Profitability of U.S. NGL Extraction

Natural gas liquids (NGL's) are a significant source of hydrocarbon production in the U.S. NGL's are extracted from produced natural gas, and their volume depends on the levels of oil and gas production. For NGL extraction to be economically viable, however, the sales price of the NGL product must exceed the cost of extraction. This paper reviews factors that affect NGL extraction economics and addresses the effects of petrochemical demand, imports of liquefied petroleum gas (LPG), and vapor-pressure limitations on motor gasoline.