Once that gas comes out of the ground, it is not ready for immediate consumption. It must be processed first and, right now, there are several cryogenic processing plants currently under construction or in the planning stages in Karnes, Bee and Goliad counties.
What comes out of the ground is a mixture of natural gas liquids (NGL) that is placed into pipelines for transportation to one of the many cryogenic processing plants that seem to be popping up in every county.
NGL is made up of primarily ethane, propane, butane, methane, sulfur and natural gas. The NGL has to be separated into the liquid portion (ethane, propane, butane, methane, sulfur) and the gas portion to be the most valuable and versatile in the marketplace. The separation of the liquids is the process that takes place at the cryogenic processing plants.
Energy Transfer in Karnes
One such plant is currently under construction in Karnes County. The plant, operated by Energy Transfer, is expected to come online during the fourth quarter of the year.
According to Ryan Coffey, executive vice president of Energy Transfer Partners, the plant – when fully operational – will process 200 million cubic feet per day.
“It (separation process) is done by cooling the gas,” Coffey said. “As you cool that gas down, they (molecules) start liquefying and falling out. What you have left is pure methane gas.”
The gas temperature is dropped from approximately 65 degrees to negative 150 degrees during the separation process. There are a number of ways the gas can be cooled. One of the ways in which the temperature is changed is by dropping the pressure, Coffey said. The cooling of the gas allows the heavy gases to just fall out.
The heavy gases are referred to as a Y-grade mix with the industry.
“We will pipeline that to a fractionation facility,” Coffey said.
The other product that comes out of the cryogenic process is the methane gas (main component of natural gas), and it is piped somewhere else.
“The cryogenic processing plant is the most efficient technology we have today,” Coffey said.
Caliche pads and pipe racks
The plant currently under construction will sit on roughly 325 acres of land. The plant itself will only take up a small portion of the total acreage.
“We will use some of the property as a buffer,” Coffey said.
Driving down the county road where the plant is under construction, one would see a leveled pad covered in caliche and the beginning forms of what will be pipe racks when it is all said and done.
On the land adjacent to the caliche pad sit pieces of the plant. It is a modular plant that is manufactured in Oklahoma and shipped down in pieces. It will be set on skids or slabs and assembled on site.
Once complete, it will resemble a small silver city with columns rising into the sky and a snaking of pipes that move the fluid from one part of the city to another.
The cryogenic process is a very important step in getting to the final product.
“It is worth more (at market) to be broken out,” Coffey said.
Second plant to come online
When the plant comes online later this year, it will be the second cryogenic plant that the company has in operation. There is already a plant operating in La Grange, and a third plant is in the works in Jackson County.
The Jackson County facility will be the company’s largest – at 800 million cubic feet per day. That plant will be brought online in phases as the need for processing capacity rises.
While there are already people employed at the Kenedy site, there will be additional hires when the plant is complete.
“What we have right now for Kenedy is 10 permanent positions, but they may not all come online on day one,” Coffey said.
Energy Transfer Partners has a preference of hiring local employees and has had good luck in doing so. The company purchased a smaller company already located in South Texas more than five years ago, and with that firm came a local workforce that has stayed with the company. The hope is to continue that with the new plant.
“We really do like to try and hire local people,” Coffey said.
TEAK plant near Tuleta
While the Energy Transfer plant is not coming online until later this year, TEAK Midstream has a plant in Bee County near Tuleta that will be commencing operations by the beginning of August and should be fully operational by Sept. 1 of this year.
The plant has processing capabilities of 200 million cubic feet per day, the same as the Energy Transfer plant. Along with the construction of the plant will be over 160 miles of gathering lines, bringing the gas from the well head to the plant to be processed.
Chris Aulds, co-chief executive officer of TEAK Midstream, said the company chose the location near Tuleta because it already had a field office in Pettus.
“We saw this as an opportunity to expand our footprint in the Eagle Ford Shale,” he said. “This site is very complementary to the operations we already had in place.”
Many positive returns
He feels his company and the energy industry as a whole are having a positive impact on Bee County and the surrounding counties.
According to Aulds, the building of the plant will bring in approximately $325,000 per year in tax revenue for Bee County, $100,000 for Karnes County, $150,000 for Refugio County, $200,000 for Live Oak County, $180,000 in McMullen County and $220,000 for LaSalle County.
He pointed out that not only does the plant bring in tax revenue for the counties but the workers also frequent local restaurants and retail shops around the area and utilize local businesses, such as Pettus Oilfield Supply, when possible.
His company, like Energy Transfer, also tries to hire from the local labor force. The plant has hired 16 employees this far and all have been from South Texas counties.
With all the good the plant brings, Aulds has not denied there will be some inconveniences.
“It goes without saying it will cause an increase in traffic in the immediate area,” he said. “However our plant will have a much greater positive impact in the area to offset the inconvenience of the increased traffic.”
DCP plant in Goliad
DCP Midstream has purchased 300 plus acres for a cryogenic processing plant that it will build in Goliad County. That plant has not started construction yet because the company is currently in negotiation for a tax abatement from the county.
Why the need for four plants in a 40-mile radius? Companies don’t like to share.
“That is typically not the preferred way of doing business,” Coffey said. “We only do it if it makes financial sense.”
The plants will each get their gas from separate transport pipelines; it will be processed and then placed again into a different transport line to go on to the next location.
With the current Eagle Ford Shale boom, there seems to be enough of gas to go around for everyone and every company to have its own processing plant so be on the lookout as more plants sprout up along the horizon.