PLUS, GSP and RSV plants. An alternative to the integrated StarLNGL solution would be constructing a standalone LNG plant, an option many processors may find cost prohibitive.
“Starting from scratch means entirely new infrastructure, utilities, controls and staff, not to mention real property,” said Edvardsson. “The integrated approach is a much more cost-effective way to add new revenue to your operation.”
“LNG providers are in liquefied fuel, whereas midstream companies are in the business of processing gas,” said Combs. “These models traditionally have been entirely separate but this technology now creates a meaningful opportunity for two companies to partner and share mutual benefit.”
The integration of LNG processing as part of an NGL plant offers an economic benefit that previously wasn’t thought possible. The win-win is that not only does the LNG company get its product, but the midstream processor also gets added efficiency from increased throughput and recovery rates. This scenario could happen under the roof of a single company, but it also might be attractive for two separate companies to collaborate.

Jody Black is vice president of sales for Linde Process Plants Inc.