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EIA: Gas Reserves Growth Drives Processing Additions

Natural gas processing capacity in the United States grew 9% between 1995 and 2004 to 60,533 MMcf/d, but further increases in processing likely will be needed in regions of gas reserves growth, such as the Rockies, while decreases probably will be seen in the Louisiana Gulf Coast region, the Energy Information Administration (EIA) said in a new report titled "Natural Gas Processing: the Crucial Link between Natural Gas Production and Its Transportation to Market."

Colorado, Utah and Wyoming each experienced a 25% or greater increase in installed natural gas processing plant capacity over the past decade, EIA said. Seven new gas processing plants were built in Wyoming, where processing capacity increased 46%, or 2.2 Bcf/d, since 1995. A large portion of that increase came from two expansions of Williams' Opal, WY, plant to serve pipeline expansions on Kern River Gas Transmission and Northwest Pipeline and are due to gas production growth in the Green River Basin. Over the nine years from 1995 to 2004, gas reserves in Wyoming grew by 46%, or 10,928 Bcf.

Exploration and production growth in the Piceance Basin and increased production in the San Juan Basin in Colorado contributed to the installation of 13 new or replacement processing plants and the expansion of several existing plants. Colorado's gas reserves over that period grew by 50%, or 7,657 Bcf.

"It is generally anticipated that the Uinta Basin of eastern Utah and the Piceance Basin of western Colorado will become more actively developed over the next decade, with several new large-scale capacity natural gas pipelines scheduled to be installed" to bring Rockies gas to the Midwest and Northeast, EIA said. As a result of these new pipelines, new processing will need to be installed to treat the gas prior to receipt.

New processing also could be needed in North Texas to serve growing Barnett Shale reserves, EIA said. Despite a 13% drop in processing capacity in Texas since 1995 mainly due to reserves decreases in the Permian Basin, several new plants were added in the Fort Worth Basin where gas reserves from 1995 to 2004 jumped by 74%, or 8,347 Bcf, EIA said. With new technologies and high gas prices, the gas shales that previously were considered uneconomical to produce in North and East Texas are experiencing rapid reserves growth.

Meanwhile, in southern Louisiana and the Gulf of Mexico, there has been a sharp decline in gas reserves and that is expected to continue, unless there are some major deepwater finds, EIA noted. No new major offshore-to-onshore pipelines have been planned. As a result, EIA predicts that processing capacity factors on the Louisiana Gulf Coast will continue to fall. Gas reserves in the federal offshore Gulf of Mexico plummeted 50%, or 8,941 Bcf, over the 1995-2004 period.

The agency tallies 530 gas processing plants nationwide, with the greatest concentration in Louisiana (61) and Texas (166). Louisiana has 16.5 Bcf/d of processing capacity, while Texas has 15.8 Bcf/d. While the number of plants in the United States have dropped 27% since 1995, processing capacity has risen 9% because of the addition of larger plants by midstream operators and the shut down of other smaller plants. For more details on gas processing, go to

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