NGL2010 Free

NaturalGasLiquids
SupplyOutlook20082015

OilIndustryandMarketsDivision
April2010
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 S UMMARY
Summary
GlobalNaturalGasLiquids(NGL)productionisforecasttogrowbynet3.3mb/dfrom2008to2015,with
2.9mb/dofthegrowthcomingfromOPECand0.4mb/dfromnonOPECcountries.Globalincremental
NGLproductionthereforerepresentsasubstantialcontributiontototalgloballiquidsgrowth.According
tothelastmediumtermmarketupdateinDecember2009,netadditionsof3.1mb/dofNGLsmakeup
60%oftotal liquidsgrowthfrom2008 to2014,as illustrated inthegraph,whereOPECcrudecapacity
grows by 2.3mb/d, nonconventional nonOPEC liquids grow by 1.4mb/d and nonOPEC conventional
crude decline by 1.4mb/d. Most of the NGL growth stems from OPEC countries, notably Qatar, Iran,
SaudiArabiatheUAEandNigeria.OutsideofOPEC,RussiaandKazakhstanwillalsoseestronggrowth.
The level of expected growth in NGL supply has important Components of Global Liquids
implications for the global oil refining sector, since NGLs mb/d Growth 2008-2014
6
fromgasprocessingplantswillpotentiallydisplacerefinery
sourcedLPGornaphtha,whilerisingcondensatesupplywill 4
impact upon the quality of the refinery crude feedstock
slate. Condensates can be spiked into a crude oil stream, 2
effectivelylighteningandsweeteningcrudesupplyandthey
0
alsohaveanimportantapplicationinactingasadiluentfor
heavy,viscousbitumenandheavyoilexportstreams.More -2
work is necessary to assess the impact on condensate OPEC* Non_OPEC Total
demand and crudetrade ofthatparticular application.The Crude NGL Non-conv
development of dedicated condensate splitting capacity to *OPECcrudeiscapacityadditions
distil petroleum products directly from condensate outside
oftheconventionalrefiningsectorisanothertrendwhichbearsfurtheranalysis.
AnimportantfindingofthisreviewhasbeenthatNGLoutputovertheforecastperiodincreasesatarate
of4.0%,whilethemarketednaturalgasproductionincreasesbyonly1.2%.Asaconsequencetheliquids
ratio (measured as NGLs inkb/d over dry gas in kboe/d) over the forecast period rises from 19.2% in
2008 to 23.3% in 2012, remaining at that level until 2015. How come that the natural gas apparently
becomes more liquidsprone over 20082012? The report identifies four trends that will have a
significantimpactonliquidsfromgasglobally.ThefirstthreetrendsdriveincreasingNGLsupply,while
thelasthasanegativeimpactonproductionlevels.Allfourareexaminedindetailformainregionsand
countries:
1. Theincreasingscaleofnaturalgasdevelopments;
2. Increasedutilisationofassociatedgas;
3. Wetter nonassociated gas gradually replacing traditional dry, nonassociated gas in some
countries,amongotherreasonsduetodevelopmentofdeeperreservoirswithhighpressureand
temperature;
4. The increasing replacement of wet associated gas by dry nonassociated gas in some other
countries.
Thetrendofincreasedutilisationofnaturalgasistoalargeextentaresultofmeasurestocutflaringof
associated gas. The World Bank estimates that 140bcm of natural gas was flared worldwide in 2008.
Assuming that this natural gas had the average liquids ratio of 19.2%, this would imply that almost
0.5mb/dofNGLsarebeingflaredtogetherwiththatgas.Sinceitisassociatedgasthatisbeingflared,
thevolumeisprobablyhigher.Measurestoreduceflaringofassociatedgasarebehindasubstantialpart
oftheincreasedNGLproductioninRussia,NigeriaandAngola.NGLsareoftendevelopedasapartofa
large scale gas development aimed at exports, but liquids from smallerscale developments aimed at
flaring reduction also hold the potential to substantially boost local consumption of LPG. In emerging

2
economies,domesticsectoruseofLPGrepresentsalogicalearlystepawayfromrelianceontraditional
biomass fuels and enjoys the initial benefit of acting as a bridge before more costly natural gas
distributioninfrastructureisdeveloped.
Large gas condensate deposits have been targeted for development by IOCs over recent years, and
liquids in gas reservoirs have been developed relatively earlier than drier gas deposits as a way of
maximising early project returns. The development of drier gas is a trend that will likely grow in
importanceinthelongerterm,althoughwithlessrevenuefromassociatedliquids,thiswillrequirethe
pricingofnaturalgastobetterreflectmarginalproductioncosts.
Despite a substantial reworking of individual country data and projections, the aggregate result is a
relatively minor 216kb/d downward revision of the previous average MTOMR global gas liquids
production estimates for the period 20082014 (all these comparisons are in relation to the MTOMR
publishedinJune2009).DownwardadjustmentstoOPECforecastoutputaveraged339kb/d,thusmore
thanoffsettinganupwardadjustmentof+123kb/dtononOPEC.Inpart,theserevisionsstemmedfrom
a reassessed historical baseline production level. But in many cases, this reappraisal also resulted in a
different trend for expected future production. Noteworthy changes to individual countries include
Russia, where a higher baseline and more optimistic outlook have resulted in a substantially higher
forecast production. Conversely, the outlook for the US, Canada and several key OPEC countries
includingSaudiArabia,Kuwait,AlgeriaandNigeria,werereviseddown.
Thisreviewrevealsinconsistenciesinreporteddata,whichmakeanassessmentofgloballiquidssupply
difficult,andpresentsspecificrecommendationsforbetterdefinitionsandreportingstandardsforNGLs,
amongothersfordatagatheringandreportingforgasplantNGLsandfieldcondensateseparatelyandto
establishGTLasaseparatecategory.
The recent rapid development of nonconventional gas deposits in North America and elsewhere has
fundamentally changed perceptions for global gas supply over the next decade. Although such
unconventional sources of gas supply tend to be drier than their conventional counterparts, liquids
contentvarieswidely,solongertermNGLsupplyprojectionsneedtocaptureinbetterdetailthelikely
associated liquids potential should large scale development of nonconventional gas deposits continue
apace. While NGL and condensate development has implications that are most apparent for the
midstreamanddownstreamoilmarkets,itcouldalsohelppostponewhatisseenbysomeanalystsasan
inevitableglobaloilsupplycrunchinthemediumterm.Ourownmediumtermmarketanalysisalready
highlights that several future scenarios are possible, depending upon economic growth and oil use
efficiency assumptions. NGLs, together with nonconventional oil supplies, and potentially rejuvenated
OPECcrudecapacitygrowthfromcountriessuchasIraq,couldalsohelpchangebroaderperceptionson
theoilsupplysideinthecomingdecade.
Contentandscopeofreport
NGLs make up a substantial component of global oil supply, yet are often underreported or
misrepresented in global oil balances. With the generous support of a voluntary contribution from
NorwaysMinistryofPetroleumandEnergy,theOilIndustryandMarketsDivision(OIMD)hasbeenable
toreviewitsexistingdatasourcesandmethodologyandtotakeamoresystematiclookatprospectsfor
globalNGLsupplyinthecontextofevolvingnaturalgasproductionandliquidsextractioncapability.This
reportaimsto:
GiveanindepthreviewofcondensateandotherNGLdataandforecastsbytheOIMD;
Clarify the terms and definitions for NGLs used by the IEAs Oil Market Report (OMR) and
MediumTermOilMarketReport(MTOMR)andIEAstatisticsandpublicationsingeneral;

3
HighlightissuesconcerningdataqualityonNGLproductionanduse;
ImprovetheNGLsupplyreportingandforecastsintheOMRandMTOMR,providinga20082015
supplyforecastandanalysisofimplicationsforthemarket.
To this end, after setting out definitions and methodology, this report reviews the NGL data currently
includedintheOMR/MTOMR.Thisreportaimstoraiseawarenessofexistinginconsistenciesinreporting
of crude, condensate and other NGLs and, by suggesting common definitions, to encourage more
consistentreportingpractices.
Toprovideanupdatedsupplyforecast,thisreporttookaccountofexistingdataandinformationsources,
includingofficialdatasubmittedtotheIEAbymembercountries,butalsoanupdatedIEAgasproduction
forecastalignedtothatcontainedintheWorldEnergyOutlook2009,andothermarketintelligence.The
report also undertook an analysis ofthe midstream, attemptingtogauge NGLcapacitiesby examining
gasprocessingfacilitycapacity.
Futurework
It will be important to sustain the analytical capability within OIMD which allowed production of this
report.WhilethemajorityoftheworkonthisstudywasundertakenbyasecondeefromStatoil,itwillbe
importanttoensurethattheindepthmonitoringofgassuppliesandgasliquidsextractioncapabilityis
continued.TheVCwhichenabledthisreportsproductionfacilitatedsubscriptiontoseveralnewmarket
intelligence sources, and resources will need to be dedicated to ensuring that OIMD can continue to
accessthesesources.
Thedisparatenatureofsourcesoffuturegassupplygrowth,withvariablegasliquidscontentsuggests
that more detailed work on sources and characteristics of future gas supplies is required. Greater
disaggregation between associated and nonassociated gas supplies, and distinction between
conventional and nonconventional gas, plus segregated reporting of nonconventional gas production
bytypewouldallhelpaddgranularitytoNGLsupplyforecastsinfuture.
ConsiderationneedstobegiventothesegregatedreportingofgasplantNGLsandgascondensateinIEA
andJODIdata.Similarly,nationalstatisticsshouldmoreclearlydefineandseparate,wherepossible,the
volumes of gas condensate that are included in reported crude oil supply. Inevitably, it will remain
difficult to accurately capture volumes of spiked condensate, where these volumes are blended with
crude oil. However, when gas condensate is processed or sold separately, it should wherever possible
alsobereportedseparately.
Greaterstudyoftheimplicationsofhighercondensatevolumeswithintheglobalrefineryfeedstockslate
foroilproductssupplyshouldbeundertaken.Thisneedstobetiedinwithdeeperanalysisofchanging
regional/global feedstock slates in general, and the currently prevalent analytical perception that
mediumgravity/sulphurfeedstocksarebeingsupplantedbylighter/sweetergradesatoneend,andby
heavier/sourergradesattheother.
Changing gas liquids plant availability will also have major implications for global/regional oil products
markets,notablyfornaphthaandrefinerysourcedLPG,andforthepetrochemicalsectorinparticular.
Integrating more fully OIMDs oilproduct demandanalysis,with itsrefinery supply analysis to capture
changeswithinthepetrochemicalsectorwouldbeavaluableadditiontomarketunderstanding.

4
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 T ABLEOF C ONTENTS
TableofContents
Summary........................................................................................................................................................2
TableofContents..........................................................................................................................................5
1 Definitions.............................................................................................................................................8
1.1 ComponentpartsofOMRNGLdata..............................................................................................8
1.2 NaturalGasLiquidsandtheGasValueChain.............................................................................11
1.3 IscondensateaNaturalGasLiquid?...........................................................................................13
1.4 NGLsandgasprocessing.............................................................................................................13
1.5 Characteristicsof,andmarketsfor,NGLs...................................................................................15
1.6 Evaluatingmidstreaminvestments.............................................................................................16
2 Methodology.......................................................................................................................................18
2.1 Baselinerevision..........................................................................................................................18
2.2 Amidstreamapproach................................................................................................................18
2.3 Alignmentwithnaturalgasforecasts..........................................................................................19
2.4 Assessmentoftrendsinliquidcontentofgas............................................................................20
2.5 Selectionofcountriestobeincludedinthestudy......................................................................21
3 TrendsinNGLproductionthatimpactNGLsupply.............................................................................22
4 GlobalNGLsupplyoutlook..................................................................................................................24
4.1 OPEC............................................................................................................................................27
4.2 NonOPEC.....................................................................................................................................27
5 Regionalandcountrybycountryoutlookandanalysis......................................................................28
5.1 NorthAmerica.............................................................................................................................28
5.1.1 USA...............................................................................................................................29
5.1.2 Canada..........................................................................................................................32
5.1.3 Mexico..........................................................................................................................34

5
5.2 Eurasia.........................................................................................................................................36
5.2.1 Norway.........................................................................................................................37
5.2.2 Denmark.......................................................................................................................39
5.2.3 UK.................................................................................................................................40
5.2.4 Netherlands..................................................................................................................42
5.3 RussiaandtheCaspianregion.....................................................................................................42
5.3.1 Russia............................................................................................................................43
5.3.2 Kazakhstan....................................................................................................................46
5.3.3 Azerbaijan.....................................................................................................................47
5.3.4 Turkmenistan................................................................................................................48
5.3.5 Uzbekistan....................................................................................................................50
5.4 LatinAmerica...............................................................................................................................50
5.4.1 Argentina......................................................................................................................51
5.4.2 Venezuela.....................................................................................................................52
5.4.3 Trinidad&Tobago........................................................................................................53
5.4.4 Bolivia...........................................................................................................................53
5.4.5 Brazil.............................................................................................................................54
5.4.6 Peru..............................................................................................................................55
5.4.7 Ecuador.........................................................................................................................56
5.5 AsiaPacific...................................................................................................................................56
5.5.1 Indonesia......................................................................................................................57
5.5.2 Malaysia........................................................................................................................58
5.5.3 Thailand........................................................................................................................58
5.5.4 India..............................................................................................................................59
5.5.5 China.............................................................................................................................60
5.5.6 Australia........................................................................................................................61
5.6 MiddleEast..................................................................................................................................63
5.6.1 SaudiArabia..................................................................................................................64

6
5.6.2 Qatar.............................................................................................................................66
5.6.3 Iran................................................................................................................................68
5.6.4 Oman............................................................................................................................70
5.6.5 UnitedArabEmirates(UAE).........................................................................................72
5.6.6 Kuwait...........................................................................................................................73
5.6.7 Syria..............................................................................................................................74
5.6.8 Bahrain..........................................................................................................................75
5.6.9 Iraq................................................................................................................................75
5.6.10 Yemen...........................................................................................................................77
5.7 Africa............................................................................................................................................78
5.7.1 Egypt.............................................................................................................................79
5.7.2 Tunisia...........................................................................................................................80
5.7.3 Libya..............................................................................................................................81
5.7.4 Algeria...........................................................................................................................82
5.7.6 Nigeria..........................................................................................................................84
5.7.7 Angola...........................................................................................................................86
5.7.8 EquatorialGuinea.........................................................................................................86
6 Glossary...............................................................................................................................................88
7 Sources................................................................................................................................................94

7
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 D EFINITIONS
1 Definitions
1.1 ComponentpartsofOMRNGLdata
Natural gas liquids (NGLs) are light hydrocarbons that are dissolved in associated or nonassociated
natural gas in a hydrocarbon reservoir, and are produced within a gas stream. They comprise ethane,
propane,butaneandisobutene(collectivelyLPG),pentaneplusandgascondensate,i.e.moleculeswith
28carbonatoms(C2H6C8H18).Abovethegroundtherichgasstreamisunstable,asheaviercomponents
will condense,while lighter componentsnormally remain gaseous, and willhavetobe separated from
thedrygasinagasprocessingplant(GPP).Hence,therearetwocategoriesofNGLscondensateand
otherNGLs.AscondensatehasmanycharacteristicsthatmakeitdifferentfromotherNGLs,itisusefulto
distinguishbetweenthetwo.
Many companies and oil producers report NGLs together with other kinds of other oil, that may
includeGastoLiquids(GTL),minedsyntheticcrudesorbiofuels.Thisreviewisrestrictedtocondensate
andotherNGLs,andexcludesallkindsofotheroil.WhenwesaythatNGLswillcomefromaGTLproject,
werefertothevolumesofNGLsthatareextractedfromarichgasstreamtoprepareadrygasstream
thatwillsubsequentlybeprocessedtoproduceGTL,comparabletotheNGLsthatcomeoutofanLNG
project, which are the NGLs that are extracted from the rich gas to prepare the dry gas that is
subsequentlyliquefied.
Field(orlease)condensateisastableliquidconsistingofhydrocarbonsofC5+whichisseparatedfrom
therichgasstreamatthefieldprocessingcentre.Itsharesmanyofthecharacteristicsofalightcrudeoil
withAPIgravityabove50andcanbetransportedlikecrudeoil.NGLsotherthanfieldcondensateare
thecomponentsthataresplitoutfromtherichgasstreaminagasprocessingplant(GPP),andcanbe
fractionatedintogasplantethane,propane,butane,isobutane,pentaneandnaphtha(orpentanesplus),
aswellasgasplantcondensate.BecausethesecomponentsareextractedataGPPwemayrefertothem
as gas plant liquids. Condensate and other natural gas liquids differ in the way they are extracted,
reported,transported,storedandmarketed.Notethatcondensatemaybeextractedatthefieldorata
gasprocessingplant.This willoften influencehow it is reported. We oftentalk aboutcondensate and
otherNGLs.Inthatcasebothfieldcondensateandgasplantcondensateisincludedinthecondensate
concept,whileothergasplantliquidsareincludedwiththetermotherNGLs.Notethatethaneisnot
always extracted from the gas stream, but will often partly be left in the dry gas, as might also minor
elementsofLPG.Inthatcaseethaneandotherheaviercomponentsarecountedtogetherwithdrygas
andnottogetherwithNGLs,i.e.onlyseparatedliquidsareincludedinourNGLconcept.
For OPEC countries the OMR reports all condensate and other NGLs separately from crude oil, partly
stemming from the practice of OPEC producers to set production targets for crude oil, excluding
condensateandotherNGLs.
FornonOPECcountriesOMRNGLestimatesgenerallyincludeonlygasplantNGLs.Forsomecountries
field condensates are included as well, according to the way the condensate and other NGLs are
reported by official sources. Often condensate production volumes are reported together with other
crudeoilvolumesifthecondensateinquestionisfieldcondensatethatisblended(spiked)intocrudeoil
and transported as a blend, however some countries report condensates separately even though it is
transportedtogetherwithcrudeoil.Thetablebelowshowstowhichextentwereportcondensateinour
NGL figures for nonOPEC countries. For many countries we are not certain whether the reported
condensate is only gas plant condensate, or if it includes some field condensate as well. All the
condensatevolumesfornonOPECthatwehaveidentified,butthatwedonotincludewithinourOMR
figure,arefieldcondensate.

8
ItisimportanttobeawareofthisinconsistencywhencomparingreportedNGLproductionandtheratios
ofNGLtogasproduction(thesocalledliquidsratio)amongcountries.ForexampletheNGLforecastfor
SaudiArabiain2015is1.8mb/d,whiletheforecastfortheUSAis1.7mb/d.However,theNGLfigurefor
theUSAdoesnotincludefieldcondensate,whichisincludedincrudeoilvolumes,whileforSaudiArabia
thereportedlevelaimstoincludeanestimateofallcondensatewithintheNGLfigure.
2008 NGL production by category and reporting practice

(thousand barrels per day)
Estimate of Total NGL including
% of total NGL
Total OMR NGL % of OMR figure condensate estimate of
Condensate Other NGLs estimate that is
figure that is condensate included in OMR condensate reported
condensate
crude oil with crude oil
Non-OPEC
OECD Netherlands 9 9 0% 9 0%
Norway 251 275 527 48% 527 48%
United Kingdom 37 179 215 17% 215 17%
Canada 30 669 699 4% 699 4%
Mexico 365 365 0% 54 419 13%
United States 1,781 1,781 0% 470 2,251 21%
Australia 74 74 0% 140 214 65%
Africa Egypt 135 70 206 66% 206 66%
Equatorial Guinea 48 17 65 73% 65 73%
Tunisia 2 2 0% 6 8 76%
Asia China - 100 100 100%
India 113 113 0% 45 158 29%
Indonesia 115 31 146 79% 146 79%
Malaysia 65 65 0% 100 165 61%
Thailand 85 85 170 50% 170 50%
Latin America Argentina 125 125 0% 125 0%
Bolivia 7 7 0% 7 0%
Brazil 86 86 0% 86 0%
Peru - 43 43 0% 43 0%
Trinidad & Tobago 38 38 0% 38 0%
Middle East Bahrain 10 10 0% 10 0%
Oman 80 3 83 96% 83 96%
Syria 35 35 0% 35 0%
Yemen 18 18 0% 18 0%
FSU Azerbaijan 41 1 42 98% 42 98%
Kazakhstan 271 34 305 89% 305 89%
Russia 356 180 536 66% 536 66%
Turkmenistan 2 5 7 30% 7 30%
Uzbekistan 53 7 59 89% 59 89%
Countries not included in the study 247 247 - 247
Total non-OPEC 1,502 4,575 6,077 25% 915 6,992 35%

9
World Supply of Condensate and other NGLs 2008-2015

Compounded
2008 2009 2010 2011 2012 2013 2014 2015 2008-2015 annual growth
Non-OPEC
OECD North America 2,846 2,911 2,802 2,762 2,744 2,726 2,708 2,691 (154) -1%
OECD Europe 767 737 735 728 733 720 705 692 (76) -1%
OECD Pacific 91 95 100 104 108 111 116 120 29 4%
Total OECD 3,704 3,743 3,637 3,594 3,584 3,557 3,529 3,503 (201) -1%
FSU 975 1,049 1,084 1,180 1,289 1,316 1,344 1,380 406 5%
Non-OECD Europe 15 15 14 14 13 12 10 9 (6) -6%
Asia 647 660 692 714 759 793 797 792 145 3%
Africa 282 283 280 280 283 285 288 291 9 0%
Middle East 146 160 175 178 178 179 181 183 36 3%
Latin America 308 326 328 335 343 351 360 369 61 3%
Total non-OECD 2,373 2,492 2,573 2,701 2,866 2,937 2,981 3,023 650 4%
Total non-OPEC 6,077 6,236 6,210 6,295 6,449 6,494 6,510 6,526 449 1%
OPEC
Middle East OPEC 3,202 3,305 3,964 4,716 4,997 5,231 5,402 5,534 2,332 8%
Other OPEC 1,126 1,277 1,428 1,487 1,558 1,594 1,658 1,671 545 6%
Total OPEC 4,328 4,582 5,392 6,203 6,555 6,825 7,060 7,205 2,876 8%
Total World Condensate
and other NGLs 10,405 10,818 11,602 12,498 13,005 13,320 13,570 13,731 3,326 4%
World Supply of Condensate and other NGLs revisions compared to MTOMR June 2009
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Non-OPEC 0 0 0 0 0 0 0 0 0 0 0
OECD North America - - 1 27 24 54 (76) (158) (218) (283) (349)
OECD Europe (6) (8) (14) (2) (11) (3) 19 41 68 82 92
OECD Pacific - - 0 - - 2 (4) (15) (16) (17) (17)
Total OECD (6) (8) (12) 25 13 53 (62) (132) (166) (218) (275)
FSU 84 82 79 83 102 199 201 183 281 310 339
Non-OECD Europe - - - - - - - 1 1 1 1
Asia (16) (9) (24) (28) (28) (37) (27) (12) (27) 1 10
Africa 18 40 31 36 34 27 16 11 8 5 1
Middle East (0) (5) (7) (6) (1) 8 18 20 20 18 16
Latin America 30 30 21 12 13 9 (7) (19) (20) (17) (12)
Total non-OECD 115 137 100 96 121 206 201 184 263 318 355
Total non-OPEC 109 130 88 121 134 259 139 52 98 100 80
OPEC - - - - - - - - - - -
Middle East OPEC (13) 15 40 33 46 (228) (353) (185) (174) (95) (114)
Other OPEC (210) (244) (291) (323) (338) (321) (237) (143) (84) (87) (61)
Total OPEC (223) (230) (251) (290) (292) (550) (590) (329) (258) (183) (175)
Condensate and other
NGLs (114) (100) (163) (169) (158) (291) (451) (276) (161) (83) (95)

10
1.2 NaturalGasLiquidsandtheGasValueChain
ThetermNaturalGasLiquids(NGLs)isconfusing,andthemanydifferentdefinitionsusedarereflectedin
the wide variance in the way NGL figures are reported across sources. For the sake of precision, it is
necessary to take one step back and reflect over the value chain of NGL from the well to the market.
HowareNGLsproduced,wheredotheygoandhowdotheyendupaspetroleumproducts?Withinthe
country by country analysis section of this report, real life NGL value chains across the globe are
described.
Allwordsinboldinthissectionaredefinedinsection6Glossary.
Gasgatheringfromwellstreamtoprocessingplantan
Considering an oil well with associated natural illustrativeexample
gas production, or a nonassociated natural gas
welllocatedatafield,inanonshoreoroffshore InthecaseoftheStatfjordSatellitesontheNorwegian
basin in a producing country, the hydrocarbons ContinentalShelf,thewellstreamsfromthethreesatellite
that flow from the well are an unstable mix of fieldsStatfjordNord,StatfjordstandSygna,allofthem
developedviasubseatemplates,arefedtotheinlet
various hydrocarbon molecules, some of which
separatoroftheStatfjordCplatformtogetherwithoutput
would vaporise and create pollution, a security
fromtheStatfjordfielditself.
hazard and a loss of potential income if simply
ventedintotheatmosphere.Oftenwellstreams
also contain water or other nonhydrocarbon
elements that in some instances need to be
removed before the well stream can be
transported away from the field. Streams from
several wells will be led into separators at the
field,orwellstreamswillbegatheredfrommany
fields and transported into a central processing
facility.
A field processing centre can vary in

sophistication, and the need for processing will Source:NorwegianPetroleumDirectorate
depend on the composition of the hydrocarbon Atthefieldprocessingfacilityattheplatformoil,gasand

stream. Mostly, the processing facility will split waterareseparated.Wateriscleansedandpumpedback
thewellstreamintowater,stableliquidsandrich intothesea,oilisstoredattheplatformandloadedonto
gas, and connect with further transportation shuttletankers,whiletherichgasisgatheredtogetherwith
richgasstreamsofmanyNorthSeafieldsandfedviathe
solutions. A rich gas stream is a stream of
trunklineStatpipetothenaturalgasprocessingplant
hydrocarbon molecules, each with one to eight
onshoreatKrstorthroughFLAGStoStFergus.Herethe
carbon atoms that exist in a gaseous state at
richgasissplitintodrysalesgasthatissoldonthe
underground pressures, but where some of the Europeangasmarket,whiletheNGLsarefractionatedinto
hydrocarbonsmightcondense,i.e.becomeliquid ethane,LPGandcondensateandsoldontheglobalmarket.
at atmospheric pressure, hence the term
condensate.
The liquids may be transported relatively easily, directly from the field, on shuttle tankers, in oil
pipelines, on rail car or by other economic routes. The liquids from the well are said to be stable
becausethecomponentsintheliquidarepracticallyallliquidunderatmosphericpressureandprevailing
surface temperatures. In molecular terms this means hydrocarbons of the type pentanes and higher
(C5+).Pentanesaremoleculeswithfivecarbonatomssurroundedbyhydrogenatoms.Themorecarbon
atomsahydrocarbonmoleculehas,theheavieritis.Theheavinessordensityofaliquidorthegravity
oftheliquidsismeasuredbyAPIgravity.AsAPIgravityis inverselyproportionaltothespecificgravity
(SG),thehighertheAPIgravitynumber,thelightertheliquid.BasicallyAPIgravityisameasureofhow
heavyagivenvolumeofthisliquidiscomparedtothesamevolumeofwater,andiscalculatedbythe

11
formulaAPIgravity=(141.5/SG)131.5.AcondensatewithanAPIgravityof50hasaspecificgravityof
0.78,i.e.alitreofcondensatewillweighnotmorethan0.78kilogram.
A liquid with an API gravity of 50 API or higher, can be characterised as a condensate. Condensate
recovered at field level does not differ much from other crude oil seen from a processing and
transportationperspective,andisreferredtoasfieldcondensate.Fieldcondensateisthesameaslease
(or licence) condensate. A company or country will often report the volumes of field condensate
together with other crude oil. The condensate will often be blended into other crude oil, frequently
enhancing the quality of the blend for refiners. In such cases the condensate is known as spiked
condensate. Alternatively, the field condensate might be transported as segregated condensate and
sold to purposebuilt condensate splitters, petrochemical facilities, or used for dilutionof bitumen, a
technologythatfacilitatesthepipelinetransportationofotherwisehighlyviscousoils.
Unlikecrudeoilandfield condensate, a rich,orwet, gas streamwill alwaysrequiretransportation in

pipelines, and therefore more investment in infrastructure. If no such infrastructure exists, associated
gas streams are sometimes reinjected to the reservoir, flared or vented. Where it exists, pipeline
infrastructurewillleadtoagasprocessingplantwherethestreamwillbesplitintodrygasandnatural
gasliquids.FromanNGLperspective,thisprocessisreferredtoasNGLextraction.Ideallyitwouldbe
besttoreport thevolume ofNGLsproducedatthe verypoint ofextraction, as this isthe pointinthe
value chain where the NGLs exist as a discrete entity. At this point of the value chain the NGLs are
comparable to crude oil or condensate; a raw material ready for processing into petroleum products.
Whiletheprocessingintopetroleumproductsofcondensateisreferredtoascondensatesplitting,and
forcrudeoilisreferredtoasrefining,fortheNGLstheprocessingintopetroleumproductsisreferredto
asfractionation.
The naturalgasthat isnow stripped ofNGLs is referred to as drygasand consists mainly ofmethane
(CH4).Somenonassociatedgasisalreadydrywhenitcomesoutofthewell,asthestreamcontainslittle
morethanmethane.Thedrygasmightneedfurtherprocessingorpurificationinordertomeetthesales
gasspecificationinamarket.Thesalesgashastobetransportedfurthertomarketsinpipelinesorbe
liquefied by cooling to liquefied natural gas (LNG) to enable transportation on LNG tanker vessels.
Natural gas might also be transported as Compressed Natural Gas (CNG). Dry gas might also be
transporteddirectlyfromthenaturalgasprocessingplanttoamethanolfactory,apetrochemicalfacility
or a nearby gas power plant. This means that the dry gas often requires further investments in
infrastructure in order to be monetised. Depending on the volumes produced and the proximity to
marketsthemarketingofdrygasmightormightnotbedeemedeconomicallyviable.Thereforethedry
gas is sometimes at this point reinjected into the reservoir or to another oil reservoir to support the
reservoirpressuretoincreasetherecoveryrateforoil.Insomeinstancesthegasisalsoflared.
NGLsarenormallyextractedfromarichgasprimarilytoobtainadrygasthatmeetssalesgascriteria,
but also for the purpose of monetising the valuable heavier components in a rich gas stream. An NGL
fractionationplantmaybeintegratedwithanNGLextractionplant.TheNGLmaybeextractedatvarious
field centres and gathered via long NGL pipelines to centrally located NGL fractionation plants. Often
suchfractionationplantswillbelocatedclosetoLPGexportterminalsorpetrochemicalfacilities.Infact
petrochemical complexes and NGL fractionation facilities or condensate splitters are frequently
combined. The products of NGL fractionation are typically LPG, ethane (C2H6), gas plant naphtha,
pentane (C5H12)andgas plant condensate.LPG is a commontermfor propane(C3H8), butane(C4H10),
isobutane or any mix of those. The gas plant condensate is again a raw product that is sold for the
sameapplicationsasfieldcondensate.Alternatively,gasplantcondensatemaybedirectlyfractionated
intonaphtha,gasolineandotherpetroleumproductsatthefractionationplant,sothatnocondensateas
suchissoldfromtheplant.

12
1.3 IscondensateaNaturalGasLiquid?
The inclusion of condensate alongside other gas liquids rests on three key analytical principles. Firstly
field condensates are liquids that typically come with a natural gas stream, even though some gas
condensate fields produce little associated natural gas. Secondly, field condensate has the same
chemicalcompositionandisputtothesameuseasgasplantcondensate,soanydivisionbetweenthese
sources would be an artificial one dependent merely on the field separation facilities as opposed to
liquidquality.Thirdly,fromananalyticalstandpointitisimportanttodistinguishbetweencondensates
andcrudeoilsproducedbyOPECmembercountries.CalculationofOPECcrudeproductionquotasbythe
OPEC secretariat and member states has historically tended to exclude gas condensate. Wherever
possible,IEAdatathereforeattempttoseparatecondensateproductionbyOPECcountriesfromcrude
production,reportingthecondensatetogetherwithotherNGLs.WithinIEAoilmarketbalances,crude
productioncapacity,alongwithcondensateandotherNGLproductionareforecast.Yearly,quarterlyor
monthly levels of crude production by individual members are not, but rather are represented in
aggregatetermsbytheimpliedcallonOPECcrudeandstockchange.FornonOPECcountriesonthe
otherhand,fieldcondensateisoftenreportedalongwithcrudeproduction,andoftenblendedinwith
crude at or near source. The Oil Market Report (OMR) reports field condensate along with NGLs for
thosecountriesthatsplititoutinatransparentandconsistentway.Inevitablyhowever,itisnotalways
possible to segregate condensate production from reported crude volumes, leading to a degree of
inconsistencywithinIEAandothersourcesofmarketdatainthewaythatcrudeandNGLarecategorised
and reported. One aim of this report is to raise awareness of the inconsistencies in the reporting of
crude, condensate and other NGLs and, by suggesting common definitions, to encourage more
consistentreportingpractices,involvingideallygasplantandfieldcondensatereportedseparatelyand
alsoinformationonthedegreetowhichcondensateisspikedorsegregated.
1.4 NGLsandgasprocessing
Beforenaturalgascanbeuseditisprocessedtoremoveimpurities,toextractvaluablecomponentslike
propane,butaneandethane,andtoensuretheproductionofconsistentqualitydrygas.Theprocessing
ofnaturalgasworksonthesameprincipleastherefiningofoil,wherethedifferentboilingpointsofthe
gascomponentsfacilitatetheirseparation.
NaturalGasProcessing:TheCrucialLinkbetweenNaturalGasProductionandItsTransportationtoMarket

13
The illustration above is sourced from Natural Gas Processing: The Crucial Link between Natural Gas
Production and Its Transportation to Market, published by EIA in 2006. The illustration distinguishes
between lease, or field, operations and plant operations, and highlights the fact that gas processing
startsatthewellhead,andthatdifferentstepsintheprocessfromwellheadtopetroleumproductscan
takeplaceatfieldleveloratagasplantgiventhecharacteristicsofthegasandtheequipment.
Insteponethewellstreamfromagasoranoilreservoirentersaninletseparatorwhereoilisseparated
and then transported to a refinery, while the gas continues to a separation process where the
condensate is split out. The rich gas stream may now be transported to a gas plant for dehydration,
removal of contaminants, and nitrogen extraction or those steps may be undertaken at the field.
ContaminantsthatareremovedaretypicallyCO2andhydrogensulphide(H2S),butalsometals,sandand
other solids that could be detrimental to the pipelines or other equipment. In the demethaniser the
methane,ordrygas,issplitoutandcanmoveontoanexportpipelineortofieldreinjection.Thedrygas
has to be compliant with the sales gas specification (spec) in the market. The spec will regulate the
calorificcontent,acidity,dewpointandothercharacteristicsofthegas.TheNGLsgotoafractionator
whereNGLsaresplitintoethane,propane,butane,isobutane,pentane,naturalgasolineandgasplant
condensate.Thefractionatormightbeaseparateplantorintegratedwiththegasplant.TheNGLsare
nottheonlybyproductsofgasprocessing.CO2,sulphurandheliummayalsobeextractedfromtherich
gasstreamanddisposedormarketed.
The separation and fractionation processes depend on the fact that various hydrocarbon components
havedifferenttemperaturesatwhichtheyvaporise,andtheboilingpointalsodependsonthepressure
inthecontainer.Forexample,propaneandbutanecanbedrawnoffasliquidwhennaturalgasiscooled
to42C.Toobtainethane,thenaturalgashastobefurthercooledto89C,thetemperatureatwhich
ethaneturnsintoliquid.Bycontrollingthepressureandtemperatureinthecontainerdifferentfractions
willseparateandberemoved.
Theillustrationbelowsummarisedthedefinitionsofdrygas,NGLsandothernaturalgases.
Definition of dry gas, NGL, LPG and nonhydrocarbon gases

14
The table below summarises the chemical connotations, molecular structure and boiling points at
atmosphericpressureofthenaturalhydrocarbongasesfrommethanetopentane.
Natural hydrocarbon gases from methane to pentane
Name Chemicaldenotation Illustration Boilingpoint
Methane C1H4 161.6C
Ethane C2H6 88.6C

Propane C3H8 42.1C
Butane C4H10 0.5C

Isobutane C4H10 11.7C
Pentane C5H12 36.1C
1.5 Characteristicsof,andmarketsfor,NGLs
NGLs can be sold together with methane to, for example, power plants, or they may be destined for
petrochemical or fertiliser production together with methane or they may be split out and
commercialisedasLPGorotherproducts.LPGisacommontermforpropane,butaneandisobutaneor
anymixofthosecomponents.
Theproductsfromgasprocessingplantsareformostpracticalpurposesidenticaltothelightendsthat
come out of oil refining. IEA statistics estimates that 56% of global LPG and ethane production came
from gas processing plants in 2007, while refineries accounted for the remaining 44%. The share of
naphtha from gas processing plants was 4%. If we talk about gas plant liquids and refinery LPG and
ethanealikewemayrefertoallofitasgasliquids,asopposedtothetermnaturalgasliquidsthat
includeonlytheliquidsthatwederivefromnaturalgas.
NGLs require specialised transportation and handling up to the point of consumption. They are
transportedrefrigeratedorunderpressure.LPGishighlycombustibleandhasothercharacteristicsthat
make it hazardous to handle. LPG will spread readily at ground level, and may infiltrate, for example,
sewage or water systems in urban areas, generating a risk of widescale explosion. There have been
several serious accidents in the history of LPG that have caused many fatalities and material damage.
Components of LPG such as butanes and isobutanes may also be used as a blendstock for gasoline to
improvefuelcombustionperformance.However,itsuseinthiswayisrestrictedduringsummermonths
andinhightemperatureareasbecauseoftheadverseimpactsofevaporativeemissions.Forthereasons
ofevaporationandcombustionrisk,thetransportandhandlingsystemforallLPGcomponentshastobe
carefully designed and maintained. NGLs also need specialised storage facilities that comply with the

15
safetyimperativesofthisfuel.However,onceLPGisloadedintopressurisedbottlesorcanistersitcanbe
readily transported and used with little further need for infrastructure. LPG bottling plants are very
simplefacilitiesthatrequirelittleinvestment.
LPGisacleanandefficientfuel,witharelativelylowcarbonfootprintcomparedtooilingeneralbecause
the molecules have relatively many hydrogen atoms to each carbon atom, ensuring a more complete
combustion of which the waste is partly water. LPG also contains few or no contaminants so that
emissionsofSO2 andNOxgasesareabsentornegligible.LPGcancompetewithnaturalgasasaheating
andcookingfuel,butwiththeadvantageofrequiringmuchlessexpensiveinfrastructuretodistributeit
to the residential or commercial market. There is massive growth potential in areas where biomass is
currentlyused,notablyinAfrica.Themiddledistillatecutkerosene(orparaffin)isalsoasubstitutefor
biomass inthisway.Aseconomiesdevelopfurther,as forexampleChina,IndiaandEgypt,aswitchto
naturalgasfrequentlytakesplace,atleastinurbanareas,whileLPG(orkerosene)maystillplayarolein
ruralareas.IndevelopedcountriesLPGisfrequentlyusedforcampingandforheatinginsecondaryor
temporaryholidayhomes.
About half of global LPG demand comes from residential and commercial markets for heating and
cookinginhomesandbusinesses.LPGandnaturalgasaresubstitutesforeachotherintheresidential
and commercial sector, largely on a sequential basis. Typically as the energy economy evolves,
infrastructureinvestmentsleadtothereplacementofLPG(orkerosene)withnaturalgas.Wetherefore
oftenseeapatternofadevelopingcountryfirstreplacingbiomasswithLPGorpetroleumfuel,andthen
replacing LPG with natural gas. Therefore, in the short and medium term, baseload demand from the
residentialcommercialsectorisrelativelyinsensitivetoprice.
The balance oftheLPGmarket ishighlysensitivetochanges inLPGpricingdue to highdegreeof fuel

substitution.Asfeedstocktothepetrochemicalsectornaphtha,LPGandnaturalgasaresubstitutesfor
each other in the manufacture of olefins and fertilisers. In the transport sector gasoline and LPG are
potentially substitutes,althoughavehiclewouldhavetobefittedwith anenginethatcanhandleLPG
instead of gasoline, and an LPG distribution network would have to be developed before widespread
substitutioncouldtakeplace.Onaneconomicbasistherefore,transportfuelswitchingisatamuchless
developedstagethaninthepetrochemicalsector.
On a longterm basis, global storage for LPG is quite limited. Apart from the USA, and especially the
MtBelvieustoragefacilityintheGulfofMexico,fewlocationsaroundtheworldhavealargeamountof
excess primary LPG storage capacity. Because LPG is a byproduct, it is difficult to regulate global LPG
production in response to oversupply. Consequently, when regional market supplies exceed baseload
demand,LPGpricesusuallybegintofallrelativetootherpetroleumproducts.TheLPGmarketistypically
cleared by pricesensitive olefins producers who can substitute LPG for other feedstock. These
petrochemical companies switch opportunistically as prices come under downward pressure during
periodsofoversupplyforthepremiumLPGmarkets.
1.6 Evaluatingmidstreaminvestments
AconsequenceofthevolatilityofNGLprices isthattheprofitabilityofthe NGLbusiness,inparticular
natural gas processing, is also very volatile and difficult to predict. Therefore planned gas processing
projectscanoftentakeconsiderabletimetomovefromthedrawingboardtocompletionandstartup.
Condensate is generally easier to monetise, and plans to install condensate production capacity can
therefore arguably be realised on a more predictable timeline than other NGL extraction and
fractionation plans. Midstream investments are also very difficult to evaluate from a financial point of
view. The costs of developing segregated storage and shipment infrastructure have to be balanced
againstthevalueofmonetisingdifferentiatedproductsatatimewhenmultipleprojectsarecompeting
for funds in an integrated oil company. Below is a list of factors that may drive decisions to invest in
differentconfigurationsofmidstreaminfrastructure:

16
1) Large scale gas developments, either for major LNG or pipeline export projects or wide scale
countrywidegasificationprojects.
GasfromonelargefieldormultiplegasfieldsareneededtofillanLNGplantoveritslifetime.
Salesgasneedstomeetcertainqualityspecifications,andtheexistenceoffeedgasofvarious
qualitieswillnecessitatetheconstructionofgasprocessingplantsandaplanforthehandlingof
NGLs.AsharbourfacilitiesarerequiredtoexporttheLNG, facilities forhandlingofVeryLarge
GasCarriers(VLGC)tankersmaybebuiltwithoutaddingtoomuchcost.
2) Companiesspecialisinginmidstreaminvestmentsthatallupstreamoperatorsbenefitfrom.
IntheUSAspecialisedmidstreamcompaniesdominategasprocessing.Thereforenaturalgascan
be processed in an efficient way even though the number of field operators is very high.
Specialised midstream companies in Alberta, Canada have also developed systems to collect
associated gas from multiple oil sand/ bitumen production sites, illustrating how this market
structurecanfosterinnovationandcompetitiveness.
3) Agasprocessingcentrethatworksasahubforanentireproducingcountryorregion,
SomecountrieslikeSaudiArabiaandAlgeriahavecountrywidesystemsforgatheringassociated
andnonassociatedgas,withpipelinesconnectingtheinfrastructureinthewholecountryfrom
welltoexportterminalsorpointsofdomesticconsumption.ThecountrywidesysteminSaudi
ArabiaisreferredtoastheMasterGasSystem.
In countries with multiple unrelated producing, consuming or exporting regions, regional gas
mastersystemsmayexist.InAustralia,manygasproducersintheGippslandbasinintheSouth
Eastutilisethesamegasplants,allgasproducers intheonshoreCooperbasin inthemidEast
utilise another plant, while the Karratha gas plant process gas from various gas fields on the
NorthWestShelf.
4) Anintegratedsystemthatisregulatedlikeanaturalmonopoly
The Norwegian Continental Shelf benefits from an integrated transport and processing system
where large trunk pipelines feed gas from multiple fields to central complexes for processing,
and then to export pipelines or centrally located gas processing plants onshore. Ready third
partyaccesstoprocessingandshipmentinfrastructureisacrucialcomponentofthissystem,and
acompanyjointlyownedbytheoilcompanies(Gassled)ownstheinfrastructureandcoordinates
investments,andpricesaresetbyregulatedtariffs.

17
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 M ETHODOLOGY
2 Methodology
2.1 Baselinerevision
Before setting out expected NGL production levels for the future, this review has involved a
comprehensivereviewofexistingandnewsourcesofhistoricalNGLsupplydata.NGLsupplyestimates
containedintheIEAsOilMarketReport(OMR),MediumTermOilMarketReport(MTOMR)andMonthly
Oil Data Service (MODS) have traditionally comprised a combination of monthly submissions from
membercountries(MonthlyOilStatistics(MOS))forthemonthM2,annualnonOECDdatasubmissions
witha1.5yeartimelagandmonthlyJODIdata,typicallywithatimelagofatleastM1.Theseofficially
reported and fairly aggregated data have traditionally been augmented by data and information from
othernational,companyspecificandmarketintelligencesources.
However,significantvarianceexistsforreportedNGLdatabetweenpubliclyavailablesources,frequently
forthesamecountry.Differencesindefinition(inclusionorexclusionofethane,condensateetc)account
for much of this variance. Variable conversion factors in instances where original data have had to be
convertedfrommassorenergycontentintovolumeisalsoafactor.ThereportingofcomponentsofNGL
productionalongsideorasapartofnaturalgas,orrefiningsectordatahasalsoprovedproblematic.The
generalruleisthatgasplantliquidsareincludedwiththeNGLfiguresreportedtotheIEAbymember
countries,whilethefieldcondensateisreportedalongwiththecrude.However,thereareexceptionsto
thisrule,notably forNorwayforwhichalsospikedfieldcondensateisincludedinthetotalNGLfigure
quoted by the OMR. The support provided for this project by the Norwegian government has also
allowed OIMD to subscribe to a variety of new market intelligence sources which will allow more
detailedcrosscheckingofmonthlyandannualsupplyestimatesinfuture.
In aggregate, our attempt to verify and harmonise prevailing OMR/MTOMR/MOS NGL production
estimateswiththirdpartysourceshasresultedinrevisionsfor2007and2008amountingto:
Downwardrevisionsof169and158kb/dglobally;
Downwardrevisionsof290and292kb/dforOPECcountriesand;
Upwardrevisionof121and134kb/dfornonOPECcountries.
OfthenonOPECrevisionof134kb/dfor2008,121kb/daccruetononOECDcountriesand13kb/dto
OECD countries, highlighting that data availability, timeliness and quality remains an issue when
estimatingnonOECDenergysupply/demand.
2.2 Amidstreamapproach
Inordertoverifyaggregateproductiondataandtoassesstheoutlookforagivencountryorregion,it
has been useful to deploy also a midstream approach. The midstream is the infrastructure that lies
between the field production (upstream) and the refining (downstream) ends of the oil and gas value
chain. Typically, this refers to pipelines, but also the whole entire range of oilgasseparators and gas
processing plants. NGL fractionation, whereby NGLs are split into LPG and other products, is strictly
speakingcomparabletorefiningoperations,buttheNGLextractionandfractionationoftentakespartat
thesamecomplexes,andhencethewholegasprocessingplantmaybeconsideredasbelongingtothe
midstream part of the value chain. A midstream approach involves trying to map the current NGL
production and outlook by getting an overview of the infrastructure that a country has built and
operatesforgasgathering,transportationandprocessing.Afieldthatproducesassociatedgashastobe
connected to a transportation system and a gas processing facility in order for the gas liquids to be
utilised.OutputofNGLsfromcountriessuchasBrazil,AngolaandRussiahasarguablybeenrestrainedby
lacking investments in midstream infrastructure, while other countries have built midstream

18
infrastructuretooptimisevaluecreationfrom allhydrocarbons.This approach was alsouseful to do a

sensecheckoftheexistingOMRNGLdata,anditwasalwaysusefulinordertoassesstheoutlookfora
producing country or region. This bottomup approach based on gas gathering and gas processing
infrastructureallows moreaggregatedproduction estimates to bechecked. Informationonmidstream
infrastructureisoftenavailablefromgovernmentpetroleumagenciesandthetradepublicationOiland
GasJournal(OGJ),publishesaglobalcatalogueofgasprocessingplants,whichwasusefulasastarting
pointforcountriesforwhichlittleinformationwasavailablefromofficialsources.ForRussiawefound
goodinformationongasprocessinginfrastructureoncompanywebsites.Oneofthemainadvantagesof
the midstream approach was that it in many cases allowed double counting of NGL production to be
identified.AsNGLsareoftenprocessedinmultipleplants,stackingofvariousNGLprojectsthatclaimto
giveincreasedvolumesofNGLscanoftenresultindoublecounting.Bytryingtomapproducingfields,
hubs, field processing facilities, pipelines and gas processing plants with NGL extraction and NGL
fractionation, an overview of the NGL value chain in a region or a country was obtainable that would
facilitatekeepingtrackofvolumesandtheavoidanceofdoublecounting.
Asapartofthisapproachexportinfrastructureanddomesticconsumptionofproductsderivedfromgas
fractionation plants was also mapped. That would often include assessing refinery production and the
overallimportandexportbalanceofthesameproductsinordertogainanappreciationoftheviability
of a countrys midstream infrastructure plans. NGLawareness was also identified as a factor in
assessingsupplies.TheNGLawarenessfactorvariesfromcountrytocountry,andinfluencestheextent
towhichacountrywouldreporttheNGLsasanintegratedpartofthepetroleumprojectsthattheyare
undertaking. The OPEC countries and the USA are examples of countries with a high NGL awareness,
while Russia, India, China and Brazil seem to be countries with a relatively low NGL awareness. NGL
awareness can influence the extent to which countries flare or reinject NGLs with associated gas,
optimiseNGLextractionintheirvaluechains,leaveNGLswithinthesalesgasstreamorspikecondensate
intocrudeoil.
2.3 Alignmentwithnaturalgasforecasts
Estimates of future NGL supplies hinge critically on expected production of natural gas, split between
associated and nonassociated gas and between conventional and nonconventional sources. An
indispensibleinputtothisNGLforecastwerethereforethenaturalgasproductionforecastsbycountry
for 2008 and 2015 from IEAs World Energy Outlook 2009 (referred to in this text as WEO2009). It is
importanttonotethatthenaturalgasforecastsfromWEO2009weremadeforthepurposeofamore
aggregatedandlongertermoutlook.Thedata arethereforenotalwaysagoodguidanceforayearby
yearandcountrybycountryoutlookwithintheforecastperiodofthisreport.
Projectstackingrisksgeneratinganoverlyoptimisticoutlookonbothoilandgasproduction,asitrisks
overlooking the decline in the underlying production base, which is hard to assess, and the impact of
manyfactorsliketheinvestmentclimate,individualprojectcosts,andtheimpactofnaturalgasdemand.
Generally, these NGL projections align closely with the WEO gas output projections. However, in the
caseswhereacountryhasmanywelldocumentedprojectsthatwillyieldNGLinthemediumterm,and
there were strong reasons to believe in the realisation of those projects, the approach of stacking
projectshassometimestakenprecedenceoversimpleproportionalalignmentwiththeWEOnaturalgas
forecast. One reason why NGL production can grow more rapidly than implied simply by natural gas
productionisforexampleincaseswherehighvolumesofnaturalgasarereinjected.TheWEOnatural
gas production forecast is for marketed dry gas production rather than gross gas production. NGL
productionmaygrowatapacefasterthansuggestedbynaturalgasproductionwhentechnologiesfor
NGL extraction are improved, for example when ageing NGL recovery facilities are replaced with new
equipment, or if the underlying liquids content in the newer supplies of gas is higher than in older,
baseloadproduction,forexamplewhengascondensatefieldsaredeveloped.Fortheworldasawhole
theWEOforecastsnaturalgasproductiontogrowatacompoundedannualgrowthrateof1.2%peryear

19
from2008to2015,whileNGLproductionisforecasttogrowbyacompoundedaveragerateof4.0%per
year.RegionalnaturalgasproductionfromWEO2009issummarisedinthetablebelow.
Natural gas forecast from World Energy Outlook 2009 (bcm/y)

2008-2015 Compounded
OPEC Region 2008 2009 2010 2011 2012 2013 2014 2015
change annual growth
NON-OPEC Africa 73 75 76 77 78 79 80 81 8 1.6 %
Asia 365 351 366 378 390 402 422 434 69 2.5 %
Latin America 124 116 109 119 123 127 131 135 12 1.3 %
Middle East 44 46 55 55 59 60 60 60 16 4.5 %
OECD Europe 309 301 298 294 290 286 283 279 -30 -1.4 %
OECD North America 810 810 794 793 792 792 792 791 -19 -0.3 %
OECD Pacific 53 59 62 64 67 70 72 75 22 5.0 %
FSU and non-OECD Europe 873 808 810 827 844 861 878 903 30 0.5 %
NON-OPEC Total 2,651 2,568 2,569 2,607 2,644 2,677 2,717 2,759 108 0.6 %
OPEC Africa 135 141 136 143 156 163 171 179 44 4.1 %
Latin America 24 23 23 24 25 25 26 27 3 1.7 %
Middle East 335 320 365 405 421 432 445 461 126 4.7 %
OPEC Total 494 484 525 573 601 621 642 667 173 4.4 %
Grand Total 3,145 3,051 3,093 3,179 3,245 3,298 3,360 3,427 281 1.2 %

2.4 Assessmentoftrendsinliquidcontentofgas
Everynaturalgasstreamhasitsownspecificphysicalandchemicalcharacteristics,notunlikecrudeoil.
Whileforcrudeoils,publishedassaysshowpotentialbuyerstheAPIgravity,sulphurcontentandother
characteristicsofthecrudeoil,fornaturalgastheworldislesstransparent.Veryoftentheinformation
about the composition of rich gas is hard to obtain. This study has made use of published natural gas
qualityinformationinthelimitednumberofinstanceswherethishasbeenavailable.
Otherwiseanideaoftheliquidscontentofthegascanbeobtainedbylookingatdatafordrygasand
aggregateNGLproductionfromacountry,aplantoraproject.Oftentheliquidscontentofnaturalgas
canvarybyfieldandareawithinacountry.Forexample,associatedgasisoftenmoreliquidspronethan
thenonassociatedgas,gasfromunconventionalsourcesmighthavespecificcharacteristicsandsoon.
Thedevelopmentoflargegascondensatefieldsinacountrycanincreasetheimpliedliquidstogasratio
for a country substantially. The liquids content of gas does not necessarily align when comparing the
nationallevelreservesandproductionfromindividualfields.Importantly,theliquids,whicharemostly
priceshigherthannaturalgas,arefrequentlyproducedearlyinthelifetimeofagasfield,bothinorder
to maximise Net Present Value (NPV) as the dominant investment decision criterion, and because the
liquidscanoftenbecometrappedinthereservoironcetheoverallreservoirpressurestartstofallasa
result of earlystage production. In order to have a measure for the liquids content in gas to facilitate
comparisonsbetweenvarioussourcesofgas,theconceptoftheliquidsratiowasdeveloped.Normally
the liquids ratio is stated in a weight unit of liquids divided by a volumetric unit of natural gas, for
examplegramsperthousandcubicfeet(mcf).Inthisreport,reflectingthepredominantuseofbarrels
perday(b/d)inoilmarketanalysis,theliquidsratiowascalculatedbydividingNGLsupplyinthousand
barrelsperday(kb/d)withthedrygasfromthesamesourceinthousandbarrelsofoilequivalentsper
day (kboe/d). Oil equivalents of natural gas is calculated with the conversion factor of 6.29 so that
1bcm/y of gas is 1*6.29*1000/365= 17.2 kboe/d, assuming a heating value of the gas of
40MJ/cubicmeter.
Foreachcountrytheextenttowhichthecompositionofthegasproductionischangingovertheforecast
periodhasbeenassessedintermsofassociatedandnonassociatedgas,gasproductionfromnewareas
or new types of reservoirs, nonconventional gas reserves etc. The degree to which the relative
composition of gas supply changes has also been used to assess fluctuation in the liquids ratio of the
country.Moreoftenthannot,judgementhasbeenbasedonincompleteinformationtothisrespect.If

20
specific information has been lacking it was assumed that the liquids ratio would remain constant.
Whereverpossiblehowever,aliquidsratioforeachkindofgashasbeenutilisedalongsideanestimate
fortheevolutionofthecompositionoftotalgasproductionovertheforecastperiod.
IntheWEO2009forecast,associatedgasasashareoftotalconventionalgasproductionremainsstable
at27%overtheforecastperiodto2015,inspiteofthefactthattheshareofassociatedgasinallregions
fallsslightly.ThereasonforthismathematicalconundrumisthattheshareoftheMiddleEastinglobal
naturalgasproductionisincreasing,andtheshareofassociatedgasintheMiddleEastismuchhigher
thanelsewhere,albeitfallingfrom49%to45%overtheforecastperiod.
2.5 Selectionofcountriestobeincludedinthestudy
OMR data comprise NGL production profiles from 59 countries. This NGL review includes indepth
assessmentsoftheNGLbaselineandoutlookfrom42ofthosecountries.TheNGLproductionfromthe
countrieswhichareincludedinthereviewmakesup97.6%ofthetotalNGLin2008and98.3%ofthe
NGLproductionin2015.Theselectionofcountriestobeincludedinthestudyisdoneonthebasisofthe
sizeofcurrentNGLproduction,outlookforfutureproductionand/orpossibleinterestingdevelopment
trends.All12OPECmembersareincluded.TheOECDcountriesthatareincludedaretheUSA,Canada,
Mexico,Norway,UK,Denmark,NetherlandsandAustralia.NonOPECLatinAmericancountriesthatare
includedareArgentina,Trinidad&Tobago,Bolivia,BrazilandPeru.FormerSovietUnion(FSU)countries
thatareincludedareRussia,Kazakhstan,Azerbaijan,TurkmenistanandUzbekistan.Asiancountriesthat
areincludedareIndonesia,Malaysia,Thailand,IndiaandChina.NonOPECMiddleEastcountriesthatare
includedareOman,Syria,BahrainandYemen.NonOPECAfricancountriesthatareincludedareEgypt,
TunisiaandEquatorialGuinea.

21
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 T RENDSIN NGL P RODUCTION
3 TrendsinNGLproductionthatimpactNGLsupply
AnimportantfindingofthisreviewhasbeenthatNGLoutputovertheforecastperiodincreasesatarate
of4.0%,whilethemarketednaturalgasproductionincreasesbyonly1.2%.Asaconsequencetheliquids
ratioover the forecastperiod risesfrom19.2% in 2008to23.3% in 2012, remaining atthat leveluntil
2015. How come that the natural gas apparently becomes more liquidsprone over 20082012? By
studying the natural gas and NGL outlook country by country, four global trends in natural gas
productioncanbeidentifiedthatimpactNGLsupply.Theimportanceofeachtrendvariesbycountryor
region,whilemultipletrendsblurthepictureinsomeregions.Trends13haveapositiveimpactonthe
supplyoutlookforNGLsandtheliquidsratio,whiletrend4hasanegativeimpact.
1. Largescalenaturalgasdevelopmentscharacterisedby
Participation by International Oil Companies (IOC) that tend to have a high NGL
awarenesscomparedtoprevailinghostcountryawareness.
Thedevelopmentoflargegascondensatefields.TheIOCsoftenseealargerpotentialin
suchfieldsthaninstandalonegasprojects.
ThedevelopmentofLNGprojectsforwhichitisimportanttostripliquidsoutofthegas
tomakethesalesgasmatchthespecofthetargetmarketandtooptimisethevalueof
the project by monetising valuable associated liquids. Integrated LNG and NGL
infrastructurereducethecostsintheNGLvaluechain.2009saweightnewLNGtrains/
capacityexpansionscomeonstreamwithatotalcapacityof66bcm/y.In2010and2011,
a further five new LNG projects, will enter service, most of these with significant
associatedNGLproduction,asshowninthetablebelow.
2. Increasedutilisationofassociatedgas
Higher awareness of the value of associated gas, both as marketed gas and for re
injectiontosupportoilproduction.
Initiativestoreduceflaringofassociatedgas.
Betterinfrastructuretogatherandprocessassociatedgas.
3. Higherliquidscontentintraditionaldrynonassociatedgas
When traditional shallow gas reservoirs are depleted, oil companies drill deeper down
and find structures with higher pressure, generally containing more condensate and
otherNGLs.
Technologyimprovement,higherenergypricesandexperiencemakeoilcompaniesless
reluctanttodevelopcomplexreservoirs.
TheNGLawarenessishigher,andthereforethevalueofgascondensatefieldsisrated
higher.
4. Wetassociatedgasisbeingreplacedbydrynonassociatedgas
As oil production declines in many countries compared to gas production, traditional

associatedgaswithahighliquidscontentdeclinestoo.
Countriesmustreplaceassociatedgaswithnonassociatedgastomeetdomesticneeds.
Thisnonassociatedgastendstobedrier.
Growthinnonconventionalgasproductionmayresultinlowerliquidsratios.

22
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 T RENDSIN NGL P RODUCTION
Examplesoftrend1aretheShahDenizfieldinAzerbaijanandtheKarachaganakfieldinKazakhstan,as
wellasmostLNGprojects.Examplesoftrend2arethecutbackofflaringandincreasedprocessingof
associated gas in Russia, and the gathering of associated gas to create an LNG project in Angola. In
Nigeria the NGL II East Field project of NNPC and ExxonMobil is an example of a project where NGL
recoveryfromassociatedgas,evenwhenthedrygasisreinjectedtosupportoilproduction,hasgivena
substantial contributiontoNigerian NGLproduction. Examplesoftrend 3 are Russia(dryCenomanian
gasisbeingreplacedbywettergas),theUSA(deepwaterGulfofMexico,RockyMountainsnaturalgas)
and Norway and the UK (high pressure/ high temperature complex fields are now being developed,
whichtendtoyieldmorecondensateandotherNGLs).Examplesoftrend4areMexico(thegasinthe
Northernregionisnonassociatedanddrierthanthetraditionalbaseloadassociatedgas),India(thelarge
Krishna Godavari basin has created a new gas era, but the incremental output of NGLs is low). Saudi
Arabia has triedtomake IOCs participate in exploration drilling for dry gas fordomesticconsumption,
butoftentheIOCsareonlyinterestedinnaturalgasforexportsorwhenitcomeswithlargecondensate
orotherNGLvolumes.
ThetablebelowlistsallLNGprojectsthatwerelaunchedorthatwillbelaunchedintheperiod2008to
2010and,whereavailable,anestimateoftheirassociatedliquids.For2012andonwardstheonlyLNG
project that we assume will come into operations are Pluto LNG train 2 and Gorgon LNG in Australia
whichareexpectedtoaddverylimitedvolumesofNGLs.
NGL from LNG projects 2008 - 2011

Country Project Location Start Capacity bcm/y Condensate (kb/d) Other NGLs (kb/d) liquids ratio comments
Australia North West Shelf Train 5 Burrup Peninsula 2008 6.0 42 41%
Nigeria NLNG Train 6 Bonny Island 2008 5.6 20 21%
Total additions in 2008 11.6 42 20 31%
Indonesia Tangguh LNG Bintuni Bay, Papua 2009 10.3 5 3%

Malaysia MLNG debottlenecking Bintulu Bay 2009 1.8 0%
Russia Sakhalin II Prigorodnoye 2009 13.1 100 44% Spiked condensate
Qatar Qatargas II (Train 4) Ras Laffan 2009 10.6 70 38%
Qatar Qatargas II (Train 5) Ras Laffan 2009 10.6 70 14 46%
Qatar RasGas III (Train 6) Ras Laffan 2009 10.6 50 45 52%
Yemen Yemen LNG (Train 1) Bal Haf 2009 4.6 8 10%
Yemen Yemen LNG (Train 2) Bal Haf 2009 4.6 8 10%
Peru Peru LNG Pampa Melchorita 2010 6.0 80 78%

Qatar Qatargas III (Train 6) Ras Laffan 2010 10.6 70 7 42%
Qatar RasGas III (Train 7) Ras Laffan 2010 10.6 50 27%
Australia Pluto Burrup Peninsula 2011 6.5 8 7%

Qatar Qatargas IV (Train 7) Ras Laffan 2011 10.6 70 38%
Total additions in 2011 17.1 78 - 26%
TheWorldBanksGlobalGasFlaringReductionInitiativehasestimatedthatatotalof140bcmofnatural
gaswasflaredintheworldin2008,downfrom162bcmin2005.Thetop20flaringcountriesaccounted
for 119bcm of the total flaring, of which Russia flared 40bcm, Nigeria 15bcm, Iran 10bcm and Iraq
flared 7bcm. It is difficult to say how much flaring of NGLs these numbers entail, since NGL might be
recovered before the dry gas is flared. The World Bank estimates are based on satellite photos and
analysisofthelightintensityoftheflame,butthecompositionofthematerialbeingflaredisnotapart
ofthestudysofar.ThismeansthatthecontentofNGLsmightbeanerrorsourceintheflaringestimates,
astheliquidspronegaswouldburnwithastrongerlightintensitythandrygas.IftheshareofNGLsin
flaredgaswasequaltotheworldaverageof19%liquidsinthegas,theNGLsburnedalongwiththegas
wouldbe460kb/d.InourNGLforecastforRussiaweassumethatareductionofflaringby25bcmby
2015 will yield an increased NGL production of 126kb/d, given an assumed constant liquids ratio of
associatedgasof30%.

23
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 G LOBAL NGL S UPPLY O UTLOOK
4 GlobalNGLsupplyoutlook
As shown in the summary table below, the global supply of condensate and other NGLs is forecast to
growby3.3mb/dfrom2008to2015,acompoundedannualgrowthrateof4.0%,comparedtogrowth
of 3.6% annually during 20002008. OPEC accounts for
Global liquids ratio development
2.9mb/d of the increase. We estimate that the share of mboe/d
gasplantliquidstototalNGLsincludedinourfiguresfalls 70 27%
from 68% to 63% over the forecast period, with the 60 26%
25%
remainderbeingfieldcondensate.Thehighestgrowthin 50
24%
absolutetermsisobservedin2009and2010.Thetrends 40 23%
of large natural gas development projects, better 30 22%
utilisationofassociatedgasandthedevelopmentofmore 20
21%
20%
gascondensatefieldsamidatrendofdevelopingdeeper 10 19%
reservoirscontributeto thegrowth.Notably in2009 the - 18%
many LNG projects launched contribute to increases in 2008 2009 2010 2011 2012 2013 2014 2015
NGLproductioninbothyears,asfacilitiesgraduallybuild Natural gas (mboe/d)
NGLs (mboe/d)
uptofullproduction.Thetrendtowardsgreaterreliance Liquids ratio (RHS)
on drier, nonassociated gas is important in several
countries, but the effect globally is overshadowed by greater liquids recovery overall. As natural gas
productionincreasesbyanaverageof1.2%annuallyfrom2008to2015,thegloballiquidsratioincreases
from19.2%in2008to23.3%in2012andremainsatthatlevelthroughto2015.
Global liquids ratio developent
2008- Compounded
2015 annual
2008 2009 2010 2011 2012 2013 2014 2015 change growth
Natural gas bcm 3,145 3,051 3,093 3,179 3,245 3,298 3,360 3,427 281 1.2 %
Natural gas (mboe/d) 54 53 53 55 56 57 58 59 5 1.2 %
NGLs (mboe/d) 10 11 12 12 13 13 14 14 3 4.0 %
Liquids ratio (RHS) 19.2% 20.6% 21.8% 22.8% 23.3% 23.4% 23.4% 23.3%

As compared to the NGL estimates in the MTOMR June 2009, the global NGL figure is adjusted
downward by 158kb/d for the base year 2008, while the outlook is revised down by an average of
295kb/d for the years 20092012. For 2013 and 2014 the forecast is revised down by 83kb/d and
95kb/d respectively. The revisions are due to delays in project development, the adoption of new
reportedbaselinedataandtobetterdataandforecastqualityasanoutcomeofthisreview.
NonOPECcountriesNGLproductionisrevisedupby259and139kb/dfor2009and2010respectively,
withrevisionsfortheyears20112014averaging82kb/d.Themainupwardrevisionhastakenplacefor
Russia,whichpostsanupwardrevisionof154kb/din2009,increasingto223kb/din2014.Inparthis
derivesfromareclassificationoferstwhilecrudeoilvolumestocondensate,butalsoduetounderlying
condensate growth. The aggregate NGL forecast for the OECD countries is revised down by 62kb/d in
2010, with downward revisions reaching 275kb/d in 2014, and the most important downward
adjustmentsbeingthosefortheUSAandCanada.
TheaggregateNGLforecastforOPECisreviseddownby292kb/din2008andby550kb/dand590kb/d
in2009and2010respectively,withtherevisionfor2014narrowingto175kb/d.Thedownwardrevision
forAlgeriaispartiallyareclassificationbetweencondensateandcrudeoilandalsoalowerbaselinefor
otherNGLs.ThedownwardrevisionsforNigeriaandLibyaareduetotherecognitionthattheutilisation
oftheirinstalledcapacityinrecentyearshasbeenlowerthanpreviouslyassumed.TheSaudiArabiaNGL
forecastisreviseddownby141kb/din2009,byanaverageof290kb/dfortheyears20102012andby
221kb/d and 214kb/d for 2013 and 2014 respectively, mainly due to delays in the attainment of
capacityoutputatseveralSaudiArabianprojects,notablytheKhursaniyahproject.

24
World Supply of Condensate and other NGLs 2008-2015

Compounded
2008 2009 2010 2011 2012 2013 2014 2015 2008-2015 annual growth
Non-OPEC
USA 1,781 1,886 1,790 1,763 1,757 1,752 1,746 1,741 (40) -0.3%
Canada 699 655 636 622 610 597 585 573 (126) -2.8%
Mexico 365 370 377 377 377 377 377 377 12 0.5%
OECD North America 2,846 2,911 2,802 2,762 2,744 2,726 2,708 2,691 (154) -0.8%
Norway 527 533 536 529 532 531 528 526 (1) 0.0%
UK 215 179 174 176 180 170 160 150 (65) -5.0%
Other OECD Europe 25 25 25 23 21 19 17 16 (9) -6.5%
OECD Europe 767 737 735 728 733 720 705 692 (76) -1.5%
Australia 74 79 83 87 91 95 99 104 30 5.0%

Other OECD Pacific 17 16 18 17 17 17 16 16 (1) -1.0%
OECD Pacific 91 95 100 104 108 111 116 120 29 4.0%
Total OECD 3,704 3,743 3,637 3,594 3,584 3,557 3,529 3,503 (201) -0.8%
Russia 536 589 627 662 698 735 772 817 281 6.2%
Kazakhstan 305 322 315 372 443 431 420 410 106 4.3%
Azerbaijan 42 44 42 46 46 46 46 46 5 1.6%
Uzbekistan 59 62 62 63 63 64 64 64 5 1.2%
Other FSU 33 33 37 37 39 41 41 42 9 3.5%
FSU 975 1,049 1,084 1,180 1,289 1,316 1,344 1,380 406 5.1%
Non-OECD Europe 15 15 14 14 13 12 10 9 (6) -6.5%

Asia 647 660 692 714 759 793 797 792 145 2.9%
Africa 282 283 280 280 283 285 288 291 9 0.4%
Middle East 146 160 175 178 178 179 181 183 36 3.2%
Latin America 308 326 328 335 343 351 360 369 61 2.6%
Total non-OECD 2,373 2,492 2,573 2,701 2,866 2,937 2,981 3,023 650 3.5%
Total non-OPEC 6,077 6,236 6,210 6,295 6,449 6,494 6,510 6,526 449 1.0%
OPEC
Iran 441 521 585 785 904 932 985 1,048 607 13.2%
Iraq 34 42 56 59 64 68 73 79 45 13.0%
Kuwait 161 190 195 205 223 308 320 320 159 10.3%
Qatar 610 721 1,010 1,228 1,280 1,296 1,326 1,400 790 12.6%
Saudi Arabia 1,428 1,311 1,475 1,625 1,690 1,759 1,768 1,765 337 3.1%
UAE 528 519 643 813 837 868 930 922 394 8.3%
Middle East OPEC 3,202 3,305 3,964 4,716 4,997 5,231 5,402 5,534 2,332 8.1%
Algeria 588 628 668 705 728 745 762 780 192 4.1%
Libya 117 115 111 111 111 122 168 172 55 5.7%
Nigeria 160 273 387 408 419 420 421 410 250 14.4%
Angola 50 50 50 50 86 92 92 92 42 9.1%
Venezuela 210 210 211 212 213 214 215 216 6 0.4%
Ecuador 2 2 2 1 1 1 - - (2) -100.0%
Other OPEC 1,126 1,277 1,428 1,487 1,558 1,594 1,658 1,671 545 5.8%
Total OPEC 4,328 4,582 5,392 6,203 6,555 6,825 7,060 7,205 2,876 7.6%
Total world NGL & condensate 10,405 10,818 11,602 12,498 13,005 13,320 13,570 13,731 3,326 4.0%

25
World Supply of Condensate and other NGLs revisions compared to MTOMR June 2009
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Non-OPEC
USA - - 3 7 - 70 (50) (108) (145) (188) (231)

Canada - - - 20 24 (17) (31) (53) (74) (95) (116)
Mexico - - (2) - - 1 5 3 2 (0) (2)
OECD North America - - 1 27 24 54 (76) (158) (218) (283) (349)
Norway - - - - - 44 55 55 73 87 97
UK - - 2 (1) (6) (31) (21) (9) - - -
Other OECD Europe (6) (8) (15) (1) (4) (16) (15) (5) (5) (5) (5)
OECD Europe (6) (8) (14) (2) (11) (3) 19 41 68 82 92
Australia - - - - - 5 (2) (13) (14) (15) (16)

Other OECD Pacific - - 0 - - (3) (2) (1) (1) (1) (2)
OECD Pacific - - 0 - - 2 (4) (15) (16) (17) (17)
Total OECD (6) (8) (12) 25 13 53 (62) (132) (166) (218) (275)
Russia 65 61 58 58 65 154 214 150 173 198 223

Kazakhstan 29 29 29 34 34 48 (16) 24 95 97 100
Azerbaijan (5) (5) (5) (6) 0 (3) (5) (1) (1) (2) (4)
Uzbekistan 2 2 2 2 9 8 13 15 18 21 23
Other FSU (8) (5) (5) (5) (7) (8) (4) (6) (5) (4) (4)
FSU 84 82 79 83 102 199 201 183 281 310 339
Non-OECD Europe - - - - - - - 1 1 1 1
Asia (16) (9) (24) (28) (28) (37) (27) (12) (27) 1 10
Africa 18 40 31 36 34 27 16 11 8 5 1
Middle East (0) (5) (7) (6) (1) 8 18 20 20 18 16
Latin America 30 30 21 12 13 9 (7) (19) (20) (17) (12)
Total non-OECD 115 137 100 96 121 206 201 184 263 318 355
Total non-OPEC 109 130 88 121 134 259 139 52 98 100 80
OPEC
Iran (33) (84) (65) (37) (20) (114) (139) 47 156 70 (28)
Iraq - - - - 5 10 26 29 34 38 43
Kuwait - - - - 5 - - (19) (104) (32) (20)
Qatar 20 83 76 69 55 48 74 86 51 37 21
Saudi Arabia - - 30 - 1 (141) (261) (316) (292) (221) (214)
UAE - 16 - - - (32) (52) (13) (20) 13 83
Middle East OPEC (13) 15 40 33 46 (228) (353) (185) (174) (95) (114)
Algeria (137) (157) (217) (243) (252) (199) (145) (84) (78) (97) (86)
Libya (1) (7) (19) (28) (26) (26) (28) (25) (22) (19) (16)
Nigeria (71) (80) (55) (52) (59) (96) (66) (36) (32) (35) (24)
Angola - - - - - - - - 46 60 60
Venezuela - - - - - - 1 2 3 4 5
Ecuador - - - - - - - - - - -
Other OPEC (210) (244) (291) (323) (338) (321) (237) (143) (84) (87) (61)
Total OPEC (223) (230) (251) (290) (292) (550) (590) (329) (258) (183) (175)
Total world NGL & condensate (114) (100) (163) (169) (158) (291) (451) (276) (161) (83) (95)

26
4.1 OPEC
kb/d OPEC NGL production
TheNGLproductioninOPECcountriespostsanet
growth of 2.9mb/d from 20082015, a 8,000
compounded annual growth rate of 7.6%. This 7,000
compareswithgrowthintheperiod20002008of 6,000
5.6% annually. The Middle East OPEC countries 5,000
contribute 2.3mb/d to the forecast, while Africa 4,000
countriesprovide0.5mb/d.Qataraloneaccounts
3,000
for 0.8mb/dof the total increase, while Iran
2,000
generates a 0.6mb/d. The United Arab Emirates
1,000
add 0.4mb/d, Saudi Arabia and Nigeria add
0.3mb/d each, while Kuwait and Algeria add -
2008 2009 2010 2011 2012 2013 2014 2015
0.2mb/d each. All in all the OPEC NGL output it
settorisefrom4.3kb/d2008to7.2kb/din2015. Iraq Kuwait Lat Am Saudi Arabia Africa UAE Iran Qatar
The OPEC countries have specific reasons to optimise NGL production, as such production is excluded
fromtheorganisationsselfimposedproductionlimits.MostofthecountriesthereforehaveahighNGL
awarenessandanelaborateinfrastructureforNGLrecovery.AlargenumberofcommittedLNGprojects
andtheneedtorapidlyexpandlocalnaturalgassupplyforpowergeneration,desalinationofseawater,
industrialdiversificationandoilfieldreinjectionallcombinetoencouragetherapidexpansionofOPEC
naturalgasproduction.InvestmentsaretakingplacetooptimiseNGLproductionfurther,andlargegas
condensatefieldsarebeingdeveloped.InWestAfricathetrendofbetterutilisationofassociatedgasis
important for the NGL production growth. On the other hand, the development of drier natural gas
depositsisbeinghamperedbyanunfavourabledomesticpricingregime.
4.2 NonOPEC Non-OPEC NGL production

InnonOPECcountriesNGLproductionrisesby kb/d
0.4mb/d over the forecast period, a 7,000
compounded annual growth rate of 1.0%, 6,000

comparedtoagrowthrateduring20002008of 5,000
2.4%. Growth in the FSU of 0.4mb/d and in 4,000
Asia, Middle East and Latin America combined 3,000
of 0.2mb/d is partly offset by a decrease in 2,000
North America of 0.2mb/d. The NGL output is
1,000
forecast to increase from 6.1mb/d in 2008 to
-
6.5mb/din2015.
2008 2010 2012 2014
OECD North America OECD Europe OECD Pacific
The NGL production figure for nonOPEC Middle East
Latin America
Africa
FSU + CCE
Asia
includes only those condensate volumes

reporteddistinctfromcrudeoil,asisthepracticeinOMR.ApplyingthesameNGLdefinitionaswedofor
OPECcountrieswouldyieldanNGLfigurehigherbyanestimated0.9kb/din2008,seetableonpage9.A
forecastisnotmadeforthesevolumes.
In Russia the trends of better utilisation of presently flared associated gas, and of nonassociated gas
becomingwetterduetothedevelopmentofdeeperreservoirs,haveasignificantimpact.InKazakhstan
thegrowthof106kb/disattributabletothefurtherdevelopmentoftheKarachaganakfield.Meanwhile
intheAsiaPacificNGLproductiongrowsduetorisinggasoutput,Indonesia,VietnamandThailandbeing
themostimportantcontributorsinthatregion,albeittheliquidsratioinmanyinstancesfallsduetoa
risingcontributionfromdriernonassociatedgas.InNorthAmericaNGLproductionisexpectedtofallby
acompoundedannualrateof0.8%duetoageneraldeclineinnaturalgasproductionand,onaverage,
theexploitationofslightlydriergasdeposits.

27
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 R EGIONALAND C OUNTRYBY C OUNTRY S UPPLY O UTLOOK
5 Regionalandcountrybycountryoutlookandanalysis
5.1 NorthAmerica
The region holds 9.5tcm of proven natural gas reserves, an increase of almost 30% compared to the
2004levelasaconsequenceofhigherexploitationofnonconventionalgasresources.However,North
America sees natural gas production falling slightly over the forecast period, sliding from 810bcm in
2009to794bcmin2010andstayingstablearound791bcmin2015.USnaturalgasproductionaccounts
forthebulkofthefallinabsoluteterms.Canadiannaturalgasproductionissettodeclinebyanaverage
of1%annually,whileMexicannaturalgasproductionrisesbyanaverageof1%peryear.Theshareof
associated gas to total conventional gas falls from 24% to 22%. Nonconventional gas production is
projectedrisingfrom322bcmin2008to357bcmin2015,includingtightgas(whichisnotcountedas
unconventional gas by the US EIA). Coal bed methane accounted for 56bcm of total US natural gas
productionin2008,whileshalegasaccountedfor62bcm,upfrom32bcmin2007.
TotalNGLproduction in NorthAmerica isexpectedtofallbya compoundedannualrate of0.8%from

2,846kb/din2008to2,691kb/din2015.Theliquidstogasratioisforecasttofallfrom20.4%in2008to
19.7%in2015.
OECD North America natural gas OECD North America NGLs

bcm mboe/d
1,000 25%
15 25%
800 24%
23%
600 23% 10
21%
400 22%
19%
5
200 21%
17%
0 20%
- 15%
2007 2008 2009 2010 2011 2012 2013 2014 2015
2004 2006 2008 2010 2012 2014
Unconventional gas
Conventional gas Natural gas (mboe/d) NGLs (mb/d)
Share of associated gas
Liquids ratio (RHS)
TheliquidsratiofortheUSAandCanadahasremainedveryresilienttothegrowingshareofbothnon
associated gas and unconventional gas lately. However, the trend that has been observed since the
1990s of a slightly falling liquids ratio is expected to become reestablished. The liquids ratio has
remainedremarkablystablesince1979,evenduringthepost1990growthperiodfornonconventional
gas.Bystudyingareaswithahighshareofshalegasproduction,likeTexasdistrict5,7Band9,wesee
that the recentgrowthin shale gas productionhas been accompaniedby a strong,althoughrelatively
weaker,growthinNGLproduction.TheliquidsratioforTexasasawholefellby7percentagepointsfrom
30%in1997to23%in2008,andby1.8percentagepointsfrom2007to2008whentheannualgrowthin
shale gas production was the highest. Coal bed methane holds little or no liquids, and New Mexico,
whichhasahighshareofcoalbedmethane,hasseentheliquidsratiofallingfrom28%in1998to25%in
2008.InCanadaoneseesthesametrendsasintheUSA,withincreasingimpactofnonconventionalgas
sources.AnothertrendthatisobservedinCanadaisbetterutilisationofassociatedgasfromoilsands.
TheseNGLsfromoilsandsarestillpredominantlyconsumedinthebitumenproductionprocess,butby
extractingliquidsandmarketingthemtheprocesscanreplaceNGLswithdrygas,whichisbothcheaper
andmoreenvironmentallyfriendly.
However,asnaturalgaspricesintheUSAhavelostgroundrelativetooilandNGLpricesoverthelast
year, this fact has a positive impact on the liquids ratio. As the price difference grows, it becomes
attractivefordeveloperstolookforthemostliquidspronepocketsofthereservoirswithintheirlicense.
The shale and tight gas plays with the highest liquids ratios become the most attractive ones to
developfirst.

28
In Mexico dry nonassociated gas production in the north is gaining ground as compared to highly
liquidsprone associated natural gas in the south. Although oil production is declining, natural gas
productionisrisingandsoNGLproductionisforecasttogrow,albeitatalowerratethantotalnatural
gasproduction.
5.1.1 USA
Relevantnaturalgastrends
Afterrisingfrom583bcmin2008toalmost600bcmin2009,USnaturalgasproductionisforecasttofall
toalowpointof565bcmin2011,beforerisingagainto570bcmin2015.Alowerpaceofinvestment
duringtherecessionandintheaftermathofsharplyweakergaspricesin2009isbehindtheexpectations
ofdeclineinnaturalgasproductionof0.3%annuallyovertheforecastperiod.Whilethecountofnatural
gasrotaryrigsaspublishedbytheUSEnergyInformationAdministration(EIA)peakedatalmost1600in
September2008,itfellfollowingtherecessionandhitalowof675inJuly2009.Sincethentherigcount
has gradually been picking up, approaching 800 in early 2010, still at its lowest level since 2003. In
comparisonthenumberofoilrigswasthenbackatprerecessionlevels.
From 2007 to 2008 natural gas reserves in the USA increased from 6.0tcm to 6.7tcm, and further to
7.5tcmin2009.Thereasonfortheincreaseinnaturalgasreservesrecentlyistherapidimprovementin
technologies to produce natural gas from unconventional sources, which according to WEO data
accountedfor45%ofnaturalgasproductionin2008.However,theUSreservestoproductionratioisstill
lowat13,comparedto75inRussiawhichhadanalmostidentical2009naturalgasproduction.Themost
important unconventional gas reserves in the US are tight gas, which accounted for 55% of
unconventionalgasproductionin2008,thenshalegas,whichaccountedfor23%,andcoalbedmethane
whichstoodfortheremaining21%.UnliketheIEA,theEIAdoesnotdefinetightgasasunconventional
gas, onlycoal bedmethane andshalegas. The expansionof bothcoal bed methaneandtight gas has
been going on since the 1990s, while the growth in production from shale gas reserves has expanded
massivelysince2007.
TheresilientliquidsratioofUSnaturalgas
The surprising observation from the USA is that the liquids ratio has remained rangebound between
17%and21%since1979,inspiteoflargechangesinthecompositionofnaturalgasproductionandthe
influenceofothernongeologicalfactorsdiscussedbelow.Thankstotheabundanceofdataandanalysis
fromUSgovernmentsources,itispossibletostudytheliquidsratioforthecountryasawholeandby
region,andtryingtoassesstheimpactofvariousfactors.
Associatedversusnonassociatedgas
Theshareofassociatedversusnonassociatedgasroseintheperiodfrom1979to1990,andhasfallen
slightlyovertheyearsfrom2000.Thisisnotassumedtohavehadanyimpactontheliquidsratio,asthe
liquidsratiointheUSwasstableorslightlyincreasingovertheyearsupto1990.
TightgasindeepwaterGulfofMexicoandRockyMountainsgasisgenerallywetter
OverrecentyearsnaturalgasproductionhasincreasedfromdeepwatergasfieldsintheGulfofMexico
andfromtheRockyMountains.Theliquidscontentfromthisgasisonaveragehigherthangasfromthe
restoftheUSA.LiquidscontentofdeepwaterGulfofMexicogasisalmosttwiceorthreetimesashighas
the natural gas from shallow water and onshore gas production in Texas respectively. This has had a
positive effect on the liquids ratio of the USA. The Granite wash tight sand play in Texas is also
characterisedasliquidsrich.

29
Shalegascouldseemdrier,butthewettestpartsaredevelopedfirst
71% of US shale gas production in 2008 took place in Texas. The Barnett Shale, Eagle Ford Shale and
partsofthe HaynesvilleShalearealllocatedinTexas.TheBarnettShalegenerated23%oftotalTexas
naturalgasproductionin2008.Inthefirstsixmonthsof2009itproduced23bcmofnaturalgas.The
shalegasdistrictsofTexas,district5,7Band9postedajoint56%growthinnaturalgasproductionin
2008,whiletheNGLproductionfromthesamedistrictsgrewby38%.Texasproduced32%ofthenatural
gasintheUSAin2008,atotalof193bcm,up34%since2004.NaturalgasproductioninTexasgrewby
12%from2007levels,whileNGLproductionincreasedby4%,resultingintheliquidsratiodroppingby
1.8percentagepoints.
However,onecannotconcludeonthisbasisthatshalegasisdrierthanothergas.Therapidgrowthitself
mightexplainthefallingliquidsratioinTexas.Midstreaminvestmentshavestruggledtokeeppacewith
the natural gas production growth. The midstream company Enterprise is investing heavily in Texas in
order to process and extract NGLs from the new natural gas production and suggest that all current
capacityinTexasisfullyused.BoththeBarnettshaleandtheEagleFordshalearecharacterisedasrichin
NGLs.
Coalbedmethaneisdry,butcoexistswithwettergasintheRockyMountains
Theproductionofcoalbedmethanehasevolvedsincethe1990s,andgrewby12%from2007to2008.
Coalbedmethane,asthenameindicates,consistsofmainlymethane,mixedwithCO2.In200829%of
coalbedmethaneproductiontookplaceinWyoming.25%tookplaceinColoradoand23%tookplacein
New Mexico. Total natural gas production in Wyoming and New Mexico in 2008 was 105bcm, up 7%
from2007.TheNGLproductioninthesamestatesgrewby11%during2008.Theoverallliquidsratiofor
Wyomingnaturalgaswas15%in2008,whiletheratioforNewMexicowas25%.Coalbedmethanewas
31% of the natural gas produced in New Mexico in 2008 and 25% of the natural gas produced in
Wyoming.Whilecoalbedmethaneisdry,itcoexistsinbasinsthatholdstrataofadifferentgeological
compositionwithhighliquidscontent.AsanexampletheSanJuanandtheGreaterGreenRiverbasinsin
the Rocky Mountains are known as coal bed methane strongholds, but the overall reserves in these
basinsshowliquidsratiosofmorethan30%.
Nongeologicalfactors
The followingthree nongeological factors have affected the NGL potentialin theUSA overtherecent
years:
1) Intheearly2000sthenaturalgaspricingschemeintheUSAchangedfromavolumebasis(per
thousand cubic feet) to a heatcontent basis (per million Btu). This created an incentive for
producers to increase the Btu contentof the natural gas delivered into the pipeline grid while
decreasingtheamountofnaturalgasliquidsextractedfromthenaturalgasstream.Duetostrict
gas specifications in the natural gas grid the natural gas delivered in the US gas grid must
neverthelessbeat1050btu/mcf+/50btu,limitingthescopeforsuchoptimisationbyretaining
liquidsinthegasstream.
2) The price difference between NGL products and natural gas will influence how much NGL
producers will choose to leave in the sales gas, limited however by the strict sales gas
specifications in place. Over 2009 the natural gas price has plummeted, while the oil price
recovered more rapidly after the crash in late 2008. However, LPG prices did not recover as
rapidly or as strongly crude oil prices, reflecting the competitive pressures from both gas and
otheroilproducts.However,thepricespreadin2009favouredoptimisationofNGLextraction.
3) While US natural gas producers previously were owners of gas processing plants, specialised
midstream companies have now taken over, creating a more competitive environment in the

30
midstream sector. This together with substantial geographical relocation of US gas production
hasledtoidlingofmanyoldgasprocessingplantsandtheconstructionofmanynewandlarger
units.From1995to2004thenumberofgasprocessingplantsintheUSAfellfrom727to530.
ThenumberisstillextremelyhighcomparedwithothercountrieswiththeexceptionofCanada,
which is in the same league. Duke Energy Field Services, Enterprise Products Operating LP,
Williams,DynergyandKochareexamplesofimportantmidstreamoperatorsintheUSA.
USA production outlook for natural gas and NGLs

2008 2009 2010 2011 2012 2013 2014 2015 change annual growth
Gas production (bcm) 583 596 569 565 566 567 568 570 -13 -0.3 %
Gas production (kboe/d) 10,042 10,272 9,806 9,741 9,758 9,777 9,795 9,815 -227 -0.3 %
NGL (kb/d) 1,781 1,886 1,790 1,763 1,757 1,752 1,746 1,741 -40 -0.3 %
NGL to gas ratio 17.7% 18.4% 18.3% 18.1% 18.0% 17.9% 17.8% 17.7%

CurrentNGLproduction
TheEIAisanexcellentsourceofNGLdatafromtheUS.TheEIAincludesonlygasplantliquidsinitsNGL
definition.SincethisistheNGLsextractedandnottheproductsofNGLfractionation,itisarawNGLmix
whichisnotsplitintoproducts.TotalNGLproductionsodefinedin2008stoodat1781kb/d.Thefigures
do not include lease (or field) condensate production that was about 470kb/d in 2008, down from
496kb/din2007.LeasecondensateisincludedwithinOMRcrudeoilfiguresfortheUSA.Thisinclusion
of only natural gas plant liquids in the NGL definition and a separate specification of field condensate
volumesamongUSofficialdataarearguablytheclearesttreatmentofNGLreportingandonethatIEA
membercountriesandotherreportingserviceswoulddowelltoemulate.
The USA is the worlds NGL superpower. This was the country where gas cylinder containers were
invented, enabling the commercialisation of LPG, and the country which first saw the processing of
natural gas to produce gas plant LPG and other products. The USA has traditionally been by far the
largestproducerof NGLs andconsumer ofLPG and naphtha, although lookingaheadthis preeminent
positionmightwhither.
TheUSAhasaverydrysalesgasspecandadynamicandcompetitiveinvestmentenvironmentforthe
midstream sector. During the recent recession, the midstream industry has consolidated even more,
continuing the structural change from the turn of the millennium. With more liquids production from
shalegas,andthelocationofnaturalgasproductionchanging,themidstreamcompaniesareracingto
keepupwiththespeedofinvestmentinupstreamnaturalgas.
EnterpriseisthebiggestmidstreamplayerinTexas,andholds500kb/doffractionationcapacityateight
NGLfractionatorsalongtheUSGulfcoast,allofwhicharereportedlyrunningnearcapacityduetonew
shale gas production. Two new NGL pipelines, the 110kb/d Overland Pass and the 160kb/d Arbuckle
pipeline are increasing the supplies to the Gulf coast. Enterprise built a new 75kb/d fractionator in
Hobbs inGainesCounty,Texasin2007.In2008 Enterprise also builtanew70kb/d fractionatorcalled
the Meeker expansion in the Rio Blanco county in Colorado. Enterprise plans to build a new 75kb/d
fractionatornearMtBelvieuthatwilltaketheNGLfractionationcapacityintheareaupto600kb/dby
2011.
TherehasbeensomeevidenceofasupplyglutofLPGintheUSArecently,assuppliesgrewin2008and
thepetrochemicalindustrywashitbytherecession.ThebulkofUSLPG,ethaneandnaphthademandis
inthepetrochemicalsector,andbutaneisalsousedasagasolineblendingcomponentinthewinter.In
thesummerof2009theUSAreportedlyexportedpropaneforthefirsttime,whileitwaspreviouslyan
importerofLPGallyeararound,holdingbyfarthehighestLPGstoragecapacityintheworldinthe15mt
(174mb)MtBelvieusaltcaverns.HoweverastrongermarkethasbeenevidentinLatinAmericaduring

31
2009, as both Mexican and Argentinean export volumes have fallen, supporting prices somewhat. The
demandforethaneandpropaneisincreasingaspreviousheavycrackersareconvertedtobeabletouse
lighterethaneandpropanefeedstockstreams.
kboe/d USA NGL production
TheoutlookforNGLproduction 15,000 25%
US NGL production is forecast to decline from the 2009

levelof1885kb/dto1741kb/din2015,whichisnotfar 10,000
fromthe2008productionfigure.TheNGLoutlookforthe 20%
USA has been revised down from that contained in the 5,000
June 2009 MTOMR. Both the WEO2009 and EIA
projections now envisage declining gas production in
0 15%
contrasttothemoreoptimisticgaspictureinourearlier
projections. The liquids ratio is assumed to continue its 2000 2003 2006 2009 2012 2015
slightdownwardtrend,duetoahighershareofshalegas Natural gas kboe/d
NGL kb/d
and coal bed methane. The main uncertainly to the
forecasthoweveristheoutlookforUSnaturalgasproduction,theimpactofunconventionalgasonthe
liquidsratiogoingforwardandthespreadbetweenNGLandnaturalgasprices.
5.1.2 Canada
Naturalgasproduction in Canada isexpectedtodeclineby 1% annuallyoverthe forecast periodfrom
175bcmin2008to166bcmin2015,whilethecontributionfromunconventionalgasresourcesissetto
increaseslightlyfrom58bcmto60bcm.TheWestCanadiansedimentarybasincoversAlbertaandparts
ofSaskatchewanandBritishColumbia.Thesethreeprovinceshouse97%ofthemarketedgasproduction
ofCanada.
Canada, like the USA, shows a massive decline in traditional natural gas production being replaced by
unconventional gas production, mainly shale gas and coal bed methane. Canada is a country which
combinesthetrendoflessliquidspronenewsourcesofgas,withatthesametimebetterutilisationof
associatedgas.Theassociatedgasfromoilsandsproductionhaspreviouslynotbeenwellexploitedbut
technologyandinvestmentstomarketNGLsfromoilsandsarenowontheway.Themapbelowshows
howtheshalegasbasinsofNorthAmericastraddleCanadaandtheUSA.Thehighgrowthinshalegas
production in the USA has prompted optimism with regard to the potential development of similar
resources in Canada. Today, efforts are ongoing to assess shale gas prospects in northeast British
Columbia(HornRiverBasinandtheMontneyFormation),southernAlbertaandSaskatchewan(Colorado
shale),Quebec(Uticashale),andAtlanticCanada(WindsorGroupshales).However,duetothecurrent
North American gas glut and low gas prices, high growth in Canadian shale gas production is not
expectedovertheforecastperiod.ThenaturalgasproductioninCanadafor2009showsalullcompared
to2008figuresandthe2010forecasteitherside,asCanadiangasexportstotheUSAhavebeenhitby
lowerUSimportneeds.
Canada production outlook for natural gas and NGLs

NGL (kbd) 699 655 636 622 610 597 585 573 -126 -2.8 %
NGL to gas ratio 23.2% 20.3% 21.2% 21.0% 20.7% 20.5% 20.2% 20.0%

32
Source:NationalEnergyBoard(NEB)

The Canadian government report an NGL figure for 2008 of 699kb/d that includes gas plant ethane,
propane, butane, pentane and gas plant condensate, a definition of NGLs that is consistent with our
preferredNGLdefinitionfornonOPECcountries.
Like the USA, Canada has an elaborate infrastructure to gather and process natural gas, with a high
quantityofgasprocessingplants.79%ofthemarketedproductionofnaturalgasinCanadacomesfrom
Alberta,and91%oftheNGLproduction.Thecurrentproductionfromshalegasandcoalbedmethane
depositsalsotakesplaceinthisprovince.AsnaturalgasandNGLproductiondataareonlydisaggregated
onaprovincelevelitishardtoassesstheimpactthatunconventionalgashashadontheliquidsratioin
Canada,butitisassumedthattheimpactiscomparabletothatobservedintheUSA.Theliquidsratioof
Canadawas23%in2008,fairlystablefrom2000.
TheoutlookforNGLproduction
Canadian NGL production is forecast at Canada NGL production
kboe/d
573kb/d in 2015, implying a decline by an
averageof3%annuallyfrom2008to2015. 4,000
Two factors in Canada might have a 3,000 40%
negativeimpactontheliquidsratio.Thatis
2,000
the higher share of nonconventional gas, 20%
notablytheeffectofcoalbedmethane,and 1,000
secondly lower rates of associated gas 0 0%
production from oil sands as compared to 2000 2002 2004 2006 2008 2010 2012 2014
other oil production. Despite this, the
associatedgasfromoilsandshaspreviously Natural gas kboe/d
NGL kb/d
NGL to gas ratio (RHS)

33
notbeenwellexploitedbuttechnologyandinvestmentstomarketNGLsfromoilsandsarenowonthe
way.
TheNationalEnergyBoardofCanadaexpectstheNGLproductiontofallby185kb/dfrom2007to2020.
ThiswouldimplyanannualreductioninNGLproductionconformingtoourprojection.
5.1.3 Mexico
From2008to2015theWEOforecaststhatMexicangasproductionwillremainflatat55bcmfrom2009
to2015,followingagrowthfrom52bcmto56bcmfrom2008to2009.Theshareofassociatedgasis
expected to decline as compared to nonassociated gas, partly because oil production is forecast to
declineby5%annuallyovertheforecastperiod.
Mexicoisanexampleofacountrywherenonassociatedgasismarkedlydrierthanassociatedgas.Over
thelasttenyearstheshareofnonassociatedgashasincreased,andthishascausedtheliquidscontent
to decline from 71% in 1998 and 1999 to 41% in 2008. However, over the years 20042007 the
production of associated gas increased in spite of the fact that the oil production decreased, but at a
muchlowerratethannonassociatedgas.AssociatedgasproductioninMexicoincreasedbyanaverage
of5%peryearduring20042007,inaperiodwhereoilproductionfellbyanaverageof3%peryear.This
isassumedtobepartlyduetobetterutilisationofassociatedgas.PEMEXlaunchedplanstoimproveits
utilisationrateforassociatedgasduringtheseyears,includingcurbingofflaring.However,flaringfigures
fromtheWorldBankshowanincreasefrom0.9bcmin2005to2.6bcmin2008anditisindicatedthat
flaringin2009ismuchhigherthanthat,especiallyfromtheCantarellfield.ThereasonisthatPemexhas
injected nitrogen into the reservoir for many years to maintain pressure, and the produced gas now
contains more nitrogen than can be separated by currently installed processing facilities. The non
associatednaturalgasproductionofMexicoincreasedbyanaverageof19%duringthesameperiod.
Mexicannaturalgasproductionincreasedbyanaverageof4%annuallyfrom2000to2008,andby9%
annuallyfrom2004to2007.From2004to2008theshareofnonassociatedgasrosefrom34%to43%,
correspondingto24bcmofmarketedproductionin2008.Nearlyallthenonassociatedgasproduction
inMexicoisintheNorth,notablyfromtheBurgosbasinandnearbyfields,andisbeingprocessedatthe
Burgosgasplant.OthernonassociatedgasisproducedinMacuspana,Veracruz,MisantlaandTampico
furthersouthintheNorthernregionandarebeingprocessedattheArenqueandPozaRicaplantsnear
Veracruz.TheBurgosbasinhadaproductionatstartupin1999of10bcm,andthisproductionincreased
to 15bcm in 2009. The ratio derived from dividing the estimated liquids production from the Burgos
plantsaswellastheVeracruzplantsbytotalNortherngasproductionisa7%liquidsratio,whileforthe
rest of the country this is estimated at 70%, generally the sort of ratio that Mexican gas had in 1998,
beforetheBurgosbasincameintoproduction.
Mexico production outlook for natural gas and NGLs

Gas production (bcm) 52 56 56 55 55 55 55 55 3 0.9 %
Gas production (kboe/d) 899 957 958 956 956 955 955 955 56 0.9 %
NGL (kbd) 365 370 377 377 377 377 377 377 12 0.5 %
NGL to gas ratio 40.6% 38.7% 39.4% 39.5% 39.5% 39.5% 39.5% 39.5%

TheOMRbaselinedataforMexicoarebasedonPemexNGLreporting.Thetotalfigureof365kb/dfor

34
2008includesthegasplantLPG,ethane,gasolineandothers.Notincludedinthefigureis54kb/doffield
condensate,asthesevolumesarereportedtogetherwithcrudeoilproduction.
AccordingtotheOilandGasJournal(OGJ),Mexicohaseightgasprocessingplants,ofwhichtheCactus
plant and the Nuevo Pemex plants in the south east are by far the most important in terms of NGL
production.80%oftheNGLsproducedinMexicocomefromthosetwoplants,accordingtoOGJ.
Source:Pemex

TheNGLproductionofMexicoisforecasttoremainflatat377kb/dovertheforecastperiod2015,atthe
samelevelasattheendof2009.LookingatprovenreservesforMexico,theshareofNGLsascompared
to natural gas is 47%, higher than the current share of production. If we look at the Northern region,
wheremostofthenonassociatedgasislocated,theNGLtonaturalgasreserveratiois36%.Thecurrent
rate of 40% liquids recovery could therefore be sustained going forward. This implies the following
assumptions: Associated gas production falls by 2% annually. The liquids ratio of associated gas is
assumedconstantat65%.Theliquidsratioofnonassociatedgasincreasesfrom5%in2008to13%in
2015. These assumptions gave an NGL profile in line with existing OMR/MTOMR estimates, and the
productionforecastwasnotrevisedforthiscountry.
Mexico NGL production
kboe/d
Going forward, the associated gas production is 1,200 80%
assumed to decline less than oil production, while the 1,000
70%
nonassociatedgasincreasestomakeupthebalanceof 60%
800
the total Mexico natural gas production forecast from 50%
600 40%
the WEO. The liquids content in associated gas is
30%
assumed to remain constant, while the liquids content 400
20%
ofnonassociatedgasrisestoaccountforthefactthat 200
10%
other sources of nonassociated gas are unlikely to be 0 0%
asdryastheBurgosbasingas. 2000 2002 2004 2006 2008 2010 2012 2014
Natural gas kboe/d NGL kb/d


35
5.2 Eurasia
The geographical aggregation of Eurasia is selected due to a lack of a more disaggregated data break
down between associated/ nonassociated gas production and unconventional gas production on a
lower level than Eurasia in the WEO2009 natural gas forecast. The region holds 60.3tcm of proven
reserves,33%oftheworldtotal.90%ofthereservesareheldintheFormerSovietUnion,withRussian
reservesaloneaccountingfor44.9tcm.TurkmenistanandNorwaybothhave3tcmofprovedreserves,
although the total resource potential of Turkmenistan is probably much higher. The reserves estimate
hasbeenstablesince2000.FromasupplypointofviewEurasiaconsistsbroadlyofthetworegionsthe
NorthSeaandRussia/Caspian.Naturalgassupplyfromtheregionisforecasttoreturnto2008annual
levelsof1.2tcmovertheforecastperiodafterafallto1.1tcmin2009.Theunconventionalgasinthis
regionconsistsofRussiantightgas,andisforecasttoremainminor,risingfrom22to24bcm,whilethe
shareofassociatedgasfallsslightlyfrom21%to19%oftotalconventionalgasproduction.
NGL production increases by 324kb/d from 1.8 to 2.1mb/d, with growth in Russia and Kazakhstan of
281kb/d and 106kb/d respectively offset mainly by a decline in OECD Europe of 76kb/d over the
forecast period. UK NGL output declines by 65kb/d over the forecast period, while Norwegian
productionremainsstable.
ThemaingastrendobservedinthisregionisforanincreasingshareofgascondensatefieldsinNorway
and the UK, making NGL production decline more gradually than crude oil. In Norway natural gas
productionrisesovertheforecastperiod,whileitfallsintheUK,explainingthedifferentoutlookofthe
two countries. The increasing liquids ratio forboth isrelatedtothedevelopment of deeperreservoirs
withhigherpressureandtemperature,oftencontainingmorecondensateandotherNGLs.
Eurasia natural gas Eurasia NGLs

bcm
mboe/d
1,400 50%
25 12%
1,200
40%
1,000 20 11%
800 30% 15 10%

600 20% 10 9%
400
10% 5 8%
200
- 0% - 7%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2004 2006 2008 2010 2012 2014
Unconventional gas Conventional gas Natural gas (mboe/d) NGLs (mb/d)
Share of associated gas Liquids ratio (RHS)

ForRussia,themaintrendisbetterutilisationofassociatedgasandlowerlevelsofflaring.Evenalthough
naturalgasproductioninRussiaisexpectedtoremainflatovertheforecastperiod,abetterutilisationof
associated gas means more NGLs and a much higher produced liquids ratio in associated gas for this
country over the outlook period. Nonassociated Russian gas has traditionally been very dry, coming
from shallowreservoirs, but thesesources arebeingcomplemented bymoreliquidsprone production
from deeper reservoirs, supporting the liquids ratio. In Kazakhstan the growth comes mainly from the
nextdevelopmentphaseoftheKarachaganakfield,assumedtoyield94kb/dofcondensateby2012.

36
5.2.1 Norway
NaturalgasproductioninNorwayisincreasing,with2%annualgrowthexpectedfrom103bcmin2008
to120bcmin2015.TheliquidsratioofNorwayhasbeendecliningfroma2001levelof31%toacurrent
levelof20%excludingfieldcondensate,althoughincludingcondensatetheliquidsratiohasbeenrather
stableataround30%.
Thetwomostimportantnewgas fields inNorwayareGja (2010)andSkarv(2011),butalsoTyrihans

(2009),VegaandVegaSr(2010),Morvin(2010)andVolund(2009)willalsocontributeincrementalgas
andNGLproductionintheyearstocome.TheNGLtogasratioofrecoverablereservesforthesefields
togetheris26%,and29%ifcondensateisincluded.Otherfinds/possiblefuturedevelopmentsalsohave
comparableliquidsratios.
Norway production outlook for natural gas and NGLs

Gas production (kboe/d) 1,775 1,789 1,845 1,897 1,946 1,991 2,032 2,070 295 2.2 %
NGL (kb/d) 527 533 536 529 532 531 528 526 -1 0.0 %
NGL to gas ratio 29.7% 29.8% 29.1% 27.9% 27.3% 26.7% 26.0% 25.4%

TheNGLproductionforNorwayisforecasttoremainflatovertheforecastperiodataround530kb/d.
The source for Norwegian NGL data is the Norwegian Petroleum Directorate (NPD), which publishes
monthlyproductiondataforcondensateandotherNGLsperfield.ThecondensatefromKristin,Mikkel
and sgard is blended with oil and marketed as the Halten blend. These condensate volumes were
earlierreportedwiththeNorwegiantotalcondensatefigures,andarestillincludedamongtheseinthe
condensatefiguresforNorwayreportedintheOMR,forthesakeofseriescontinuity.Theoilproduction
from these three fields, about 110kb/d, accounts for the difference between the NPD and OMR NGL
figures.
InNorwayNGLsaremainlyextractedandfractionatedatthegasplantKrstatthesouthwesterncoast
of Norway, which, with a capacity to produce more than 170kb/d of LPG and ethane and 90kb/d of
condensate,mainlyforexport,isoneoftheworldslargestLPGexportterminals.Mostofthefieldsin
theNorthSeathatproducerichgasdelivertoKrst;theGullfaksfields,Heidrun,Jotun,Mikkel,Norne,
Sigyn,Sleipnerfields,Statfjordfields,Urd,Volveandsgard.Thesecondmostimportantgasprocessing
facility in Norway is the Kollsnes/Mongstad/Vestprosess complex which process both dry and rich gas
fromthefieldsFram,Kvitebjrn,Kristin,Troll,TyrihansandVisund.TheLPGvolumesfromthisplantare
handled and sold together with refinery LPG from the Mongstad refinery. The Nyhamna gas plant
extractsandexportscondensatefromtheOrmenLangefield,whilebothcondensateandLPGaresold
fromtheSnhvitLNGplantintheBarentsSea.SomeNorwegianrichgasisalsoprocessedatTeesidein
the UK, as the natural gas from the fields Eldfisk, Ekofisk, Tor, Valhall, Brae and Skirne is piped there,
whilerichgasfromthefieldsHeimdalandtheStatfjordLatelifeareshippedtoStFergusintheUKbythe
FLAGS pipeline. As a marketer of the substantial LPG volumes exported from these facilities, including
theirown,statePetorosandthirdpartyvolumes,Statoilclaimstotrade15%oftheglobalwaterborne
LPGmarket.

37
Source:Gassco

OilproductioninNorwayisindecline,withanassumedaveragedeclineof5%peryearovertheforecast
period.AdeclineinassociatedgasproductioninNorwayhasanegativeimpactontheliquidsratio.The
developmentofdeeperandmorecomplexreservoirsthatoftencontaincondensateshoweverwillhelp
counteract this trend. The Norwegian natural
gasgiantTrollfieldproducesdrygas. Norway NGL production
kboe/d
2,500 70%
None of the NGL facilities listed above plan
expansions, possibly with the exception of a 2,000
50%
Snhvit LNG train 2 (not included in the 1,500
forecast) reflecting the maturity of this 30%
1,000
producing region. The Krst plant is currently
10%
under an upgrading programme named KEP 500
2010, although the upgrade is aimed at 0 -10%

securing regularity and safety, rather than 2000 2003 2006 2009 2012 2015
Natural gas kboe/d
capacityexpansion. NGL kb/d

38
The NPD expects the NGL production to remain fairly constant over the next five years (statement
from2009).TheNPDalsorecentlypublishedanoutlookwithforecastsrunningforwardto2013.Inthis
projection, NGL production from Norway has been kept in line with the level suggested by NPD. After
2013,NGLsupplyhasbeenheldflat,butallinall,theNorwegian2014NGLforecasthasbeenrevisedup
by97kb/dcomparedwiththe2009MTOMRprojection.
5.2.2 Denmark
Danish natural gas production is forecast to fall by an average of 8% annuallyfrom 10bcm in 2008to
6bcm in 2015. Denmark does not report NGL or condensate production, but is believed to extract
condensatefromthewellstreamsattheTyrastprocessingfacility/fieldcentre,andattheNybrogas
treatmentplant.Thecondensatevolumesarelikelyreportedalongwithcrudeoil.
ThenaturalgasproductioninfrastructureontheDanishcontinentalshelfisfocusedaroundtheTyrafield
complex which receives gas from all gas producing fields off Denmark. Tyra Vest receives parts of the
naturalgasproductionfromtheHalfdanandValdemarfields.TyrastreceivesgasfromtheValdemar
satellites, Roar, Svend, Tyra Sydst and Harald/Lulita, as well as the natural gas from Gorm, Dan and
partsofHalfdan.AtTyrastthereisaprocessing facilitythatincludesafacility forpreparationofoil,
condensate,gasandwater.Thewaterisreturnedtotheseaaftercleansingattheplatform.
OilandcondensateproductionfromtheTyrafieldandsatellitesareledtoshoreviaGorm.Mostofthe
naturalgasproductionisfedfromTyrasttotheNybroGasTreatmentplantandtherestisexported
fromTyraVesttotheNOGATpipelinetotheNetherlands.

Source:TheDanishEnergyAgency

39
5.2.3 UK
UK oil production has fallen by 7% annually from 2000 to 2008, while the natural gas production has
fallenby6%annuallyinthesameperiod.Bothareexpectedtocontinuefallingby7%annuallyoverthe
forecastperiod.However,NGLshavebeenmoreresilientandhavefallenonlyby2%annuallyfrom2000
to2008.Infact,manynewfieldsthatcameonstreamin2008weregascondensatefields,andmorenew
gascondensatefieldsareexpectedtocomeonstreamintheyearstocome.Among5060fieldsthatare
expectedtocomeonstreamfrom2009andonwards,tenaregascondensatefieldsandninearegas/oil
fieldsthat probablyhold someNGLsaswell, reflectingthetrendof more condensate inthe deep and
complexreservoirsthatarenowbeingdeveloped.
The current NGL profile for the UK included in OMR comprises NGL and gas plant condensate as
publishedbytheDepartmentofEnergyandClimateChange.The2008productionfigurewas215kb/d,
fallingfromapeakof271kb/din2002.
IntheUK,thereareapproximately470offshoreoilandgasinstallations.Thesearemainlylocatedinthe
Northern,CentralandSouthernNorthSea,aswellasinthewaterswestofShetlandandintheIrishSea.
Thenaturalgasispipedtoonshoregasprocessingfacilitiesviabroadlyspeakingfourtrunklinesystems
thatalsobringingasfromsomeoftheNorwegianNorthSeafields.InfacttheBritishandtheNorwegian
continentalshelvesarehighlyintegratedwithsomefieldsstraddlingbothcountries,liketheMurchison
fieldandtheStatfjordfield,whichhascausedsomereservoirdeterminationissuesinthepast.
The most important NGL producing system in the UK is the Shell Expro Gas and Associated Liquids
ProcessSystem(SEGAL)whichcomprisestheFarNorthLiquidsandAssociatedGassystem(FLAGS)and
FulmarpipelinesthatbringinnaturalgasfromtheBrentfields.ThenaturalgasislandedattheSt.Fergus
gas processing facility and the NGLs extracted there are sent south to the Mossmorran NGL plant for
fractionation.TheLPGandothergasplantproductsarethenexportedfromtheBraefootBayterminal,
whichmayhandleabout170kb/dofNGLsandisthemostimportantNorthSeaLPGexportterminalnext
to Krst. The Forties pipeline system transports oil and gas liquids to the Kinneil gasprocessing and
stabilisation plant at Grangemouth which has an output capacity of about 40kb/d. Production from
around 25 fields in the central North Sea is connected by this trunk line, either through the Forties C
platformorthenewUnityplatform.ThethirdsystembringsrichgastoTeesidethroughtheCentralArea
Transmission system (CATS) as well as through Norpipe. The fields brought in here are the Everest,
Lomond,JBlock,ArmadaArea,Andrew,Banff,ETAPandErskinefields,aswellassomeNorwegianNorth
Seafields.ThevolumesbroughtinviaNorpipearefromFulmar,Auk,ClydeandGannet.About10kb/d
ofNGLsmaybeextractedatTeeside.
UK production outlook for natural gas and NGLs

Gas production (kboe/d) 1,265 1,222 1,135 1,052 973 897 826 759 -505 -7.0 %
NGL (kb/d) 215 179 174 176 180 170 160 150 -65 -5.0 %
NGL to gas ratio 17.0% 14.6% 15.3% 16.7% 18.5% 18.9% 19.4% 19.8%

40
Source:BP

FortheUKwehaveretainedtheexistingOMR/MTOMRNGLforecast,whichimpliesalowerdeclinefor
NGLsthanforoilandgas.Thisreflectsthetrendofmoregascondensatefieldsbeingdevelopedinthe
maturephaseofthisregion.Totalproductionaverages215kb/din2008,fallingto150kb/din2015.

41
5.2.4 Netherlands
AccordingtotheWEO2009forecast,naturalgasproductionfromtheNetherlandsissettodecreaseby
anaverageof2%annuallyfrom85bcmin2008to71bcmin2015.OnlyonethirdofNetherlandsnatural
gasproductionnowcomes fromthehitherto dominantGroningen field. The small field strategy has
beensuccessful,wherebythedeclineinthelargeGroningenfieldisreplacedbyanendlessstreamof
small onshore and offshore gas developments. Between 2008 and 2010 the Netherlands will put nine
newfieldsonstream,andsevenmorefieldsareduetocomeonstreamby2014.
TNO, Geological Survey of the Netherlands, publish field by field production data on the webpage
www.nlog.nl.TheNetherlandshasverysmallNGLproductioncomparedtoitsgasproduction.Overthe
forecastperiodtheNGLproductionfromtheNetherlandsisforecasttofallfrom9kb/din2009to6kb/d
in2015.TheNGLproductionconsistsonlyofcondensate,andnocentralgasprocessingplantexistsfor
the Netherlands. The tiny condensate production from the Netherlands is collected from the rich gas
streams of almost 270 individual fields, at the beaching points for offshore fields or at field level for
onshore fields, and transported to refineriesbytrucksortrain. At theRijnoffshore oil field(P15)the
condensate from associated gas is separated and brought by oilpipeline to theRotterdamarea,while
drygas istransportedin agaspipeline.Sometimes nitrogen is alsoblended withthegas toadjustthe
heating value of the gas to the spec set for the gas distribution network (GTS). Our forecast implies a
continuationinthetrendwehaveseensince2000ofafallingliquidstogasratio.
Netherlands production outlook for natural gas and NGLs

NGL (kb/d) 9 9 9 9 8 7 6 6 -3 -6.6 %
NGL to gas ratio 0.6% 0.7% 0.7% 0.7% 0.6% 0.6% 0.5% 0.5%

5.3 RussiaandtheCaspianregion
NaturalGasLiquidsintheFormerSovietUnion
NGLswereoftenaforgottencomponentofnaturalgasproductionintheSovietUnion.Themainreason
forthisisthesubstantialvolumesofverydrygas(fromCenomanianagereservoirsinWestSiberia)as
wellasindifferencetothepotentialoftheassociatedgasliquids.Theabsenceofequipment,dedicated
pipelines and markets in the natural gas sector means that the Russian gas industry remains largely
focusedonpipelinegas.AfterthefalloftheSovietUnion,theregionsNGLbusinessdeteriorated,and
outputofLPGalmosthalvedbetween1990and1994.ASovietinitiativetouseLPGasautogaswasidled
duringtheseyears.
Logistical issues and high transportation costs have limited market access and been an obstacle to
Russian NGL output growth. Some specialpurpose pipelines exist for transportation of NGLs from gas
processingplantstopetrochemicalplantsetc,butotherwiserailtransportationisthedominantlogistical
solution for LPG in Russia, supplemented by road transportation on trucks and waterborne tanker
vessels.Inthe1960sRussiastartedshipmentsofLPGfromtheBalticSeatoEurope,andevenoverthe
Atlantic to Cuba. For some time an NGL pipeline across the Urals provided a partial solution to the
problemofNGLtransportationinRussia.ThepipelinetransportedsocalledShFLU(broadfraction,a
kindofrawNGLmix)fromtheEasttopetrochemicalplantsintheWest.However,thepipelinesuffereda
devastating explosion in June 1989 near Ufa, with over 100 fatalities, lit by the spark from a passing
TransSiberiantrain,andhasneveragainoperatedbeyondTobolsk.

42
However,severalfactorscouldmakeNGLsfromtheFormerSovietUnionmoreimportantinthefuture
The nature of Russian gas supply, as deeper, more NGLrich gas production horizons are
complementingthemorematureCenomanianreservoirsthatareindecline.
Environmental legislation that requires flaring of associated gas to decrease drastically. The
targetis95%utilisationofassociatedgasby2011.
TheparticipationofInternationalOilCompaniesthatplancondensateandNGLextractionasan
integratedpartofthenaturalgasvaluechain,sofarmostnotablyinAzerbaijanandKazakhstan.
5.3.1 Russia
Russia marketed a total of 657bcm of natural gas in 2008, making it the worlds largest producer.
Russian gas production fell sharply in 2009, as a consequence of recessionhit gas demand, but is
expectedtoreboundagainovertheforecastperiodandreach655bcmin2015.
In Russia, the bulk of natural gas production is nonassociated, very light and clean gas that requires
almostnogasprocessingatall,butmaybefeddirectlyintopipelines.However,astraditionalreservoirs
arebeingdepleted,developmentofdeeperreservoirsyieldsmoreliquidspronenaturalgasthatrequires
processingbutatthesametimemayaddvaluablebyproducts.Thequotebelowfromthe2008Annual
reportofNovatekillustratesthisdevelopment.
Currently,RussiahasfewerknowndepositsofeasilydevelopeddryCenomaniangaswhichisalmost
100% pure methane and does not require additional processing. In recent years, there has been an
increase in the discovery and development of deeper deposits of so called wet gas from Valanginian
andAchimovhorizonswhichalsoyieldsvaluablegascondensatebutrequiresadditionalprocessing.Our
new plant removes current and future processing capacity constraints enabling us to optimize the
developmentofourfields.
AccordingtoreportingfromtheMinistryofOilandEnergyinRussia,theproductionofassociatedgasin
Russiawas 55bcm in 2009. The World Bank estimatedthat 40bcm ofRussiangaswas flared in 2008,
down from 50bcm in 2007. An upcoming ban on flaring of associated gas as well as a change in the
monopoly position of Gazprom and Sibur on gas processing and transportation is already about to
changethesceneforassociatedgasproductioninRussia.InFebruary2008thegovernmentliberalised
prices for associated gas and established a 95% utilisation target by 2011, accompanied by tougher
penaltiesforflaring.
Russia production outlook for natural gas and NGLs

Gas production (bcm) 657 590 596 607 618 628 637 655 -2 0.0 %
Gas production (kboe/d) 11,322 10,167 10,264 10,461 10,645 10,820 10,986 11,288 -34 0.0 %
NGL (kbd) 536 589 627 662 698 735 772 817 281 6.2 %
NGL to gas ratio 4.7% 5.8% 6.1% 6.3% 6.6% 6.8% 7.0% 7.2%

NGLs in Russia are often referred to as Shirokaya Fraktsiya Legkikh Uglevodorodov (ShFLU). This is a
widefraction, light hydrocarbon mixture, the basic constituent of LPG, fractionated at petrochemical

43
plants or refineries. ShFLU has a yield of up to 70% LPG. LPG in Russia is referred to as Szhizhennyye
UglevodorodnyyeGazy(SUG).
ShFLUmustbesoldtocustomersthathavetheequipmenttobreakitdownintoitscomponents,often
petrochemical plants. Those may then produce LPG from ShFLU. For this reason 34% of Russias LPG
productioncomesfromfourpetrochemicalplants.RussiaalsoexportsShFLUasaquasirawmaterialfor
furtherprocessinginEurope,especiallytoPoland.
The Russian Ministry of Oil and Energy does not report NGLs per se, but they do report LPG and
condensateproductionpercompany.InthisstudywehaveappliedthereportsofLPGandcondensate
productionpercompanyasastartingpointtoarriveataproxyforRussianNGLproduction.Basedonthe
reportedfiguresatAugust2009theLPGproductionofRussiangasprocessingplantswas230kb/d,while
thecondensateproductionwas361kb/d,atotalof591kb/d.Forcondensate,thetwobigproducersare
Gazprom and Novatek at about 240kb/d and 70kb/d respectively in 2009. For LPG the number of
significant producing companies is higher, the biggest of which are Gazprom, Sibur (the natural gas
processingarmofGazprom)andLukoil.Theoverviewbelowshowsmajorgasplantsandtheirestimated
capacitytoprocessgasandextractvariousNGLs.Theoverviewisbasedonvariouswebsitesetc,andis
assumed to be incomplete. For Gazprom the figures in the table are the reported production per
August2009.
NGL from Russian gas processing plants
Gas processing 2009 production
Companies Facility Product
capacity (bcm/y) capacity (kb/d)
Lukoil Korobkovsky GPP 0.5 LPG 3.2
ShFLU 2.2
Lokosovsky GPP 2.3 LPG 16.4
ShFLU 11.2
Sibur-Neftehim - Perm GPP 0.5 LPG 3.6
ShFLU 2.5
Usinsk GPP 0.5 LPG 3.8
ShFLU 2.6
Lukoil Total 3.8 45.4
Sibur Belozerny GPP, train 1,2 4.3 LPG 19.0
Nizhnevartovsk, train 1-4 8.6 LPG 19.0
Yuzhno Balyksky GPP 1.5 LPG 15.0
Yuzhno Balyksky- expansion 1.5 LPG 15.0
Gubinsky GPP 2.1 LPG 11.0
Vyngapurovsky gas plant 2.1 LPG 11.0
Nyagangazpererabotka unknown LPG 7.0
Sibur Total 20.1 97.0
Novatek Purovskiy Condensate stabilization plant 3 Condensate 35.0
LPG 20.0
Novatek Total 3 55.0
Rosneft Otradensky 1 Ethane 2.0
ShFLU 3.9
Neftegorsky 1 Ethane 2.0
ShFLU 3.9
Rosneft Total 2 11.9
Gazprom Various Gazprom 52.5 Condensate 237.0
LPG 68.0
Gazprom Total 52.5 305.0
Tatneft Tatneft Gazpererabotka (incl Minnibaevo GPP) 0.4 Ethane 4.0
LPG 11.0
Tatneft Total 0.4 15.0
Surgutneftegaz Surgutneftegas 7.2 LPG 7.0
Surgutneftegaz Total 7.2 7.0
Grand Total 89.0 536.3
Source: Web pages and annual reports of the companies

The total estimated feed handling capacity for all these gas processing plants is 89bcm. The Russian
MinistryofOilandEnergyreportedmarketedRussianassociatedgasof55bcminlate2009.Someofthe
gas processing plants, notably Novateks plant treat liquidsrich nonassociated gas and not
associatedgas.

44
TherevampedforecastforNGLproductionforRussiaisthemostelaborateofthoseconductedduring
thisstudy.TheforecastsetstheNGLoutputtoincreasefroma2008levelof536kb/dtoa2015levelof
817kb/d,acompoundedannualgrowthfrom2008to2015of6.2%.ThiscompareswithMTOMRJune
2009estimatesof470and561kb/drespectively.
Theparametersoftheforecastare
GasproductionforecastfromWEO2009,
Currentflaringofassociatedgasandtheassumedreductioninflaring,increasingthecomponent
ofassociatedgasinthetotalnaturalgasproduction,and
Liquids content in each category, and especially the evolution of liquids content in non
associatedgas.
ThesplitofNGLsbetweencondensateandotherNGLsisassumedtobeconstantasoftotalliquidsfrom
naturalgasproductionovertime.Thetablebelowshowstheassumedliquidsratiosinassociatedversus
nonassociatedgas.
Assumed liquids content and volumes of Russian associated vs non-associated gas

2008 2009 2010 2011 2012 2013 2014 2015
Associated gas (bcm) 51.0 55.0 58.0 61.2 64.6 68.1 71.9 75.8
Liquids content 29.5% 29.5% 29.5% 29.5% 29.5% 29.5% 29.5% 29.5%
Non associated gas (bcm) 606.0 535.0 537.6 545.8 553.1 559.7 565.6 579.2
Liquids content 3.3% 3.4% 3.6% 3.7% 3.9% 4.0% 4.2% 4.3%

Associatedgas
RecentestimatesforassociatedgasproductionfromRussiaindicate55bcm,alevelthatisassumedto
growannuallywiththeassumedreductioninflaring.Accordingtoofficiallyreporteddataassociatedgas
productioninRussiahasincreasedby7%in2009whenoverallRussiangasproductionhasfallenby10%.
However, this makes sense not only due to the reduction in flaring, but also due to the increase in
Russian oil production over 2009. That is an important reason why we see Russian NGL production
increasinginayearwheregasproductionisgoingdownconsiderably.
Flaring
For estimates of how much associated gas that Russia NGL production
Russia currently flares, the World Bank has kboe/d
12,000 8%
publisheddatashowing 40bcm in2008.Official
data from Russia is quoted to state that only 10,000 6%
15bcm of associated gas is flared in Russia. 8,000
Industry sources envisage flaring of associated 6,000 4%
gas may be reduced by 2530bcm over the 4,000
coming years. According to the World Bank 2%
2,000
Russia reduced flaring by 10bcm from 2007 to
0 0%
2008.Thisreportassumesflaringtobereduced 2000 2002 2004 2006 2008 2010 2012 2014
byanother21bcmfrom2009to2015increasing Natural gas kboe/d NGL kb/d
associated gas production of Russia to 76bcm. NGL to gas ratio (RHS)
As mentioned earlier in the report, the World
Bankflaringestimateisuncertain,notatleastduetotheshortcomingoftheirmethodstoidentifythe
compositionofthegasthatisbeingflared,henceahighcontentofliquidsinthegasflaredcouldpossibly
inflatetheestimateofthevolumeofnaturalgasbeingflared.

45
Liquidscontentineachcategory
FortheliquidscontentofnonassociatedgasGazpromproductionofLPGandcondensatedividedbythe
totalnonassociatedgasproductionofRussiahasbeenused,expressedinbarrelsofoilequivalent.For
theliquidscontentofassociatedgasnonGazpromgasplantproductionofLPGandcondensatedivided
by the total nonassociated gas production of Russia has been employed expressed in barrels of oil
equivalent. The liquids content in nonassociated gas is assumed to increase by 0.15 percentage point
per year over the forecast period, while the liquids content of associated gas in Russia is expected to
remainconstant.
Limitationsongrowth
The primary limitation on NGL expansion in Russia has always been unattractive domestic pricing,
difficult exports, a lack of third party access to pipelines and limited investments in midstream
infrastructure.
However,itappearstheneededpolicychangesarealreadyhappening,withmanygasprocessingplant
projects being announced and a policy change under way or already implemented as to thirdparty
accesstopipelines.Notably,theexpansionofthePurovskygasprocessingplantofNovatekisexpected
todoubleNovatek'scapacitytoextractNGLsfromitsgasovertheforecastperiod.
5.3.2 Kazakhstan
Kazakhstaninaturalgasproductionisforecasttogrowby7.6%annuallyovertheforecastperiod,from
26bcm in 2008 to 43bcm in 2015. Kazakhstan reinjects most of its associated gas to support oil
production,whiletheKarachaganakfieldisthemostimportantproducerofnaturalgas.Overtherecent
years sales gas has been less than 50% of total reported output, as most of the balance has been re
injectedtosupportoilproduction.Withtheexceptionofthisfield,mostofthenaturalgasreservesof
Kazakhstanaresour,withasmuchas15%nonhydrocarboncontent,notablyintheTengizandKashagan
fields.
Of the 305kb/d of NGLs produced in Kazakhstan in 2008, most of the condensate is from the
Karachaganakfield.NaturalgasfromtheKarachaganakfieldisprocessedattheOrenburggasprocessing
plantinRussia.FortheKarachaganakcondensatefieldthereisaspecificexpectedplateauanddecline
profilethatisimplementedinourcondensateforecast.ThenextdevelopmentphaseofKarachaganakis
assumedtoenterintoproductionin2011andboostKazakhstanicondensateproductionfrom270kb/d
to397kb/dby2012.
KazakhstanhasalsofourgasprocessingplantsproducingLPG,thebiggestofwhichistheTengizchevroil
plant, which has contributed substantially to Kazakh gas plant liquids production and exports overthe
last years. Tengiz term sales into Poland compete with Russian LPG trade there, and Kazakhstan also
exportsLPGtoGeorgia,Hungary,Poland,Romania,Slovakia,Turkey,Finland,Kyrgyzstan,ChinaandIran.
Kazakhstan production outlook for natural gas and NGLs

NGL (kbd) 305 322 315 372 443 431 420 410 106 4.3 %
NGL to gas ratio 68.3% 54.4% 59.6% 65.9% 73.3% 66.6% 60.6% 55.3%

We assume gas plant liquids production to grow at the same rate as the Kazakhstan gas production,
namely8%peryear,from34kb/din2008to57kb/din2015.TheKashaganfield,oneofthelargestfield

46
everdiscoveredoutsideoftheMiddleEast, isassumedtocomeonstream withintheforecastperiod,

andthecrudeproductionfromthis fieldis includedinourcrudeoilproductionfromtheendof2013.
However, possible NGL profiles are not known and not included in this forecast, representing one
potentialsourceofupsideriskforourNGLforecast.
5.3.3 Azerbaijan
ThegasproductionofAzerbaijanfellfrom8bcmin1991to5bcmin2004,andthenroseyearbyyearto
16bcmin2008andisexpectedtoclimbfurtherto20bcmby2015.TheShahDenizphase1projectwas
inaugurated in 2006, and reached its peak production level of 8.6bcm in 2009, along with 43kb/d of
condensate. Azerbaijan's major natural gas production increases in the future are expected to come
fromthefurtherdevelopmentoftheShahDenizfield.IndustryanalystsestimatethatShahDenizisone
of the world's largest natural gas field discoveries of the last 20 years. The State Oil Company of the
republic of Azerbaijan (SOCAR) has the right to most associated gas in Azerbaijan. The associated gas
from the AzeriChiragGuneshli (ACG) field has until now mainly been reinjected to support reservoir
pressure.ImportantgasproducingfieldsinAzerbaijanthatareondeclinearetheBakharfieldsandthe
Gunashlishallowwaterfields.
Azerbaijan is a country that traditionally had dry gas and low awareness of NGLs, but that has now
developedagascondensatefieldinconsortiawithinternationaloilcompanies.
Azerbaijan production outlook for natural gas and NGLs

NGL (kbd) 42 44 42 46 46 46 46 46 5 1.6 %
NGL to gas ratio 14.7% 15.1% 16.5% 17.0% 16.0% 15.1% 14.3% 13.4%

SOCAR gas production in addition to some ACG gas production is processed by a gas processing plant
operatedbySOCAR.Itwasbuiltin1961andhascurrentlyacapacityof6.5bcmoffeedgas.Unconfirmed
reportssuggestproductionofonly1kb/dofLPGannuallyfromthisplant,slightlyincreasingyearonyear
overthelastthreeyears.EarlierOMRestimateshadanNGLprofileof6kb/dperyearforAzerbaijan,but
likelyincludedrefineryLPGfromtherefineryAzernefyanajag.TheliquidsratiofromtraditionalAzerigas
productionappearstohavebeenclosetozero.However,withnoofficialreportingongasplantliquids
thisremainsuncertain.ShahDenizphase1yields43kb/dofcondensatefrom8.6bcmofnaturalgas,a
liquidtogasratioof30%.
OilandgasvolumesfromtheACGfieldandShahDenizprojectsarebroughttotheSangachalTerminal
locatedonthecoastoftheCaspianSea45kilometressouthofBaku.Theterminalreceivesoilfromthe
ACGfieldandnaturalgasfromtheShahDenizgas field.FromtheSangachalTerminalfouroilandgas
pipelines carry crude oil (including condensate) and natural gas to the Black Sea, Turkey and the
Mediterranean Sea. The oil is exported via the BakuTbilisiCeyhan pipeline to Turkey's Mediterranean
coastandviatheBakuSupsaPipelineandtheBakuNovorossiyskPipelinetotheBlackSeacoast.

47
Source:IEA

For Shah Deniz phase 1 the existing OMR supply profile has been retained. For LPG growth of 5% per
yearhasbeenassumed.ThisshouldreflectthegeneraltrendinFSUcountriesofbetterawarenessofthe
valueofLPG,aswellasthenaturalgasproductiongrowthitself.WedonotassumeShahDenizphase2
productionuntil2016,outsidethelimitsofthisforecast.
5.3.4 Turkmenistan
Turkmenistanproducedabout71bcmofgasin2008andisforecasttoraiseitsproductionto86bcmby
2015.Thecountryhasahugepotentialduetothelargeresourcebase,withthehighestprovenreserves
in the Caspian region at 3tcm. The resources are probably much higher than the reserves, potentially
placing the country at number four in the world after Russia, Iran and Qatar. The South Yolotan and
Osmanfields,whichareyettobedeveloped,arethoughttohold414tcmofnaturalgasalone,possibly
makingittheworldsfifthlargestgasdeposit.
ThelargestgasproducingfieldinTurkmenistanistheDaulatabadfieldinthesoutheast,whichranksas
the worlds thirteenth largest gas field. After the disintegration of the Soviet Union, Turkmen gas
productionwascurbedbyexportconstraintsandpricedisputes,andinApril2009Turkmenexportsto
RussiawerefurtherhitbyanexplosionintheCentralAsiaCenter(CAC)pipelineandthenanextended
dispute over the terms for restarting gas sales operations. In December 2009 the country inaugurated
the3040bcm/ycapacityTransAsianGasPipeline(TAGP)toChina.InJanuary2010itopeneditssecond
gas export pipeline to Iran, named DaulatabadSarahsHangeran, increasing its natural gas export
capacitytoIranfrom8to14bcm.WithrecentlyresumednaturalgasexportstoRussia,Turkmenistanis

48
intheprivilegedsituationofhavingviableexportroutestoNorth,SouthandEast.TheNabuccopipeline
wouldrepresentanopportunityforTurkmenistantoexportnaturalgastoEurope,butforthisoptionto
materialise many issues remains to be solved, including how to transport gas across or around the
Caspian Sea. Turkmenistan has many large fields that still remain to be developed, notably the South
YolotanOsmanfield,whichisadrygasfield,andtheSouthGutlyayakfield,whichisagascondensate
field. Contracts to develop the South Yolotan fields were recently awarded to Korean and UAEbased
firms. Turkmenistan has restrictive policies for IOC involvement in onshore developments, but has
currently several operational PSA agreements with IOC to develop offshore fields. It also has an
agreement with CNPC to develop gas production in the East of Turkmenistan to fill the new pipeline
toChina.
Oil production in Turkmenistan is mainly located offshore in the Caspian Sea. The Serdar Kapaz field
locatedonthedivisionlinebetweenTurkmenistanandAzerbaijanisbelievedtohaveahighpotential,
thoughthepoliticalissuesneedtoberesolved.However,informationonassociatedgasandnaturalgas
liquidsfromoilfieldsinTurkmenistanisverylimited.
Turkmenistan production outlook for natural gas and NGLs
Gas production (bcm) 71 71* 72 74 77 80 83 86 15 2.8 %
NGL (kbd) 7 7 10 10 12 14 15 16 9 12.7 %
NGL to gas ratio 0.6% 0.6% 0.8% 0.7% 0.9% 1.0% 1.0% 1.1%
*Estimate from mid-2009. The actual 2009 natural gas production w as much low er than 71 bcm due to the dispute w ith Russia.

In spite of being a large natural gas producer, Turkmenistan produces only small volumes of gas plant
NGLs, placing its liquidstogasratio atthelowestof thecountries covered in the study.Thegasplant
LPGandcondensateinTurkmenistancomefromsixprocessingunits;fourofthemlocatedattheNaipsky
plantthatprocessgasfromtheNaip,GazlydepeandBalgulfields,andthefifthandsixthattheBagadzha
and Yashlar plants, that process gas from the Bagadzha field and the Yashlar fields respectively. All of
thesefieldsareonshorenonassociatedgasfields,andalloftheseplantshaveonlysmalloutputofNGLs.
TheformerNGLprofileforTurkmenistanseemedtoincludeallLPGproductioninTurkmenistan,ofwhich
mostofitisrefineryLPG,andtheNGLprofileforTurkmenistanhasbeenreviseddownaccordingly.The
TurkmenstatecompanyTurkmengasissaidtoproducecondensateintheEastofthecountry,butthese
volumesareassumedtobeincludedwithourcrudeoilfigures.
AnewgasprocessingplantisplannedbyPetronasattheKiyanlyfield.Thisplantwouldprocessrichgas
from the Kiyanly, Diyarbekir and Magtymuly fields situated offshore in the Caspian Sea. The NGL
production in Turkmenistan is assumed to increase by 13% annually, to account for the expected
increaseasaconsequenceofhigherliquidscontentinsomeofthenewgasfieldstobedeveloped.
TheoutlookforgascondensatefieldsinTurkmenistanmightchangethesceneforcondensateandNGL
productioninTurkmenistaninthefuture.NotablytheSouthGutlyayakfieldissaidtocontainaveryrich
gas.However,fielddetailsremainsketchy,suggestinglongertermcondensatedevelopment,outsidethe
scopeofthisforecast.

49
5.3.5 Uzbekistan
Uzbekistanisexpectedtoseealmostflatnaturalgasproductionovertheforecastperiod,from67bcm,
viaadeclineto66bcmin2009upto68bcmby2015.Thecountryhasmanyfieldsproducingassociated
gasandnonassociatedgas,aswellasgascondensatefields.Thenaturalgastoliquidsratioisassumed
toremainconstantat5%.
Condensate production in Uzbekistan fell from 71kb/d in 2000 to 44kb/d in 2007, and rose again to
55kb/din2009,indicatingthatsomenewproductionmighthavecomeonstream.Uzbekistanhasthree
gasprocessingplantswithajointproductionof7kb/din2008;MubarekGPP,theShurtangaschemical
complex,whicharebothnew,andtheShurtanneftegasgasplantwhichisolder.Marketreportssuggest
that the gas plant LPG production of Uzbekistan was set to increase to 19kb/d with the new capacity
thathasjustbeencommissioned,butthisincludesrefineryLPG.SasolalsoplanstobuildaGTLplantin
Uzbekistan,andtheliquidsstrippingofgastobefedintotheGTLplantmightaddvolumesofgasplant
liquids.
It is assumed that both condensate and other NGL production will grow at the rate of the natural gas
production, although, the forecast remains uncertain in the absence of reliable condensate data.
However, investments are taking place in gas processing and Uzbekistan has good export options for
LPG,notablytoAfghanistanandothercentralAsianrepublics.TotalNGLproductioninUzbekistanisset
toincreasefrom59kb/din2008to64kb/din2015.
Uzbekistan production outlook for natural gas and NGLs

NGL (kb/d) 59 62 62 63 63 64 64 64 5 1.2 %
NGL to gas ratio 5.1% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5%

5.4 LatinAmerica
Latin America holds 7.5tcm of proven natural gas reserves, and the reserves have been falling since
2006.Venezuelahasbyfarthehighestnaturalgasreservesofthisregion,with65%ofthetotal,andits
reserveshavebeenincreasingovertherecentyears.Regionalproductionofnaturalgasisprojectedto
risebyanaverageof1.4%annuallyfrom148bcmin2008to162bcmin2015.Venezuelahasthehighest
potentialtoincreasenaturalgasproduction,butinthepresentinvestmentenvironmentisonlyforecast
togrowby2.8bcmovertheforecastperiod.ThehighestlevelsofgrowthcomefromBoliviaat+6.4bcm,
Peruat+5.1bcmandBrazilat+3.8bcm,whileothercountrieshavefallingorstableproduction.
Latin America natural gas Latin America NGLs

bcm mboe/d
200 40%
3.0
27%
2.5
150 38%
25%
2.0
100 36% 23%
1.5
1.0 21%
50 34%
0.5 19%
0 32% 0.0 17%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2004 2006 2008 2010 2012 2014
Unconventional gas Natural gas (mboe/d)
Conventional gas NGLs (mb/d)

50
TheprojectrealisationpotentialofbothVenezuelaandBoliviarepresentthehighestuncertaintyinthe
Latin American forecast, as both countries might obtain higher growth if investment conditions were
morefavourable.VenezuelahasthreeproposedLNGtrainswithatotalcapacityof20bcm,butnoneof
themare expectedtocomeonstream withintheforecastperiod.Theshareof associated gas inLatin
America is expected to fall from 38% to 35% over the forecast period, while the element of
unconventionalgasispredictedtoremainstableat5bcmoftightgas.
NGLproductioninLatinAmericaisforecasttogrowwithanaverageof1.7%annuallyfrom520kb/din
2008to585kb/din2015.Itisdifficulttopointtoaspecifictrendingasproductionthatinfluencesthe
NGL outlook for Latin America, mainly due to the lack of data and information. The most important
contributiontoNGLproductioninLatinAmerica,anincreaseof37kb/drealisedfrom2008towardsthe
endof2009istheCamiseaproject,whichnowhasatotalNGLproductionof80kb/d,withthenatural
gasdestinedforthePeruLNGprojectthatisduetocomeonstreamin2010.OurNGLforecastfurther
assumesBrazilianNGLstogrowalmostattherateofnaturalgasproductionandtoadd19kb/dofNGLs
overtheforecastperiod.However,wedonothavespecificinformationabouttheNGLcontributionfrom
the new Brazilian gas developments, that we assume to come partly from associated and partly from
nonassociated sources. For Venezuela we have little information on the current state of the NGL
production capacity, and the difficult investment climate continues to dampen growth prospects.
Argentina, which is traditionally the most important exporter of LPG in the region, faces falling NGL
productionwithdecliningnaturalgasproductionandlittlereservereplacement.
5.4.1 Argentina
NaturalgasproductioninArgentinaisforecasttofallovertheperiodfrom2008to2011,andthentorise
from 2011 to 2015 by an average of 3.3% annually. During 2008 Argentina has strived to sustain LPG
exports, because of a shortage of natural gas, and it has had to leave more heavy components in the
natural gas to be able to meet domestic needs. In 2008 Argentina became an importer of LNG,
somethingthatwilleasethissituation.ArgentinaalsoimportsgasfromBolivia,albeitthevolumeshave
beenverylow.ThereisanaturalgaspipelinebuilttoexportArgentineangastoBrazil,butthepipelineis
currentlyidled.
Argentina is the largest LPG exporter in Latin America, and exports LPG mostly to Chile and Brazil.
Argentinahasseveralgasprocessingplantsofwhichthemostimportantoneisthefractionationplantat
Bahia Blanca on the east coast. The plant receives NGLs extracted at various plants in Neuquen
producing area in the middle of the country, including the much trumpeted Proyecto Mega, and
preparesLPGforexportaswellasfordistributiondomestically.TheoffshorefieldsCarinaandAriesare
locatedontheEasternsideoftheSoutherntipofthecountry.ArgentineanrefineryLPGproductionhas
fallensomewhatfrom35to30kb/doverthelast10years,alongwithoilproduction.
Argentina production outlook for natural gas and NGLs

Gas production (kboe/d) 772 708 626 646 667 689 712 735 -37 -0.7 %
NGL (kb/d) 125 115 101 105 108 112 115 119 -6 -0.7 %
NGL to gas ratio 16.2% 16.2% 16.2% 16.2% 16.2% 16.2% 16.2% 16.2%

Data availability is not good for Argentina, but a comparison of external sources suggest a 2008
condensateproductionof3040kb/dandotherNGLsofaround7090kb/d.ThecurrentOMRfigureof
125kb/d for 2008 therefore seems reasonable, and no revision was suggested. The liquids ratio of
Argentina of 16% matches well with stated liquids ratios for the most important offshore gas fields in
Argentina,AriesandCarina.Carinahasaliquidsratioof16%,andAriesissaidtohaveanevenhigher

51
liquids ratio, according to the operator Wintershall. The distribution between condensate and LPG is
50/50 on the Carina field and not stated for Aries. Going forward our forecast suggests that the NGL
productionwillfollowgasproduction,implyinganNGLforecastof119kb/dby2015.
5.4.2 Venezuela
Venezuela has 4.9tcm of proven natural gas reserves, the second largest in the Western Hemisphere
behindtheUnitedStates.Anestimated90%ofVenezuelasnaturalgasreservesareassociatedwithoil.
Most of the nonassociated gas reserves are found in the offshore Northern basin. The petroleum
industry consumes over 70% of Venezuelas natural gas production, with the largest share of that
consumptionintheformofreinjectiontoaidcrudeoilextraction.Themarketedproductionofnatural
gasinVenezuelaisestimatedtohavefallenoverrecentyearsfrom28bcmin2000to23bcmin2008,as
associatedgashasfallenasaresultoffallingoilproduction,butisforecasttoriseto26bcmagainover
the forecast period. Venezuela is a country with a high potential for increased gas production, with
several big projects, including LNG projects, being planned. Most of Venezuelas nonassociated gas is
located offshore, and the most concrete plans to develop those resources are the Delta Caribe and
Mariscal Sucre/Cigma projects that include LNG exports. However, given the many investment and
operational problems confronting potential project sponsors in Venezuela, we do not assume these
plansmaterialiseovertheforecastperiod,asisalsoimpliedbytheWEO2009naturalgasforecast.
Venezuela production outlook for natural gas and NGLs

NGL (kb/d) 210 210 211 212 213 214 215 216 6 0.4 %
NGL to gas ratio 52.1% 55.1% 53.8% 52.6% 51.4% 50.2% 49.1% 48.0%

CurrentNGLproductionandoutlook
ThegashubofEasternVenezuelaisAnacowhereliquidsareextractedattheSanJoaquin,SantaBarbara
andJusepinplants.TheJosgasprocessingplantinthestateofAnzoategui,linkedtoAnacobypipeline,
istheonlyNGLfractionationplantinEasternVenezuela.InWesternVenezuela,intheLakeMaracaibo
producing area, there is NGL extraction capacity at the Tia Juana, Lama and Lamarliquido processing
centresandfractionation plantsatBajoGrande,UleandElTablazo.LPGandcondensateareexported
fromtheportsLaSalinaatMaracaiboinWesternVenezuelaandfromJosinEasternVenezuela.Recent
exportdataindicatethatbothNGLproducingregionsareoperationalandexportbothcondensateand
LPG.ThetotalNGLfractionation capacity in 2006 isbelievedtohave been 230kb/d,based on various
sources,possiblywithfieldcondensateonthetopofthat.
TherearefewverifiablesourcesavailableforcurrentVenezuelanNGLproduction.VenezuelasMinistry
ofOilandMines(PODE)publisheddetaileddataearlier,butthetimeseriesstopsin2006.PDVSAfiled
reportsonform20FwiththeSECuntil2005,andthelatest20F,withproductionfiguresupuntil2004,
is considered as the last reliable source for NGL production data from Venezuela. According to that
reportVenezuelaproduced25kb/dofcondensateand166kb/dofotherNGLsin2004,somewhatlower
than theprestrikeproduction in 2002 of almost 220kb/dof condensate and otherNGLs.Thecurrent
OMRNGLfigureof210kb/disbasedona slightimprovementofNGLproductionfromtheimmediate
poststrikesituation.

52
AccordingtothePODEreportfrom2006,2004productionofNGLswas286kb/d,ofwhich124kb/dwas
condensateand162kb/dwasNGLs.Thedifferenceherecouldbethecategorisationofcondensate.The
US EIAs estimate of natural gas plant liquids from Venezuela is currently at 216kb/d. In their last
country analysis brief of Venezuela the EIA suggests that Venezuela produced 300kb/d of condensate
andotherNGLsin2006.ThisisinlinewiththePODE2006figureforcondensateandotherNGLs.
OurconservativeviewontheNGLproductionfromVenezuelaisduetothemanyoperationalproblems
evidentaftertheoilstrikein2002/2003sincewhentheindustrylostmanytechnicalandmanagerialstaff
and saw a sharp dilution in foreign oil company involvement. Our outlook is based on a proportional
growthalongwiththeWEO2009gasproductionforecast,resultinginaforecastof216kb/din2015.
5.4.3 Trinidad&Tobago
MarketednaturalgasproductioninTrinidad&Tobagowas35bcmin2008,andisforecasttodeclineto
29bcm in 2010, before increasing again to 34bcm in 2015. Trinidad & Tobago is an established LNG
exporterwithanLNGcapacityof20.5bcmfromfourtrainsattheAtlanticLNGplantbuiltbetween1999
and2005.
ThegovernmentofTrinidad&TobagopublishmonthlyNGLproductionfigures,splitinpropane,butane
andnaturalgasoline,totalling38kb/din2008,risingto44kb/donaveragein2009,butreaching48kb/d
inthetwolastmonthsoftheyear.LPGmakeuptwothirdsofthereportedvolumes.Onthewebpageof
AtlanticLNGtheystatedtheNGLproductioncapacityperLNGtrain,whichgaveatotalof30kb/d.The
NGLfacilityatAtlanticLNGisassumedtobetheonlyNGLplantinTrinidad&Tobago,butthecapacity
hasobviouslybeenexpandedoverthelateryears.ItisunclearwhetherTrinidad&Tobagoproducesany
condensate in addition to the gas plant liquids reported by the government. According to the
governmentsourceaboutalltheNGLproductionfromTrinidad&Tobagoisexported.Externalsources
suggestthatLPGexportsfromTrinidad&Tobagoisapproximately20kb/d,andhighlyvariableoverthe
yearbythepatternofdomesticconsumption.
WeassumethatthenaturalgasvolumesprocessedattheAtlanticLNGplantwillbeconstantinvolume
andliquidscontent,andtheNGLfigurethereforeissetflatovertheforecastperiodatthehigherlevel
seenreportedinthelastmonthsof2009.
Trinidad and Tobago production outlook for natural gas and NGLs
NGL (kbd) 38 44 48 48 48 48 48 48 10 3.3 %
NGL to gas ratio 6.4% 7.3% 9.5% 9.2% 9.0% 8.7% 8.4% 8.2%

5.4.4 Bolivia
NaturalgasproductioninBoliviaissettoincreaseby6%annuallyfroma2008startingpointof14bcm,
to20bcmin2015.Boliviannaturalgasproductionjumpedfrom2003to2005asBoliviastartedtoexport
gas to Brazil. The country also has installed a pipeline to export gas to Argentina, and the WEO2009
forecastassumealowutilisationofthatexportroute.

53
Bolivia production outlook for natural gas and NGLs

NGL (kbd) 7 7 8 8 9 9 10 10 3 5.6 %
NGL to gas ratio 2.9% 2.9% 2.9% 2.9% 2.9% 2.9% 2.9% 2.9%

BoliviaregularlyreportsNGLfigures,bothgasplantLPGandcondensatevolumes.Thevolumesin2008
were1kb/dofLPGand6kb/dofcondensate.NaturalgasfromBoliviareportedlyhasahighcontentof
liquids,buttheproductionofLPGhasbeenimpededbyslowinvestmentininfrastructure.Someofthe
undeveloped discoveries of Bolivia are gas
condensate fields, like the Margarita and Itau
fields operated by BG. The current liquids to gas
ratio is very low at 3%, so there could be
substantial scope to expand output. It has been
suggested that Bolivian gas plant liquids
production could easily increase from 7kb/d to
15kb/d based on current infrastructure. Bolivia
has possibly as many as 7 gas processing plants
withacapacitytoextract22kb/dofNGLs,among
others a 5train Repsol operated plant in Santa
Cruz.Thebiggestplantin termsofNGLoutputis
probably the BG operated plant in Vertiente.
Bolivia's government has recently revived to
expandoperationalNGLextractionandseparation
capacity in Rio Grande in the eastern region of
Santa Cruz and Chaco in southeastern Tarija (see Source:ArgusLPGWorld
map).
There have been many violent civil protests in Bolivia against natural gas exports, and the unstable
politicalclimateunderliestheconservativeoutlookfornaturalgasandNGLproduction,ascomparedto
thepotential.Weassumeagrowthinlinewiththenaturalgasproductiongrowth,whichwilltakethe
2015NGLproductionupto10kb/d,althoughclearlyvolumescouldultimatelyrisehighershouldnatural
gaspotentialbemorefullyrealised.
5.4.5 Brazil
Brazil is a modest natural gas producer with a 2008 marketed production of 13bcm, but has a large
potentialbothintermsofresourcesandforbetterutilisationofcurrentnonmarketedgasproduction.A
lackofdistributioninfrastructureoutsideofthelargecoastalcitiesintheSouthEastisanimpedimentto
growth. The gross domestic output, which includes reinjection and flaring, is estimated at 59bcm.
AccordingtotheNationalPetroleumAgency(ANP),Brazilhadgasprocessingplantsineightstateswitha
jointcapacitytoprocessabout30bcmofnaturalgas.Thenaturalgasproductionisdividedbetweenthe
South East, the Amazon and the North East. The strongest growth region is the South East with the
importantCampus,SantosandEspiritoSantooffshorebasins.ThenaturalgasintheAmazonandinthe
NorthEastismostlynonassociated,whilemorethanhalfofthenaturalgasisassociatedintheSouth
East. Some natural gas is reinjected after liquids extraction, notably in Amazon state, where no
infrastructure is currently in place to monetise natural gas. From 1998 to 2008 Brazils marketed

54
domesticgasproductionalmostdoubledfrom7bcmto13bcm.Themarketedproductionissettogrow
steadilybyanannualrateof4%,reaching17bcmin2015.
From1998to2008Braziliannaturalgasimportsincreasedfromzeroto12bcm.Brazilimportsnatural
gasfromBoliviaaswellasLNG,whileanimportpipelinefromArgentinaiscurrentlyidled.Brazilbecame
anLNGimporterin2009,andimportssmallvolumesofLNGtofeedthermoelectricpowerplantsinthe
SouthEast.
Brazil production outlook for natural gas and NGLs

NGL (kb/d) 86 79 82 86 91 95 100 105 19 2.8 %
NGL to gas ratio 39.5% 32.6% 33.1% 33.9% 34.6% 35.4% 36.1% 36.9%

The ANP is a primary source for NGL data for Brazil, and reports gas plant liquids, but not field
condensates.TheBrazilianNGLoutputequalled86kb/din2008,andthereportedvolumesaresplitinto
ethane, LPG and pentane. Production is also reported per gas processing plant. Brazil has nine gas
processingcomplexeswithliquidsextraction,ofwhichtheCabuinascomplexinRiodeJanerioandthe
UrucucomplexintheAmazonarethemostimportant.AttheUrucucomplextheNGLsareextractedand
transported via pipeline to the state capital Manaous, where LPG forms an important part of the fuel
mix. Brazil lacks a gas gathering system offshore, especially for many mature fields in the South East.
These fields are only connected to shore by oil shuttle tankers, while the natural gas is flared or re
injected without NGL extraction. Much of the associated gas is produced from deposits located below
deepwatersfarfromland.ThereisalsooftenahighCO2content,andvarioustechnicalchallengesthat
mustbeovercomeinorderforthegastobeutilised.However,severalgasprocessingplantsareunder
constructionintheSouthEasttomonetisedrygasandextractNGLsfromnewdevelopmentsinthesame
basins.
ThebiggestuncertaintyunderlyingourNGLforecastforBrazilisthespeedofgrowthinmarketednatural
gasproduction,andhowthenewcompositionofnaturalgassourceswillinfluencetheratioofNGLto
naturalgas.Ourgrowthestimateassumesaconstantliquidsratiotomarketedgasgoingforward,with
outputreaching105kb/dby2015.
5.4.6 Peru
Peru's project of the decade the Camisea natural gas
gatheringandprocessingprogrammewascompletedin2009,
and is likely to be the single most important contributor to
Latin American NGL production growth over this forecast
period.PerusLNGplantwillcomeonstreamin2010andthe
marketed natural gas production of Peru will then reach
10bcmfroma2008levelof5bcm.PeruLNGisoneofthefew
LNGexportprojectsintheworldoutsideofQatarduetocome
onstreamin2010,andthefirstinPacificSouthAmerica. The
natural gas is transported westwards from the Camisea fields
inthecountryssoutheastrainforestthrougha408kmpipeline
totheterminallocated170kmsouthofLima.
Source:ArgusLPGWorld

55
Peru production outlook for natural gas and NGLs

NGL (kb/d) 43 74 80 80 80 80 80 80 37 9.3 %
NGL to gas ratio 47.7% 138.9% 138.3% 48.8% 47.7% 46.8% 45.9% 45.1%

ForPeruthereisofficialdataforliquidsproductionperblock,andtheNGLproductioncorrespondtothe
liquidsoutputfromtheCamiseafield,whichcomprisesblock88,56and31Cinthereportedfigures.The
NGLvolumesarefractionatedatthePiscoplant,andcurrentlyamountto80kb/d,whichismarginally
below the nameplate capacity of the plant. No further phases of the Camisea project or other big
projectsinPeruareassumedovertheforecastperiod.
5.4.7 Ecuador
Ecuadorsgasproductionisforecasttoremainunder1bcmbytheendoftheforecastperiod.Ecuador
processessomeofitsassociatedgasattheShushufindiplantintheAmazonas,whilemostofitisflared.
EcuadorproducesnonassociatedgasfromtheAmistadfieldintheGuayabay,whichisprocessedata
gas processing plant there. Our current NGL production estimate of 2kb/d is set to decline towards
1kb/dby2011anddiminishby2015.NorevisionissuggestedtotheEcuadorNGLprofile,howevertheir
associatedgasprobablyrepresentsapotentialthatcouldprobablybeutilisedbetterforNGLproduction
andbeasourceofdiversifyingrevenuetothisOPECcountry.
5.5 AsiaPacific
TheAsiaPacificregionholds15tcmofprovennaturalgasreserves,andthisnumberhasincreasedover
thelastyears.China,butalsoIndonesia,AustraliaandIndiahaveupgradedtheirreservesrecently.Asia
Pacificseesitsnaturalgasproductionrisebyanaverageof2.8%annuallyovertheforecastperiod,from
419bcmin2008to510bcmin2015.NaturalgasproductioninIndia,ChinaandAustraliaisforecastto
growby31bcm,28bcmand21bcmrespectively,offsetbyweakerprofilesinothercountries.Theshare
ofassociatedgastototalconventionalgasfallsfrom21%to19%,whilenonconventionalgasrisesfrom
15bcmin2008to27bcmin2015,whereshalegasandcoalbedmethaneinAustralia,ChinaandIndia
standformostofthisgrowth.
TotalNGLproductioninAsiaPacificisforecasttoincreasebyanaverageof3.1%annuallyfrom2008to
2015,from738kb/dto912kb/d,resultinginanincreaseoftheliquidsratioforAsiaPacificfrom7.8%to
8.3%overtheforecastperiod.TwoofthelargegrowthcontributorsareIndonesianandVietnamesefield
condensateproduction,increasingby66kb/dand59kb/drespectively.CondensateisreportedwithNGL
figuresforIndonesia,ThailandandVietnam,butnotforChina,IndiaandAustralia,whereonlygasplant
liquids are included in the OMR figure. Condensate is included with the crude oil figure when not
included with the NGL figure. If Indonesian and Vietnamese condensate were excluded from our
forecast,theliquidsratioforAsiaPacificwoulddeclinefrom7.8%to7.2%overtheforecastperiod.
AnothersourceofgrowthisThaiNGLproduction.Thailandisbuildingnewgasprocessingplantsforits
petrochemical expansions, and hence improving the liquids ratio and the utilisation of NGLs. India
contribute31kb/dtothegrowth,whileAustraliacontribute21kb/dtothegrowth,bothwithdecreasing
liquidsratios.

56
Asia Pacific natural gas Asia Pacific NGLs

bcm mboe/d
600 22% 10 11.5%
500 21% 8
21% 11.0%
400
6
20%
300
20% 4
200 10.5%
19%
100 2
19%
- 18% - 10.0%
2007 2009 2011 2013 2015 2004 2006 2008 2010 2012 2014
Unconventional gas Conventional gas Natural gas (mboe/d) NGLs (mb/d)

The countries that have the highest gas production growth over the forecast period, however tend to
incorporatelittleinthewayofassociatedliquids.TheD6developmentintheKrishnaGodavaribasinin
Indiaisrather dry,andthe liquids ratioinIndia falls from 23% to 13%overthe forecastperiod.China
doesnotreportanyNGLproductionandasfarasweknowdoesnothaveanyquantifiableproductionof
gasplantliquids.However,Chinadoesaccordingtoseveralsourceshaverisingcondensateproduction,
notablyfromtheTarimbasin,althoughthesevolumesarenotreportedseparatelyandareincludedin
our crude figures. Our liquids ratio for China hence remains at zero throughout our forecast period.
Australiaproduced70kb/dofgasplantliquidsin2008,inadditiontoabout130kb/dofcondensatethat
is reported along with crude. Over the forecast period NGL output from Australia is assumed to lag
growthinnaturalgasproduction.AustraliahasseveralveryliquidsproneLNGprojectsplanned,notably
Ichtys LNG and Prelude LNG, and should these materialise within the forecast period this would
fundamentallyraiseouroutlookforNGLsfromAustralia.Howeverweassumetheseprojectstocomeon
stream after 2015. Likewise, we do not assume the PNG LNG plant to come on stream within our
forecastperiod.
5.5.1 Indonesia
Indonesiaisamatureoilandgasproducingcountry,whichstrugglestomaintainitsgasproduction,and
issetforanaverageannualdeclineof1%from77bcmin2008to71bcmin2015.Indonesiahasalegacy
NGLplantatArun,alargeLNGcomplexatBontangandanewlyopenedLNGplantatTangguh.Wedo
not assume any new LNG trains enter service during the forecast period, in spite of some proposed
projects.
For Indonesia our NGL figure includes both condensate and other NGLs, as reported monthly by the
Indonesian regulatory body BP Migas. The condensate baseload consists of declining Arun condensate
and some Bontang condensate from the Bekapai and Handil fields, which reportedly had a total
production of 75kb/d in 2008. The Tangguh LNG plant just started up and added a small volume of
condensate.Weforecastagrowthincondensateproductionfrom115kb/din2008to180kb/din2015
withnewcondensatevolumescomingonfromtheAsterfield,theGendaloGehemfieldandtheKirisi
Hiufield.
Indonesia production outlook for natural gas and NGLs

NGL (kb/d) 146 154 183 194 217 217 217 217 72 5.9 %
NGL to gas ratio 11.0% 13.5% 15.3% 16.0% 17.9% 17.9% 17.8% 17.8%

57
BPMigasreportsLPGproductionbygasplant,andthisfiguretotalled31kb/din2008.Thenumbersof
gas plants in 2008 was 12, where 82% of total production came from the Jabung and Belanak plants.
IndonesianLPGproductionwas60kb/dearlyinthedecade,butfellto13kb/din2006duetoanoutage
oftheBontangplant.Goingforwardthegasplantliquidsproductionisforecasttoincreasebyanaverage
of 3% annually, as new investments are undertaken in NGL extraction capacity, and is set to reach
37kb/dby2015.LPGdemandinIndonesiarecentlydoubledastheauthoritiesusedsubsidymechanisms
todivertdemandfromkerosenetoLPG,andthisisadriverforinvestmentsinNGLextractioncapacity.
5.5.2 Malaysia
GasproductioninMalaysiaisexpectedtogrowby1%annuallyfrom62bcmin2008to64bcmin2015.
There does not appear to be a good official source for NGL data in Malaysia. The OMR NGL figure
excludescondensate,whichisincludedinthecrudeproductionnumbers.Accordingtoexternalsources
MalaysiannonrefineryLPGproductionjumpedin2006from40kb/dto65kb/dduetotheopeningofa
newgasprocessingplant.TheplantinquestionisprobablytheGPP1thatwasrejuvenatedin2006and
addedcapacity,thoughitishardtoobtaininformationregardingthequantity.ThenewtrainontheLNG
facility in Malaysia MLNG 3 (Tiga) that became operational in 2003 and added about 6070kb/d of
condensateand10.5kb/dofLPGmightalsohaverampedupproductionduringthisyear.Basedonthis
informationour2008NGLbaselinehasbeenrevisedfrom47kb/dto65kb/d.
Malaysia production outlook for natural gas and NGLs

NGL (kb/d) 65 65 66 66 67 68 68 69 4 0.8 %
NGL to gas ratio 6.1% 6.2% 6.2% 6.2% 6.2% 6.2% 6.2% 6.2%

Malaysiaalsoproducescondensate,including8090kb/dfromfieldsthatproducefeedgasfortheMLNG
plant, called Bintulu condensate. External sources vary a great deal on the outlook for Malaysian
condensateproduction.TheBintulucondensateisassumedtodeclinetowardstheendoftheforecast
period, while new sources of condensate include the Gumusut and Malikai fields. The Malaysian
condensateisreportedalongwithcrudeintheOMR.WeassumegasplantNGLproductiontogrowin
linewithnaturalgasproduction,andreach69kb/dby2015.
5.5.3 Thailand
Thailandsgasproductionappearstobeflatat28bcmfrom2008to2015,butthishidesafallfrom2008
to2009andgrowththereafter.ThailandhasproducednaturalgasfromtheGulfofThailandsince1981,
andnaturalgasisextensivelyuseddomesticallyforpowergeneration,transportationfuelandindustrial
appliances.Thailandhasseenasteadystreamofnewoffshoregasdevelopmentsanddoesalsohavea
potentialintheoverlappingareawithCambodia,whereoneprojectenteredintoproductionin2008.
Thailand production outlook for natural gas and NGLs

NGL (kbd) 170 170 169 184 194 204 214 214 44 3.4 %
NGL to gas ratio 34.7% 40.5% 38.2% 41.0% 42.3% 43.7% 45.5% 45.1%

58
The Energy Policy and Planning Office (EPPO) of Thailand reports monthly condensate and LPG
production data. The agency posted 2008 production at 170kb/d with 84kb/d of condensate and
86kb/d of gas plant LPG. Thailand is undertaking an active industrial development in the Rayong
industrialareaatthenorthoftheThailandbay,wheretheGSP6
Rayong, the GSP7 Ma Ta Phut, the ESP Rayong ethane gas
processing units are planned, and where the country also
envisages to double its petrochemical industry. Another new
gas plant project is the TTM GSP2 Songkhla plant, situated at
thesouthwestoftheThailandbay.Earlyin2010thenewswere
launchedthattheMaTaPhutNGLplantofThailand,alongwith
several other industrialprojects inthearea,which wereready
toresumeoperations,hadbeenhaltedduetofailuretocomply
with environmental requirements. The startup of the new
NGL/petrochemicalcomplexofThailandwasthereforedelayed
by1.5years,andgasplantLPGproductionisnowassumedto
build up from 2011 and onwards and reach the targeted Source:www.moeco.jp
130kb/dlevelby2014.
The condensate production is assumed to remain stable over the forecast period. Current condensate
productionfromamongothersthePailin,ErawanandBongkotfields,aswellasnewproductionfromthe
Arthit field that started operations in 2008, are expected to sustain production levels throughout the
forecast period, and decline is going to be replaced by new developments. For Thailand planned NGL
expansionsoutpacethegrowthinproductionofnaturalgas,asexploitationofliquidsincreases,driven
bythegrowthambitionforpetrochemicalproductioninThailand.Thailandalsoimportscondensateand
LPGtofillitsdomesticneeds.
5.5.4 India
India is entering a new gas era and compounded annual natural gas production growth is set to 11%
from29bcmin2008to60bcmin2015.TheproductionfromtheKrishnaGodavaribasinonthemideast
coastofIndiawillpossiblyreach30bcmby2011,withthe2008developmentofD6byReliancebeing
thefirstprojecttobelaunched.WhiletheliquidsratioofIndiangashasbeenaround2520%,thenew
gasisdeemedtobedrierandresultsinonlysmallincrementstotheNGLproduction.
India production outlook for natural gas and NGLs

Gas production (kboe/d) 498 655 707 763 823 889 959 1,036 537 11.0 %
NGL (kb/d) 113 118 120 122 124 126 129 131 19 2.2 %
NGL to gas ratio 22.6% 18.0% 16.9% 16.0% 15.0% 14.2% 13.4% 12.7%

ForIndiatheredoesnotappeartobeanyofficialsourceforNGLdata,butanimportantexternalsource
isthepublicationIndianOil&Gas,wheregasplantliquidsproductiondataarereportedasproducts
fromfractionators.In2008productionwas113kb/drisingto118kb/din2009,asnaturalgasproduction
increased by 9bcm. Condensate from the Bombay offshore basin is reported in the magnitude of

59
39kb/d in 2005 increasing evenlyto47kb/d in2009, butthesevolumes are included withinthe OMR
crudefiguresforIndia.
NonewgasprocessingplantsseemtohavebeenbuiltorplannedasaconsequenceoftheD6offshore
development.TheD6gasisprocessedatsixGAILoperatedgasprocessingplantsthatalreadyprocessgas
fromthePannaMuktiTaptigasoffshorefield,whichreportedlyissettoincreaseitsproductionaswell.
India is a mature LPG consumer with demand about 400kb/d annually, with 80% of demand met by
domesticrefineryLPGproduction.GAILoperatesanLPGpipeline,openedin2000,thattransportsLPG
1267kmfromJamnagartoLoni,nearDelhi.RefineryproductionofLPGisgrowinginIndiabecauseofthe
recentlyexpandedJamnagarrefinery,butdemandgrowthisslowing.Nowasthecountryentersanew
gas era, greater natural gas distribution reportedly
India NGL production
hampers the growth of LPG consumption, the same kb o.e./d
trendasweseeinChina. 1,200 30%
1,000 25%
TheoutlookforNGLproduction 800 20%
While further D6 Krishna Godavari developments are 600 15%
expected, the natural gas is believed to be dry. While
400 10%
gasproductioninIndiaroseby31%from2008to2009,
NGL production increased by only 5%. The same 200 5%
proportionalincrementsinNGLproductionfromrising 0 0%
Indiangasproductionisassumed,implyingafallinthe 2000 2002 2004 2006 2008 2010 2012 2014
liquids ratio from 23% in 2008 to 13% in 2015. NGL Gas production kb o.e./d
NGL (kbd)
productionisforecastat131kb/dfor2015. NGL to gas ratio (RHS)
5.5.5 China
Chinasgasproductionissettogrowbyanaverageof5%annuallyfrom76bcmin2008to104bcmin
2015.NodataonNGLorcondensatefromChinaisavailablefromofficialsources,andneithertheOMR
data nor most comparable sources include any segregated NGL or condensate volumes from China.
Natural gas in China is believed to be mostly from coal formed deposits that contain little liquids, but
oftencontainhydrogensulphide(H2S).However,thenaturalgasfromthecontinentalTarimBasinand
Permian gas of Ordos Basin should be relatively wet, while the driest gas is thought to be the marine
naturalgasofSichuanBasinandbiogenicgasofSanhuregionofQaidamBasin.TheTarimbasinisina
productionstepupperiodwiththeWestEastnaturalgaspipelinejustcomingonstream,andisbelieved
to currently supply at least 100kb/d ofcondensate, stepping upto150kb/d over theforecastperiod.
CNPCreportedlyhasproved13highpressuregascondensatefieldsintheTarimbasin.
ChinahasahighconsumptionofLPG,butallofitissuppliedbyitsrefineriesaswellastraditionallysome
imports.However,naturalgasisreplacingLPGintheresidentialsector,whichhascausedLPGdemandto
stagnate, while the petrochemical sector has been mostly reliant on naphtha. As naphtha is often the
mainproductyieldedbycondensate,thecondensatedepositsshouldbemostwelcomeforChinagoing
forward. Although condensate volumes may rise going forward, a lack of specific data prevents the
separationofthisproductionfromcrudeproduction.

60

5.5.6 Australia
Australiaholds2.6tcmofnaturalgasreserves,secondonlytoChinaintheAsiaPacificregion.Itsnatural
gas production of 45bcm in 2008 ranks it fourth regionally below Indonesia, China and Malaysia. The
naturalgasproductiongrowthfrom33bcmin2000to45bcmin2008isslightlylowerthanitsprojected
growth of 5.6% per year from 2008 to 2015, expected to take its natural gas production to 66bcm.
Australia currently operates two LNG complexes, the 4.5bcm Darwin LNG which is fed by natural gas
fromtheBayuUndanfieldinthesharedzonebetweenEastTimorandAustralia,andthe22bcmNorth
WestShelfLNG,ofwhichthefifthtraincameintoproductionin2008.Naturalgasproductionincentral
and southwest Australia feeds domestic natural gas consumption, whereas production on the North
WestShelftendstobealignedtowardsLNGexports.
AustraliahasalistofLNGprojectspendingovertheforecastperiod.Assumingallpossibleprojectsstart
up on schedule Australian natural gas production could theoretically rise from 45bcm in 2008 to
100bcm by 2015. However, the WEO2009 gas forecast entails an increase of only 21bcm over the
forecastperiod.ThiswouldimplycontinuedrampupattheNWSLNGplant,two6.5bcmphasesofthe
Pluto LNG development, the first of which is due to come on stream in 2011, and the Gorgon
development, that will add 20.5bcm of capacity, coming on stream towards the end of the
forecastperiod.
Australia production outlook for natural gas and NGLs

Gas production (kboe/d) 779 866 907 949 993 1,040 1,088 1,139 360 5.6 %
NGL (kb/d) 74 79 83 87 91 95 99 104 30 5.0 %
NGL to gas ratio 9.5% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1% 9.1%

61
Whilenaturalgasproductionhasbeengrowingby4%annuallyfrom2000to2008,theproductionofgas
plantNGLshasbeenvariablebetween7389kb/d,andiscurrentlyatthesamelevelasin2000,below
80kb/d.ThishascausedtheliquidsratioofAustraliatofallfrom14%to9%overthisperiod.
TheAustralianBureauofAgriculturalandResourceEconomics(ABARE)publishesdisaggregateddataon
condensateandgasplantliquidsproduction.Thecondensateproductionofabout140kb/disincluded
withourcrudefiguresforAustralia,whilea2008figureof74kb/dofNGLsincludedgasplantLPGand
ethane. Gas plant LPG and ethane in Australia comes mainly from the North West Shelf LNG gas
processingplantatKarratha,theGippslandgasprocessingplantandseveralsmallernewgasprocessing
plants near Victoria in the South East and the Moomba gas processing plant in the Cooper basin.
CondensatecomesmainlyfromtheNorthWestShelf,withabout10kb/dfromtheGippslandbasin.The
around 100kb/d of condensate from the Bayu Undan field that is attributed to East Timor in
OMRestimates.
TheamountofliquidsinanLNGprojectisimportantforitseconomicviability,andmanyoftheproposed
LNG projects in Australia have high liquids ratios. The Ichtys project stands out with a liquids ratio of
80%,andPreludeLNGwith51%(includingthecondensate).However,thePlutoandtheGorgonprojects,
which are the next LNG projects scheduled, appear to have less liquid content. Australia has also
proposedsomecoalbedmethanebasedLNGprojects,butthoseprojectsarenotassumedtomaterialise
overtheforecastperiod.
As NWS LNG added a new train in 2008, total

liquids production from the complex remained
constant, as decline in LPG production was offset
byrisingcondensateproduction,sothattheliquids
ratioforthisprojectwentdown.Australiassecond
mostimportantLPGproducingarea,theGippsland
basin, has also posted declining NGL production
figures.ButtheKipperprojectwilladdgasvolumes
to the Gippsland gas processing plant, and is
expected by 2011. Three newer gas processing
plantshaverecentlybeenbuildneartheGippsland
gas processing plant, the Bassgas, Minerva and
Otwaygasprocessingplants,tosupportseveralgas
developmentsinthearea,althoughtheseprojects
are only expected to smooth the decline of the
basin. The third most important NGL producing
basinofAustralia,thecentraleastonshoreCooper
basin,isalsoindecline.
Recently,ABAREstatedthatAustralianLPGproductionwillincreaseby35%by201314.However,after
having scrutinised the upcoming Australian gas developments to the degree possible, we take a more
cautious outlook. ForexampletheBrowse and the Ichtys LNGprojects might add 50kb/d ofgasplant
LPGproductioneach,butweassumetheseprojectstocomelaterthan2015.
Our forecast assumes that the liquids ratio remains constant at its current level of 24%, implicitly a
downward revision of the prevailing OMR/MTOMR projections. But with higher gas potential on one
hand,andatrendtowardsdriergasontheother,uncertaintypermeatesthisoutlook.

62
5.6 MiddleEast
TheMiddleEastholds75tcmofprovennaturalgasreserves,41%oftheworldtotal.Reservesarehighly
concentratedinIran,QatarandSaudiArabia,whichaccountfor82%oftotalnaturalgasreservesinthe
region, which have also been increasing over recent years. TheMiddle East sees the production of
naturalgasincreasemostrapidlyovertheforecastperiod,atacompoundannualgrowthrateof4.6%
peryear.Productionisforecasttorisefrom379bcmin2008to521bcmin2015,whereQatarhasthe
highest growth in absolute terms over the forecast period, with +86bcm, while Iran and Saudi Arabia
growby14bcmand15bcm,respectively.Thatsaid,theforecastsformanycountriesinthisregionare
highlyuncertain,especiallyforIran,whichhasaverybigpotentialbutstruggleswithprojectexecution.
Thisregionalsoseesthesharpestriseintheshareofnonassociatedgasascomparedtoassociatedgas,
nexttoAfrica. MiddleEastcountries havetraditionallyproducedassociatedgasasa byproductofoil,
buthavenowagrowingneedfornaturalgasfordomesticconsumptionandinthecaseofQatar,Abu
Dhabi, Oman and Yemen, and possibly Iran, LNG export plans, and this has led to a growth in non
associated gas production. The Middle Eastcountriesare dependent on exportrevenues fromoil,and
therefore prioritise the use of natural gas domestically. They use natural gas for the domestic sector,
powergenerationanddesalinationofwater.Somecountriesalsoreinjectlargevolumesofnaturalgas
into oil reservoirs to support oil production, notably Iran. Many Middle East countries have had
difficultiesinvolvingIOCsingasdevelopmentsfordomesticconsumption,duetoanuncompetitiveprice
environment,andsometimesdifficultgasreservoirconditions.Duetoalowerthanenvisagedspeedof
gasdevelopments, some MiddleEastcountries arenow facing the outlookof having to importLNG, a
prospectthatwillprobablytriggermorerapiddevelopmentofdomesticgasresources.
Middle East NGLs

Middle East natural gas mboe/d
bcm
10 65%
600 60%
8
400 40% 60%
6
200 20% 4
55%
2
0 0%
- 50%
2007 2009 2011 2013 2015
Conventional gas 2004 2006 2008 2010 2012 2014
Unconventional gas Natural gas (mboe/d) NGLs (mb/d)

For the Middle East countries that are OPEC members, as for other OPEC members, natural gas,
condensateandotherNGLsaccrueanadditionaladvantage,inthatsuchproductionisexemptfromthe
cartelsselfimposedproductionquotas.ThereforetheexportofLNGandNGLsmayrepresentasteadier
sourceofincomeforthecountries.ThisisonereasonwhymanyOPECcountrieswereamongthefirst
countriesoutsideoftheUSAtobuildadvancedsystemstoextractandmonetiseNGLsfromassociated
gas production. Saudi Arabia has for a long time been the worlds largest exporter of LPG, but recent
expansionsinthelocalpetrochemicalsectorhavereducedthescopeforLPGexports.
IranandQataralsoenjoybenefitsofscale,asmuchoftheirnaturalgasreservesaresituatedinonehuge
field, the South Pars/ North Field that straddles the Iran/ Qatari border in the Middle East Gulf. This
enablesdevelopmentinwhichlargequantitiesofNGLsandnaturalgascanbedevelopedsimultaneously
andhenceallowadvantagesofscaleinmidstreaminvestments.

63
NGLproductioninthisregionincreasesmorethannaturalgasproduction,atacompoundedannualrate
of 7.9% over the forecast period. Notably there is a jump in NGL production from 2009 to 2010 of
+0.7mb/dandfrom2010to2011of+0.8mb/d.NGLoutputinQatarisexpectedtoriseby0.5mb/d,and
inIran,UnitedArabEmiratesandSaudiArabiaby0.3mb/deachoverthesetwoyears.Atthesametime,
theliquidsratioforIranincreasesfrom29%to40%,from130%to139%forSaudiArabiaandfrom64%
to 91% for the UAE, while the liquids ratio for Qatar rises more moderately from 45% to 49%. The
upwardsurgeintheliquidsratioisnotsomuchreflectedintheresourcepotentialforthesecountriesas
intheneedtodeveloptheNGLsearlytoimproveprojecteconomicsandrealiseattractiveliquidssales
thatarenotsubjecttoOPECquotas.AhighNGLcontentinnaturalgasisoftenalsoaconditionforIOC
participation as long as domestic natural gas prices are so low. In summary, the main trends in gas
productionintheMiddleEastrelevantforNGLproductionarelargescalenaturalgasdevelopmentswith
IOCparticipationandthedevelopmentofmoregascondensatefields.
5.6.1 SaudiArabia
Natural gas production from Saudi Arabia is set to increase by an average of 2.7% annually over the
forecast period, from 70bcm in 2008 to 85bcm in 2015. This forecast is in line with a recent growth
outlookstatementfromtheSaudiAramcoCEO,butlooksmodestincomparisonwiththepotentialrisein
domesticgasneeds.
SaudiArabiaholds7.6tcmofprovengasreserves,comparabletothesizeofUSnaturalgasreserves,but
dwarfedbytheregionstwogasreservegiantsQatarandIran.Associatedgasaccountsfor60%ofthe
total reserves. More than half of the annual natural gas production in Saudi Arabia so far has been
associated gas. Marketed production equalled around 70bcm in 2008. According to the 2008 annual
reportofSaudiAramco,thekingdomhasanaturalgasprocessingcapacityof96bcm,whichtheyplanto
stepupto129bcmoveranundefinedperiod.
CurrentnonassociatednaturalgasproductioninSaudiArabiacomesfromtheKhufffieldbeneaththe
GhawarandtheAbqaiqoilfields,whiletheassociatedgascomesmainlyfromtheGhawarfield,butalso
from the Safaniya, Zuluf and Abqaiq fields. For many years, Saudi Arabia has struggled to meet its
domesticneedsforgasinthepetrochemicalsector,desalinationofwater,powergenerationandsome
reinjection. Production cuts due to OPEC quota commitments have also curbed the production of
associatedgas.ThebiggestprojectstoexpandnonassociatedgasproductionaretheKaranfield,which
willadd19bcmfrom2011/12,andtheArabiyahandHasbahfields/Wasitfacilitythatcouldyield26bcm
ofnaturalgasbeyondtheforecastperiod.Duetogasshortage,thegovernmenthaltedgasfiredpower
plantconstructionin2006,shiftingtooil.Recentmonthshavealsoseenrisingvolumesofcrudeusedfor
powergeneration,asinternationalmarketshaveremainedweak.Thegovernmenthasalsoencouraged
developmentofnewgasfields,especiallyinSaudiArabiasEmptyQuarter,butpoorsalestermsforgas
discourage the participation of IOCs, which are more interested in finding condensate. Saudi Arabia is
alsoconsideringLNGimports.
Saudi Arabia production outlook for natural gas and NGLs

NGL (kbd) 1,427 1,311 1,475 1,625 1,690 1,759 1,768 1,765 338 3.1 %
NGL to gas ratio 117.8% 129.6% 135.5% 138.6% 133.8% 129.3% 120.7% 120.5%

64
The Saudi Aramco annual report forms the basis for OMR historical NGL production figures for the
kingdom. The production data are disaggregated in condensate, gas plant LPG and ethane. The latest
data are from 2008, meaning that our 2009 figure is an estimate. Saudi Arabia bore the brunt of the
OPEC production cuts as a response to the economic recession, and this is likely to have curbed
NGLoutputin2009.
Saudi Arabias Master Gas System collects both associated and nonassociated gas from fields
throughoutthecountry.TheMasterGasSystemconsistsofnumerousgasoilseparationplants(GOSPs)
atfields,gasprocessingplantsandanextensiveNGLpipelinenetwork.InfactSaudiArabiahasbeena
pioneeringstatewithintheNGLbusiness,anditsYanbugasprocessingplantwasoneoftheworldsfirst
sourcesofgasplantNGLs.TheMastergassystemissaidtohaveagatheringcapacityof114bcmofgas.
The plants classified during this study as NGL extraction plants are estimated to have a capacity of
134bcm of natural gas. Those are the older Berri, Shedgum, Utmaniyah and Abqaiq plants, and the
Haradh,HawiyahandKhursaniyahplantsthathaverecentlyaddedcapacity.Theplantsthatareclassified
duringthisstudyasNGLfractionationplants,areestimatedtohaveacapacityof2.5mbofNGLs.Those
plantsaretheJuaymahplantandtheYanbuplantthatarebothbeingexpanded.TheJuaymahplantis
located by the Arab Gulf, while Yanbu located by the Red Sea. An NGL pipeline connects the two
NGLcentres.
Saudi Arabia NGL production
Saudi Arabia is the worlds biggest exporter of LPG, kboe/d
followed by Algeria and Norway. Saudi state marketer 2,0001,800
180%
170%
Petromin sells LPG in all markets and has traditionally 1,600 160%
been an important provider of benchmark LPG prices 1,400 1,200 150%
both East and West. Exports of refinery LPG from Saudi 1,000 140%
Arabia started from Ras Tanura in 1961. Until the 1970s 800 130%
600
theLPGexportsfromSaudiArabiawententirelytoJapan. 120%
400
200 110%
After the oil crisis in 1973 Saudi Arabia launched its
- 100%
mastergassystemtorecoverliquidsfromgaspreviously 2000 2003 2006 2009 2012 2015
flared.SincehalfofSaudiArabiasLPGproductioncomes Natural gas kboe/d
NGL kb/d
from associated gas, the production has decreased NGL to gas ratio (RHS)
recently, due to its lower OPEC quota. Going forward
Saudi Arabian LPG exports are expected to decline due to the sharp buildup in the petrochemical
industrywithinSaudiArabiathatwillcreatemoredomesticgasliquidsdemand.
NGLproductionoutlook
While baseload associated gas volumes are forecast to decline, growth is expected to come from the
Haradh3,Manifa,KhuraisandKhursaniyahprojects.NGLvolumesareforecasttoincreaseby338kb/d
during 20082015, with the bulk of the growth from NGLs as opposed to condensates, which remain
more stable. More than twothirds of Saudi Arabias growth in NGLs will come from the Hawiyah NGL
project that is forecast to add 310kb/d by 2013, while the Khursaniyah project is assumed to add
210kb/d by 2013, both slowly ramping up from their production startup in 2009/2010. The Manifa
projectisforecasttocomeonstreambytheendof2013andrampuptowards65kb/dofcondensateby
2015.TheKhursaniyahNGLplantwillprocessrichgasfromboththeKarannonassociatedgasfieldand
theManifafield,aswellasgasandcondensatefromtheArabiyahandHasbahfields.Allinallweforecast
SaudiNGLproductiontoreach1765kb/dby2015,from1427kb/din2008.

65
5.6.2 Qatar
The Qatari hydrocarbon sector is dominated by natural
gas.Qatarhastheworldsthirdbiggestgasreservesandis
rampingupitsproductionrapidly.Froma2008production
of79bcm,naturalgasproductionisexpectedtoincrease
by an average rate of 11% annually, reaching 165bcm in
2015.TheNorthField,theworldsbiggestgasfield,shared
with Iran (where it is called South Pars), contains 99% of
thecountrysgasreserves.Theassociatedgasreservesof
Qatar are contained in the Dukhan field and in the
Maydan,MahzamandBulHanineoffshoreoilfields.
Qatarexported40bcmofnaturalgasasLNGin2008,and
itsLNGexportissettoreach102bcmby2012.Themajor
growthvehicles havebeenthe RasGasand QatargasLNG
projects, aimed at longdistance exports. Qatar also
exports natural gas to UAE through the Dolphin pipeline,
and has launched one GTL project. The prospects for
Qatarigasproductionandexportsbeyond2012remainveryuncertainbecauseofamoratoriumonnew
exportprojectsimposedin2005toallowtimetostudytheeffectoftheexistingprojectloadonNorth
Fieldreservoirs.Themoratoriumwasrecentlyprolongeduntil2014.
Qatar production outlook for natural gas and NGLs

Gas production (kboe/d) 1,367 1,603 2,218 2,661 2,732 2,723 2,743 2,851 1,485 11.1 %
NGL (kbd) 610 721 1,010 1,228 1,280 1,296 1,326 1,400 790 12.6 %
NGL to gas ratio 44.7% 45.0% 45.5% 46.1% 46.9% 47.6% 48.4% 49.1%

TheOMRassessmentof610kb/dproductionin2008forbothcondensateandotherNGLsisinlinewith
comparable sources. The annual report of Qatar Petroleum mentions produced volumes in 2008 for
severalprojects,butdoesnotgiveacompletesetoffigures,andwearenotawareofacomprehensive
sourceofmonthlyproductiondataforNGLs.
QatarsfirstgasprocessingtrainswerelocatedinUmmSaidintheSouthEastofQatar,referredtoasthe
Mesaieedplant.ThephasesofthedevelopmentoftheplantarereferredtoasNGL1&2andNGL4.The
naturalgastreatedherecomesfromthelargeonshoreDukhanoilandgasfield,situated80kmwestof
Doha, from which the first oil was exported in 1949, as well as from the Maydan, Mahzam and Bul
Hanine offshore oil fields. The first NGL plant was opened in 1974. According to OMR data NGL
productionfromNGL1&2andNGL4was200kb/din2008,anddeclinessomewhatovertheforecast
period.
TheDolphingasprojectyields100kb/dofcondensate,whileOryxGTLadded34kb/dofNGLproduction
from 2008.TheDukhangascapyields20kb/dofcondensatewhilethenaturalgasrecyclingprojectis
reportedtoyield38kb/dofcondensate.

66
Qatar NGL production forecast (kb/d)

Product Facility 2008 2009 2010 2011 2012 2013 2014 2015 2008-2015
Condensate Barzan - - - - - - - 25 25
Dolphin 47 83 100 100 100 100 100 100 53
North Field Alpha 24 24 24 24 24 24 24 24 -
Qatargas 1, T1-3 35 33 35 35 35 35 35 35 -
Qatargas 2, T4 - 5 54 70 70 70 70 70 70
Qatargas 2, T5 - 5 54 70 70 70 70 70 70
Qatargas 3, T6 - - 15 55 70 70 70 70 70
Qatargas 4, T7 - - - 55 70 70 70 70 70
RasGas 2, T3 33 33 33 33 33 33 33 33 -
RasGas 2, T4 33 33 33 33 33 33 33 33 -
RasGas 2, T5 24 30 30 30 30 30 30 30 6
RasGas 3, T6 - 5 30 50 50 50 50 50 50
RasGas 3, T7 - - 30 50 50 50 50 50 50
Al Khaleej Gas 1 (ga 31 31 31 31 31 31 31 31 -
Al Khaleej Gas 2 - 10 40 40 40 40 40 40 40
RasGas 1,T 1-2 30 30 30 30 30 30 30 30 -
Dukhan gas cap 20 20 18 18 18 14 14 10 (10)
Gas recycling 38 38 38 38 38 38 38 38 -
Condensate Total 314 379 594 761 791 787 787 808 494
Ethane Al Khaleej Gas 2 - 10 40 40 40 40 40 40 40
Ethane Total - 10 40 40 40 40 40 40 40
LPG Dolphin 22 43 45 45 45 45 45 45 23
North Field Alpha 30 29 27 26 24 23 22 21 (9)
Oryx GTL expansion - - - - 15 35 51 65 65
Pearl GTL - - - 33 50 60 70 70 70
Pearl II - - - - - - 13 60 60
Qatargas 1, T1-3 5 5 5 5 5 5 5 5 -
Qatargas 2, T5 - 4 8 14 14 14 14 14 14
Qatargas 3, T6 - 2 4 7 7 7 7 7 7
RasGas 2, T5 12 15 15 15 15 15 15 15 3
RasGas 3, T6 - 3 26 45 45 45 45 45 45
RasGas 3, T7 - - - - - - - - -
NGL 1&2 90 84 81 77 73 70 66 63 (27)
NGL 4 109 104 99 94 89 85 80 76 (33)
Al Khaleej Gas 2 - 10 32 32 32 32 32 32 32
Oryx GTL 27 34 34 34 34 34 34 34 7
LPG Total 296 332 376 427 449 469 499 552 257
Grand Total 610 721 1,010 1,228 1,280 1,296 1,326 1,400 791
The North Field Alpha project yielded 24kb/d of condensate in 2008 and 30kb/d of NGLs. The
condensate production is expected to remain at that level over the forecast period, while the NGL
productionisexpectedtodecline.
TheAlKhaleejGasprojectyields31kb/dandisexpectedtoremainatthislevelovertheforecastperiod.
The AlKhaleej 2 project isexpectedtoyieldabove 70kb/dof LPG and ethane, rampingupfrom2009
andonwards.TheQatargasPhase1delivereditsfirstLNGcargotoJapanin1997,andyielded35kb/dof
condensateand5kb/dofNGLs.TheQatargasPhase2,aimedattheBritishmarket,withtwomoretrains
cameonin2009,andisrampingupproductiontodeliver100kb/dofcondensateand14kb/dofNGLby
2011. Qatargas Phase 3 is expected from 2010 with plateau production of 70kb/d of condensate and
7kb/d of NGLs, while Qatargas Phase 4 is expected to enter into production a year later and yield
70kb/dofcondensate.
The Rasgas Phase 1 started up in 1999 and yields 30kb/d of condensate. RasGas Phase 2 came into
productionin20042007andrampeduptoits30kb/dplateauofcondensateand15kb/dofNGLsover
2009.RasGasPhase3(train6and7)comeonduring2010andadd100kb/dofcondensateand45kb/d

67
Qatar NGL and condensate production

ofNGLs.AllinallweforecasttheNGLproductionofQatarto kboe/d
reach 1400kb/d by 2015, the highest NGL growth in the 3,000 100%
90%
world. 2,500 80%
2,000 70%
Qatar has a high liquids ratio, and all its gas developments 60%
1,500 50%
come with large quantities of associated NGLs. The liquids 40%
1,000
ratio of Qatar was 45% in 2008, and is expected to increase 30%
20%
towards49%overtheforecastperiod.Theliquidsratioofthe 500
10%
North Field as a whole is probably much lower than the - 0%
2000 2003 2006 2009 2012 2015
current liquids ratio indicates, but the country is developing
the condensate and NGLs early to boost the profitability of Gas production kb o.e./d
NGL kb/d
theprojects. NGL to gas ratio (RHS)
5.6.3 Iran
Despite having the worlds second largest reserves of natural gas, Irans marketed gas production was
only121bcmin2008,somewhatlessthanitsconsumptionof122bcm.Domesticdemandfornaturalgas
hasincreasedsharplyduetohighlysubsidisedprices.TotalgassubsidiestotalledanestimatedUSD16
billionin2007.Iransabilitytomeetitsdomesticneeds fornaturalgasandtoproducenaturalgasfor
exports and oilfield reinjection depends on political conditions and capability to execute projects.
Impediments to faster gas production growth in Iran are the threat of sanctions from the world
communityasareactiontoIransnuclearprogrammeandunattractivecontracttermsrelatedtoprice
subsidies.Morethan60%ofIransgasreservesarelocatedinnonassociatedfields.InadditiontoSouth
Pars, the main gas fields in production are North Pars, Tabnak and KanganNar. Since 2004 Iran has
added45bcmofnaturalgasproductionfromtheSouthParsfield.Thebulkofthefuturegrowthisalso
expectedtocomefromthatfield.
Existing gas pipeline Rasht Caspian Sea

Neka
TURKMENISTAN
Planned/under const. Kord Kui
gas pipeline
Tehran
Gas production area
Gas field Qom
LNG export plant
Arak
Under const./ planned
LNG export plant
I R A N
Planned LNG AFGHANISTAN
import terminal
Yazd
IRAQ
Kerman
SAUDI Rafsanjan
KUWAIT
ARABIA Kuwait
Mina al Ahmadi
South Pars IRAN Persian
PAKISTAN
North Field Gulf Assaluyeh Bandar Tombok
Doha South Pars
QATAR
(9) North Field (9)
(5) Al Manamah
BAHRAIN Ras Laffan OMAN
Abu Dhabi (5)
SAUDI OMAN
ARABIA QATAR Doha
U.A.E. Source:IEA
The boundaries and names shown and the designations used on maps included in this publication do not imply official endorsement or acceptance by the IEA.

68
Iran production outlook for natural gas and NGLs

NGL (kbd) 441 521 585 785 904 932 985 1,048 607 13.2 %
NGL to gas ratio 21.2% 29.0% 32.0% 40.0% 44.5% 44.4% 45.7% 45.2%

Iransmarketedgasproductionisprojectedtofallfrom121bcmin2008to104bcmin2009,andthen
riseagainto135bcmby2015.Thecountrysnaturalgasproductiontargetfor2015issetat146bcm.
Incremental gas is expected to come from South Pars phases 610 (45bcm) and possibly South Pars
phases12,15/16and17/18(60bcm),ofwhichonlyphase12isincludedinourforecast.TheBidBoland
expansionproject,with20bcmofincrementalvolumesfromtheAgharJari,MarunandAhwazfields,is
also included in the production target. Iran currently reinjects 3040bcm of natural gas, and the
WEO2009 assumes this volume increases to 100bcm by 2015. According to the Arab Oil and Gas
Directory, Irans gross gas production was 174bcm in 2007, of which 64% was marketed (111bcm),
while16.9%(29bcm)wasreinjectedand9.6%(17bcm)wasflared.ThisishigherthantheWorldBank
estimateofflaringwhichwas10.3bcmin2008,10.6bcmin2007,and11.3bcmin2005.
CurrentNGLproduction Iran NGL and condensate production

Iran does not publish official data for condensate and kboe/d
other NGL production, so estimates are based on 2500 75%
secondarysources. 65%
2000
55%
According to the Arab Oil and Gas Directory, Iran has 1500 45%
capacity to process around 180bcm of wet gas at 35%
1000
11gasprocessingcomplexes.TheseplantsextractNGLs 25%
15%
that are later fractionated in other plants, like the 500
5%
NGL1002300 plants of NIOSC that feed NGL products
0 -5%
into the Bandar Imam petrochemical complex and the
Natural gas kboe/d
Bid Boland gas refinery. Iran also has three export NGL kb/d
facilities for LPG, the most important of which is at NGL to gas ratio (RHS)
BandarAbbas.
There are several ongoing expansion projects in gas
processing plants that will increase the gathering and
processingcapacityofassociatedgas,themostimportant
ofwhichistheBidBolandexpansionandtheKhargIsland
gasgatheringproject.
OtherwisethevariousphasesofthenonassociatedSouth
ParsdevelopmentwillyieldthebulkofthegrowthinNGL
production from Iran. Phases 68 all entered into
productionin20082009,andPhases910areexpectedin
2010,yieldingatotalof200240kb/dofcondensateand
130kb/d of other NGLs. South Pars 12 is expected to
come into production by the end of the forecast period
andultimatelyadd130kb/dofcondensateand125kb/d
ofNGLs.LaterphasesoftheSouthParsdevelopmentare
expected to come into production beyond 2015. See
overview below for details of our forecasts. The political
Source:www.energytribune.com

69
riskandcontracttermsofIranareimportantimpedimentstogrowth,andshouldthesefactorsimprove
thegrowthprospectsfor the countrywould improveconsiderably bothin themediumandthe longer
term.
Iran NGL production forecast (kb/d)

Product Facility 2008 2009 2010 2011 2012 2013 2014 2015 2008-2015
Condensate SP phase 1 40 40 40 40 40 40 40 40 -
SP phase 2/3 80 80 80 80 80 80 80 80 -
SP phase 4/5 80 80 80 80 80 80 80 80 -
SP phase 6/7 and 8 10 70 95 129 132 132 132 156 146
SP phase 9/10 - - 13 55 80 80 80 80 80
SP phase 12 Petropars) - - - - - - 30 60 60
Nar & Kangan 32 32 32 32 28 28 26 26 (6)
Dalan & Aghar 9 9 9 9 9 9 9 9 -
Other Iran condensate 27 25 25 25 25 25 25 25 (2)
Bidboland expansion - - - 10 20 20 20 20 20
Kharg island gas gathering system - - - - - 3 4 5 5
Condensate Total 278 336 374 460 494 497 526 581 303
Ethane SP phase 4/5 49 48 48 48 48 48 48 48 (0)
SP phase 9/10 - - 8 32 46 46 46 46 46
Ethane Total 49 48 56 115 165 165 165 165 116
LPG SP phase 4/5 32 32 32 32 32 32 32 32 (0)
SP phase 6/7 and 8 3 25 38 50 50 50 50 50 47
SP phase 9/10 - - 6 23 34 34 34 34 34
SP phase 12 Petropars) - - - - - - 3 6 6
Kharg island gas gathering system - - - - - 25 45 50 50
NGL 100-1600) 80 80 80 80 80 80 80 80 -
LPG Total 115 137 155 210 246 271 294 302 187
Grand Total 441 521 585 785 904 932 985 1,048 607
5.6.4 Oman
Omani gas production was 26bcm in 2008 and is expected to increase marginally to 27bcm over the
forecastperiod.ThefirstgasproductioninOmanwasassociatedgas.TheYibalgasplantwasopenedin
1978,andthiseventmarkedthebeginningofthenaturalgasindustryinOman.Gaswasfirstfoundin
the 1960s in the Yibal and Natih fields. Infrastructure to exploit associated gas that had earlier been
flaredwasbuiltattheYibalfieldandtheSaihRawlfields.
Gas was later found in the Saih Nihyada, Saih Rawl and Barik fields. The natural gas output of Oman
increased strongly from 20002005, as gas was developed for exports from the two train Oman LNG
plant. The third train, referred to atQalhatLNG, cameon streamin2006.TheLNGplant is located at
QalhatinSur,340kilometresfromMuscat.
Oman production outlook for natural gas and NGLs

NGL (kbd) 83 88 103 106 109 112 117 120 37 5.4 %
NGL to gas ratio 18.7% 19.1% 22.4% 23.1% 23.7% 24.4% 25.3% 26.0%

70
Source:EIA Source:ArgusLPGWorld

Until2000allgasinOmanhadbeenassociatedwithoil,butthefieldsdevelopedtofeedtheLNGplant
were all nonassociated gas fields. The nonassociated gas developed in Oman during these years
appearstohavebeendrierthantheassociatedgas,asOmanscondensateproductiondecreasedinthe
years20012007,whilethenaturalgasproductionrosesharply.PDOoperatesthecentralreservoirsof
Saih Nihayda, Saih Rawl and Barik, which lie deep beneath the three oilfields and account for most of
Oman'snonassociatedgasreserves.
However,Omanseemstohaveasmuchcondensatereservescomparedtogasreserves,andsomegas
condensate fields producemorecondensatesthan gas. The Kauthergas field and gas processingplant
cameonstreamin2007andfurtherboostedOmanicondensateproduction.
The Petroleum Directorate of Oman (PDO)
provides Omani condensate data and this is
reported in the OMR. The level of condensate
productionfromOmanwas77kb/din2008.All
the condensate production of Oman is spiked
intocrude.
The Yibal gas plant which came in operation in

1978 prepared natural gas for distribution, and
extracted propane and butane. The propane
wasusedinthegasplantforcooling,whilethe
butane was bottled and sold at the domestic
market.Theplantisstilloperational.
Source:GasTechnology institute
However,OmandoeslittletosegregateLPGproduction,leavingmuchofC2C4intheirsalesgas.Their
LNGhasthe highestcalorificcontentintheworldnexttotheLNGfromLibyasdysfunctionalplant.In
additiontothat,propaneisconsumedwithinthegasplantsthemselves.Ourlatestestimatesrepresenta
downgradingfrompreviousones,whichwereinflatedbyrefiningLPGvolumes.
The gas processing plant related to Qalhat LNG, Saih Nihayda, has a capacity to extract 10kb/d of
condensateto7.3bcmofnaturalgas.AnEPCcontractwasrecentlyawardedtoincreasethecapacityof
theplantby25%,howevertheliquidsratioofthegasthatfeedsQalhatLNGislessthan10%.

71
ThefigureaboveshowsacomparisonofthecompositionofOmaniLNGcomparedtosomeotherLNGs.
WeseethatLNGsthatareaimedfortheJapanesemarketaretheoneswiththehighestNGLandhence
calorificcontent.
TheKautherfieldandgasprocessingplant,whichcameonstreamin2008,boostedOmanicondensate
production,whichisnowestimatedat100kb/d,andpossiblycouldreachalevelof120kb/doverthe
forecastperiod.OmanneedsthecondensatetospikeintoitscrudeoiltomeetthequalityspecofOman
blend.AstoitsLPGproduction,therearefewplanstomonetisemoreLPGonastandalonebasis.Asfor
the LNG, they are bound by contract to keep the quality at the high calorific level that suits their
JapanesecustomersthatusetheLNGforinputintogaspowerplantsthatareadaptedtohighlycalorific
natural gas. A change of the LNG sales contract conditions would enhance the potential for gas plant
liquidsproductionfromOman.
5.6.5 UnitedArabEmirates(UAE)
CurrentnaturalgasandNGLproduction
NaturalgasproductionintheUnitedArabEmirateswas
51bcm in 2008, and is expected to fall to 47bcm in
2009 and then increase over the forecast period to
56bcm by 2015. By contrast, NGL production is
forecasttoincreaseby75%overthesameperiod.
Abu Dhabi has an elaborate system to collect

associatedandnonassociatedgastoproducesalesgas
and natural gas liquids ranging from ethane to
condensate.Italsoproducessulphurasabyproductof
sourgasprocessing.Thenaturalgasprocessingandthe
extractionofNGLstakesplaceattheHabshanBabGas
Complexinthedesert,whichgathersNGLsfromtheBu
HasaNGLPlant,theAsabNGLPlantandtheAsabGas
Plant.ThewetgasfromtheBabfieldisproducedfrom
boththeassociatedThamamaCreservoirandthenon
associatedThamamaB,DandFandThamama6and7.
The NGLs from the Habshan complex are sent for
fractionation at the Ruwais NGL plant while the
condensate produced at the Habshan and Asab AGP
plantsisshippedbypipelinetothetwooilrefineriesat
Ruwais and Umm AlNar, operated by the Abu Dhabi Oil Refining Company (TAKREER). From the NGL
fractionation plant the ethane is sent to the petrochemical plant Abu Dhabi Polymers Company Ltd.
(Borouge), while the LPG is exported from the Ruwais jetty or used domestically. As Abu Dhabi has a
shortageofgas,ethaneandLPGarealsosometimesusedtosubstitutenaturalgas.Currentproduction
fromtheHabshancomplexisabout220kb/dofcondensateand210kb/dofLPG,atotalof430kb/d.
OffshoreNGLsareprocessedinconnectionwiththeLNGplantatDasIsland.NGLproductionfromDas
Island is estimated at 50kb/d of LPG and 10kb/d of naphtha/pentane. There is also condensate
productionintheemiratesofDubaiandSharjah,atatotalestimatedaround30kb/d.

72
UAE production outlook for natural gas and NGLs

NGL (kbd) 528 519 643 813 837 868 930 922 394 8.3 %
NGL to gas ratio 60.1% 63.5% 73.9% 91.3% 90.9% 91.6% 95.8% 96.4%

Three well documented new projects are coming on stream and are expected to raise the UAEs NGL
productionfrom528kb/din2008to922kb/din2015,anincreasethatputsAbuDhabiintheleagueof
Iran, Qatar andSaudiArabia interms of productiongrowthover theforecast period. Theprojects will
taketheliquidsratioofUAEupfrom60%in2008to96%in2015.SincetheUAEalreadyhasanelaborate
systemtoextractNGLthissuggestsadevelopmentof UAE NGL and condensate production
more optimal NGL capture or wetter gas as well as kboe/d
moregasreinjection.TheNGLcaptureisassumedto 1,200 100%
haveapotentialtoimprove,asthesystemsinplace 1,000 90%
areoftenpartly4030yearsold. 800
80%
600
The projects that will add NGL production over the 70%
400
forecastperiodarethecapacityincreaseatHabshan
200 60%
(OGD 3) and Asab (AGD 2), followed by a capacity
increase at the Ruwais NGL fractionation plant. - 50%
Further, there is the IGD (Integrated Gas 2000 2002 2004 2006 2008 2010 2012 2014
Natural gas kboe/d
Development)project.TheOGD3projectisassumed NGL kb/d
toadd120kb/dofcondensateand120kb/dofNGL NGL to gas ratio (RHS)
productionfrom2010to2012.TheAGD2projectis
assumedtoadd80kb/dofNGLsover2010to2011,whiletheIGDprojectisexpectedtoadd30kb/dof
condensateand110kb/dofNGLproductionfrom2013to2015.Muchofthisprojectisrelatedtogasre
injection to support oil production. Existing production is expected to slowly decline over the forecast
period.
5.6.6 Kuwait
Kuwaits natural gas production of 12bcm is expected to grow to 13bcm over the forecast period. In
2007Kuwaitstartednonassociatedgasproduction,butthenonassociatedgasisfromgascondensate
fields with high liquids content. Given its limited gas resources, Kuwait has sought to maximize
associatedgasrecoveryatitsoilfields.Allfieldsweretiedintoagasgatheringandprocessingnetwork
bythemid1980sandsimilarfacilitieswerealsoinstalledintheNeutralZonewhichisshared50/50with
SaudiArabia.KuwaitplanstoimprovethecapturealsointhePartitionedZone,whichstillflaressome
gas(1.8bcmin2008,whichwasdownfrom2.5bcmin2006).
Kuwaitstartedproducingnonassociatedgasinmid2008astheUmmNiqaandSabriyahfieldscameon
streamandadded1.4bcmofnaturalgasaswellas50kb/dofcondensateproduction,averyhighliquids
ratio.WeassumePhase2ofnonassociatedgasdevelopmentswillcomeonstreamin2012,andtakethe
total condensate production up to 165kb/d by 2014. The nonassociated gas is located in Northern
Kuwait, and aside from the Umm Niqa and Sabriyah fields the relevant fields are Bahra, Northwest
RaudhatainandRaudhatain.TheDorraprojectisrelatedtoafindfrom1960thatstraddlestheborders

73
between Kuwait, Iran and Saudi Arabia. We assume the Dorra project to come onstream after the
forecastperiodandtohavealowercondensatecontentthantheUmmNiqa/Sabriyahfield.
ThefirstphaseofthenonassociatedgasdevelopmentcausedlargechallengestoKuwaitOilCompany
(KOC) due to the complexity of the reservoir. KOC has yet to signal that it wants IOC involvement in
furtherstagesforthefielddevelopments.Sofar,Kuwaithasashortageofgas,andthecountrybecame
anLNGimporterin2009,withLNGimportsofabout1bcm,expectedtoincreaseintheyearstocome.
Kuwait production outlook for natural gas and NGLs

NGL (kbd) 161 190 195 205 223 308 320 320 159 10.3 %
NGL to gas ratio 76.6% 92.4% 93.7% 97.4% 104.5% 142.7% 146.8% 145.1%

Historical OMR Kuwaiti NGL figures are based upon the KNPC annual report, which details gas plant
liquidswithabreak downforpropane, butane and gas plantnaphtha fromthe natural gasprocessing
plantsinShuaibaandMinaAlAhmadi.CondensateproductionfromKuwaitwasestimatedat21kb/din
2008,whileotherNGLswerereportedbytheKNPCat140kb/d.
FortheoutlookNGLproductiongrowsintandemwithnaturalgasproduction,andisstableat155kb/d
from2011andonwards.TherampupplanforUmmNiqasetsthegrowthforcondensate,estimatedto
reach165kb/dby2014.
5.6.7 Syria
AccordingtoWEO2009gasforecasts,gasproductionisexpectedtostayattodayslevelof6bcm,well
belowmoreoptimisticprognosessuggestingSyriasgasproductioncouldreach15bcmshortly.Mostof
Syriasgasreservesarenonassociatedgas,butthecurrentproductionisassociatedgas,ofwhichsome
is reinjected after liquids extraction. The liquids ratio of Syria today is around 3040%. The recently
launchedSouthMiddleAreagasprojectisestimatedtohavealiquidsratioof13%.Thenextgasproject
tobedeveloped,thenonassociatedgasfieldsinthePalmyridesregionincludingtheJiharfield,seemsto
havealiquidsratioofonly9%,andbesmallerthanearlierprojects.However,thisregionissupposedto
have a higher potential and is where the future production growth could come from. Assuming
associatedgasisgraduallybeingreplacedbynonassociatedgas,weexpecttheliquidsratioofnatural
gastogodown.SyriarecentlystartedgasimportsfromEgyptviatheArabGasPipeline(AGP)tomeet
domesticneedsforgas.
Syria production outlook for natural gas and NGLs

NGL (kbd) 35 35 35 35 33 32 30 29 -6 -2.9 %
NGL to gas ratio 33.6% 38.1% 36.0% 35.4% 32.9% 30.6% 28.7% 26.8%

74
Syriaisasmallproducerofgas,butnotaninsignificantproducerofNGLs,albeitreliabledataisdifficult
tofind.GasproductioninSyriastartedin1984,andfourgasprocessingplantswerebuiltin1985,1988,
1991and2002.Afifthgasprocessingplantcameonstreaminlate2009.Existingdataandoutlookseem
reasonableforSyria,andnorevisionhasbeensuggestedfollowingthisreview.
Theoutlooksuggestsadeclinebasedonalowerliquidsratio,asnaturalgasproductionissettoincrease
slightly.Thisshouldreflecttheassumptionthatnewgasisdrierthancurrentgasthatisdeclining.The
SouthMiddleAreaGasProjectwhichincludedtheconstructionofagasprocessingplantnearFiroqlosto
processgas fromthe Qom Qom, AlFeidNorth and Abu Rabahfields is reportedtohave a capacity to
process2.6bcmofnaturalgasandyield4kb/dofcondensateand1.7kb/dofLPG,aliquidsratioofonly
13%.Thegradualstepupinproductionfromthisfacilityisassumedtoreplacedecliningproductionfrom
otherfacilities.
5.6.8 Bahrain
Around 20% of Bahrains 2007 natural gas production was associated gas from the declining Awali oil
field.HoweverproductionofnonassociateddrygasfromthePreKhuffformationbelowtheBahrainoil
field is increasing, which impacts the liquids ratio, as this gas is considerably drier than the associated
gas. Bahrain recently held a licensing round for their PreKhuffgas, but the interest among IOCs was
limitedgiventhelowliquidspotentialofthegas.
Bahrain production outlook for natural gas and NGLs

NGL (kbd) 10 10 9 9 8 8 7 7 -3 -4.5 %
NGL to gas ratio 5.9% 6.9% 6.1% 5.7% 5.2% 4.8% 4.5% 4.2%

Bahrainhasasmallliquidsproductioncomparedtoitsgasproduction,about7%.NGLsareextractedat
theSirtagasplant.
Asoilproductionfalls andassociated gasproductionisbeingreplaced bydryPreKhuffgastheliquids

ratio is set to decrease. Bahrain is an example of a country where it makes sense to let forecast NGL
productionfollowtheprofileofoilproduction.AplannedupgradingattheSirtagasplantmighthavea
positiveeffectonNGLproduction,althoughtheeffectisassumedtobemarginal.
5.6.9 Iraq
Withitsprovenreservesof3.2tcmofnaturalgasandgasprocessingfacilitieswithatotaldesigncapacity
of60bcm,Iraqhasapotentialtoincreaseitsgasoutputsubstantiallyovertheforecastperiod.TheWEO
forecastsabuildupfrom1.4bcmin2008to8bcmin2015,stillverylowcomparedtothepotential.Iraq

75
had a gross production of natural gas of

almost 14bcm in 2008, of which 7bcm
wasflared(WorldBank)1.4bcmreached
the market, while the balance was lost
duetoshrinkage,includingventing.
70% of the natural gas reserves are

associatedgas,(ofwhich83%islocatedin
theSouthernoilfields),10%isgascapgas
and 20% is nonassociated gas. The
largest accumulations of associated gas
arelocatedintheKirkuk,JamburandBai
Hassan fields in the north and in the
South Rumailia, North Rumailia and Al
Zubair fields in the south. The most
important nonassociated gas deposits
are Anfal, Chemchemal, Khashim al
Ahmar,JeriaPikaandMansouriyahinthe
North, the Sibba field South of Bashrah
and the Akkas field in the Westen desert
(closetotheSyrianborder).
Iraq is determined to increase its gas

production both for domestic
consumption, mainly for power
Source:www.westernzagros.com
generation and industry, and possibly for
exportthroughLNG.IraqearlierexportednaturalgastoKuwaitthroughapipeline.TheAkkarfieldonce
developedcouldexportIraqigasintoSyria.
Theonlynonassociatedgasproductionmarketedin2008reportedlycamefromtheAnfalfield,which
entered into production in 1990, and supplies about half of all the natural gas consumed in Iraq. The
natural gas was processed at the Jambur gas plant near Kirkuk. From there dry gas supplies power
stationsandpetrochemicalplants.
Iraq production outlook for natural gas and NGLs

NGL (kbd) 29 42 56 59 64 68 73 79 50 15.4 %
NGL to gas ratio 120.2% 58.4% 69.6% 67.2% 65.1% 63.1% 61.3% 59.7%

OfficialdataforcondensateandotherNGLproductionforIraqarepatchy,anduncertaintyprevailsover
historicalandcurrentproductionlevels.
Iraq has five gas processing plants with a total design feedgas processing capacity of 60bcm and NGL
production capacity of more than 200kb/d. The Khor alZubair gas plant near Basra is the most
importantone,whileothergasplantsarelocatedatNorthernRumailaandinKurdistan.Shellhaswona
contract to renovate the natural gas processing capacity in the Basra region in the south, but the
potential is yet to be realised. An entity named South Gas Utilisation Venture is established with
participationfromIraqsgascompanyandMitsubishiinadditiontoShell.Reportedlycontractualterms
ofthegasandLPGsaleshavesofarbeenhamperingprojectdevelopment.Iraqbecameacondensate

76
producerin2008,astheKhorMorintheKurdishregioncameintoproduction,operatedbyUAEbased
DanaGasinconsortiumwithCrescentPetroleum.Thefieldiscurrentlyestimatedtoyieldacondensate
productionof15kb/d.DanaGasalsobuiltanLPGfacilityatKhorMor,butnoestimateshavebeenseen
of the quantity of LPG that will be produced. They are currently looking at the development of the
Chemchemalfield.TheNGLbaselineandforecastofIraqarethereforeveryuncertain.
Giventheuncertaininvestmentclimateofthecountry,thisisreflectedinafairlyconservativegassupply
forecast in WEO2009. Based on historical Iraqi gas processing levels, a liquids ratio of 44% seems
reasonable. Since the natural gas production is forecast to reach 8bcm (132 kboe/d) a gas plant NGL
productionofabout59kb/dby2015hasthereforebeenderived.
5.6.10 Yemen
Yemensprovennaturalgasreservesareextremelyconcentrated,with84%locatedonBlock18,which
providesthefeedgasfortheYemenLNGliquefactionplant,and7.3%onBlock5,whichisoperatedby
HuntOil.However,gasreservesdiscoveredonothertracts(whicharefrequentlyassociatedwithoil)are
beingexploitedorcouldbeinthenearfuture.TheYemenLNGprojectisthemostimportantinvestment
ever made inYemen. It consists insupplying gas from Block 18,located inthe Marib region incentral
Yemen,througha320kilometresdedicatedpipelinetotheLNGplantlocatedattheportofBalhafonthe
southerncoastofthecountry.Theplanthasrecentlystartedproductionfromthefirsttrain,whilethe
construction of the second train is being completed. Total production capacity is expected to reach
6.7mt/yofLNGperyearbytheendof2010.
Yemen production outlook for natural gas and NGLs

Gas production (bcm) - 3 10 10 10 10 11 11 11 #DIV/0!
Gas production (kboe/d) - 50 176 177 179 181 182 184 184 #DIV/0!
NGL (kbd) 18 26 27 27 27 27 27 27 9 5.9 %
NGL to gas ratio #DIV/0! 52.8% 15.6% 15.5% 15.3% 15.2% 15.0% 14.9%

In Yemen liquids are removed from gas at four gas
processing plants. The associated gas is treated to
removecondensate,andextractpropaneandbutane.
Until recently, the lean gas was reinjected into the
reservoirs to boost oil recovery. The objective of
Yemen LNG was to recover this lean gas, and liquefy
andexportit.
Yemen has for a long time been processing about

17bcm of associated gas annually, notably from the
Marib/Jawf field. Before the LNG plant came into
production in October 2009, with a capacity of
9.2bcm, all of this gas has been reinjected after
extractionofNGLs.

77
Inspiteofacommercialgasproductiongrowthfromzeroto9.2bcmin2009,therearedoubtswhether
theNGLproductionofthecountrywillpickup,aspossiblynomoregasthanbeforewillbeprocessed.
However,weassumethatsome increasedcondensateproductionwillbeforthcoming fromYemen,as
thenaturalgasprocessingplanthasbeenrevampedtoprepareforthequalityrequirementsoftheLNG
plant,andourforecastassumes8kb/dofincrementalcondensatesupplyfollowingthestartupofthe
LNGplantin2010.
5.7 Africa
Africaholdsnaturalgasreservesof14.7tcm,anditsprovenreserveshavebeengrowingsteadily.Africas
gasreservesarehighlyconcentratedinNigeria,Algeria,EgyptandLibya,and93%ofitscurrentnatural
gasproductioncomesfromthosefourcountries,withAlgeriaaloneaccountingfor40%.Thenaturalgas
productionofAfricaisforecasttogrowfrom208bcmin2008to262bcmin2015,acompoundedannual
growthrateof3.3%.Alltheestablishedgasproducersincreasetheirgasproductionatlevelsclosetothe
regionalaverageovertheforecastperiod.Angolapoststhehighestgrowthinpercentagetermsasitis
forecasttolaunchitsLNGprojectby2012,basedonassociatedgas.Theshareofassociatedgastototal
natural gas production from Africa fell sharply from 2007 to 2008, and is expected to continue its
downwardtrend.ThecontributionfromunconventionalgasinAfricaismainlytightgas,andisexpected
togrowfrom8to10bcmovertheforecastperiod.
bcm Africa natural gas Africa NGLs

mboe/d
300 58% 5
44%
250 56% 4 42%
54% 40%
200 3
52% 38%
150 2
50% 36%
100 1
48% 34%
50 46% - 32%
0 44% 2004 2006 2008 2010 2012 2014
200720082009201020112012201320142015
Unconventional gas Natural gas (mboe/d)
Conventional gas NGLs (mb/d)
Liquids ratio (RHS)
Share of associated gas
Betterutilisationofassociatedgasandmoregascondensatefieldsbeingdevelopedshouldseeasharp
increaseinAfricasliquidsratio.BothtrendsareapparentinNigeriaandAngola.Overrecentyearsthe
liquidsratiofromEgypthasbeenfallingrapidly,aswetassociatedgashasbeenreplacedbydriernon
associatedgas.TotalNGLfromAfricaisforecasttogrowbyanaverageof5.5%annuallyfrom2008to
2015. Average annual growth of 11.7% is forecast between 2008 and 2010. In absolute terms NGL
volumesareforecasttogrowby549kb/dovertheforecastperiod,with299kb/dofthisgrowthtaking
placebetween20082010.
Nigeriaaccountsfor227kb/dofthegrowthfrom2008to2010with175kb/dfromtheApkocondensate
field, the Gbaran/Ubie project and an increase in NGL production due to additional volumes from the
EastFieldNGLIIproject.Algeria,whichistheworldssecondlargestLPGexporter,isalsoabouttoramp
up gas plant LPG production, expanding the capacity of their countrywide integrated gas gathering
system to process additional rich gas volumes from several new projects in the Sahara desert. Since
Algeria, Nigeria andAngola are all OPECmembers,OMRconventionrecords condensate volumeswith
NGL since condensate lies outside of OPEC production targets. Condensate is also included within
EgyptianNGLvolumesasreportedbyEGAS.

78
ThekeyuncertaintyofourNGLforecastforAfricaistheoperatingenvironmentinNigeriagoingforward.
Withabundantnaturalresources,andmuchgascurrentlyflared,thepotentialishigh,andmanyprojects
arebeyondengineeringphaseandcouldflourishiftheinvestmentclimateimproves.Lagsinupstream
investmentascomparedtomidstreaminvestmenthavecausedunderutilisationoftheBonnyLNGplant
and NGL extraction and fractionation capacity installed at both Bonny Island and other locations. For
both Nigeria and Libya historical and current NGL figures are difficult to assess due to lacking
transparency.
AnissueworthmentioningforAfricainrelationwithNGLsistheremarkableunderutilisationofLPGasa
fuelinsubSaharanAfrica.AsmanypeopleinAfricausebiomassforcooking,thescopeforimprovement
inqualityoflifeislargeifonecouldreplacebiomasswithLPGintheresidentialsector.Theproblemfor
subSaharanAfricahasbeenalackofinvestmentin,andmaintenanceof,infrastructuretodistributeLPG
andtheintegrationoflogisticalnetworks.
5.7.1 Egypt
Egypt holds natural gas reserves of 2.2tcm, lying third behind Nigeria and Algeria on the African
continent. Marketed natural gas production has grown from 22bcm in 2000 to 58bcm in 2008, and
natural gas is the main focus of the petroleum industry in Egypt. While associated gas production is
decreasingalongsideadecliningoilproduction,overallnaturalgasproductioninEgyptisexpectedtorise
from58bcmin2008to66bcmin2015,anannualgrowthrateof2%,thankstoasteadyflowofnon
associatednaturalgasdiscoveriesanddevelopments.
TheAbuMadi,BadreddinandAbuQirfieldsintheNileDeltacurrentlyaccountforapproximatelyone
halfofEgypt'sgasproduction,andarematurenonassociatedfields.TheTransGulfandtheRasShukeir
gasgatheringfacilitiesassureutilisationofassociatedgasfromoilfieldsintheGulfofSuez,andtheZeit
Bay and Abu Rodeis gas processing plants process associated gas in the Red Sea. Most current
exploration and production takes place in the Nile Delta region and in the Western Desert. Offshore
developments in the Mediterranean region include Port Fuad, South Temsah, Wakah, Rosetta, the
Scarab/Saffron fields and the newly discovered Satis field found by BP and Eni in early 2008. In the
WesternDesert,theObeiyedandKhaldafieldsarethemostimportantnaturalgasareas.
Egyptbeganpipelinegasexportsin2003withtheArabGasPipelinethatconnectsEgypttoJordan,and
recentlythe pipelinewasexpandedtoSyria.Egypt hasthreeLNGtrainsontheDamietta andthe Idku
LNG complexes, and Egyptian LNG production capacity reached 14bcm in 2006. In January 2008, the
World Bank approved loans for the Natural Gas Connections Project, which serves to switch
consumptionofLPGtonaturalgasthroughinvestmentinnewconnectionsandfurtherexpandnatural
gasuseindenselypopulatedlowincomeareas.
Egypt production outlook for natural gas and NGLs

NGL (kbd) 206 213 216 219 222 225 229 232 26 1.7 %
NGL to gas ratio 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4% 20.4%

79
NGLproductionandoutlook
EgyptianGascompanyEGASisagoodsourceforNGL
production data, with gas plant LPG, ethane and
condensatefigurespublisheddisaggregated.Egyptian
NGLproductionhasbeenincreasingfrom123kb/din
2000 to 206kb/d in 2008, an annual growth rate of
7%, compared to a natural gas growth rate of 13%
overthesameperiod.AboutonethirdoftheNGLsin
Egypt still come from associated gas production in
theGulfof Suez and the Red Sea,whichisdeclining
with oil production. Associated gas in Egypt has a
highliquidsratio,atabout60%,whilenonassociated
natural gas in Egypt is generally drier. In 2000 the
liquidsratioofEgyptwascloseto35%,buthasfallen
and subsequently stabilised at 20% over the recent
years. The natural gas developments that provide
feedgas to the Idku and Damietta LNG plants, the
Scarab/Saffron and the Simian, Sienna and Sapphire
fields,contributedtothedeclineintheliquidsratio, Source:www.graphicmaps.com
while some developments in the Western desert
have liquids ratios between 2030%. Egypt is thereby a country which exemplifies the trend of wet
associatedgasbeingreplacedbydriernonassociatedgas.
Egypt has 22 gas processing plants, and is currently investing in several new projects that will add
capacityforNGLextractionandfractionation.Historically,allgasgatheringandgasprocessingfacilities
wereownedandoperatedbystateGasco,whilemanyofthenewerfacilitiesareownedandoperatedby
private companies, like the Western Desert gas complex that is owned by the Khalda Petroleum
companyandElManzalaandWestKhilalaintheNileDeltathatareoperatedbyCenturionEnergyand
Melroseresourcesrespectively.
AbouttwothirdsofEgyptsLPGproductionisgasplantLPG.EgyptstillimportssomeLPGfromAlgeriato
meet its domestic demand. Although the countrys expanding natural gas network is slowly eroding
LPGsdominance,retailsalesofbutanecylindersforcookingreportedlycontinuetogrow.
TheNGLproductionofEgyptisforecasttoriseto232kb/dby2015.Thisisbasedupontheliquidsratio
stabilisingat20%,withassociatedgasbeingreplacedbydriernonassociatedgaswithaliquidsratioin
therangefrom530%.
5.7.2 Tunisia
NaturalgasproductioninTunisiaissettoremainstablearound3bcmfrom2008to2015.Comparedto
its limited natural gas production, NGL production is rather high at 8kb/d in 2008 rising to 30kb/d in
2015.
Tunisia production outlook for natural gas and NGLs
NGL (kbd) 8 8 17 28 29 29 30 30 22 21.1 %
NGL to gas ratio 16.5% 23.7% 32.8% 51.5% 51.1% 50.8% 50.5% 50.3%

80
TheMiskarLPGplanthasforalongtimebeenthesole
LPGplantinTunisia.TotalLPGproductioninTunisiais
3.5kb/d according to external sources, but this
includesrefineryLPG.NoestimateisavailableforLPG
productionfromtheMiskarLPGplant,whichissaidto
produce6kb/dofcondensate,andthereisaseparate
condensate pipeline that brings this to the export
terminalofSkhira.
The Hasdrubal gas and condensate field started up in

late2009,andwilladd13kb/dofLPGand15kb/dof
condensate from the Hannibal LPG plant. Half of the
production capacity is included in 2010 and full
productionisassumedfrom2011.
5.7.3 Libya
Libyas oil and gas sectors have been stunted by the impact of decadelong UN and US sanctions. The
muchhopedexpansionoftheenergysectorfollowingtheliftingofsanctionsin20032004,however,has
yet to materialise and the prospects for growth appear dimmer following the countrys resurgent
nationalism in 2009. However, while Libyas crude production has declined since the 1960s peak of
around3mb/d,naturalgasproductionhaspostedmodestgrowth.
Libya initially focused on reviving its oil sector after the lifting of sanctions, but so far without much
success. Development of the natural gas sector is also a priority in order to meet rising domestic gas
demand, increase gas exports to Europes growing market as well as free up crude oil currently used
domestically for export. Libya also needs to cut back on flaring and better utilise associated gas for
reinjectiontosupportoilproduction.AccordingtotheWorldBank,Libyaflared3.7bcmofnaturalgasin
2008, slightly less than the estimated 4.3bcm flared in 2005. Marketed gas production in 2008 was
17bcm, and is expected in increase to 22bcm over the forecast period. The West Libya Gas Pipeline
(WLGP),alsocalledGreenstream,whichcameonstreamin2005considerablyincreasedLibyasnatural
gasexportstoItaly.
In1971Libyabecamethesecondcountryintheworld(afterAlgeriain1964)toexportLNG.However,
the output from the LNG plant located in Marsa el Brega, has remained low due to sanctionsrelated
technical issueswhich have limited theplants ability to separate outLPG, and theplant liquefied less
than1bcmofnaturalgasin2008.Extensionstotheplantareplannedtocomeonstreamafter2010and
add3bcmofliquefactioncapacity.
Libya production outlook for natural gas and NGLs

NGL (kbd) 117 115 111 111 111 122 168 172 55 5.7 %
NGL to gas ratio 39.9% 40.1% 36.8% 35.2% 33.7% 35.6% 46.7% 45.8%

81
Gas plant LPG from Libya has been available since the 1970s. Occidental's Libyan plant at Zueitina
suppliedMediterraneanoutletsintheearly1970s,butLibyanLPGproductionhassincebeensuffering
fromtheUNsanctions.LibyahastwoNGLplants,theZueitinaplantwithacapacityof82kb/dandthe
MarsaelBregaNGLplantwithacapacityof190kb/d.
Progressin expandingandrehabilitatingoldfacilitieshasbeenslow,butcapacityshould increaseover

the forecast period, with NGL production expected to increase from 117kb/d in 2008 to 172kb/d in
2015.Condensateproductiongotaboostin2006astheWahaOilCompanysBahralSalamandWaha
fieldsreachedfullcapacity.TheprojectincludestheMellitahgasprocessingplantwhichextractsabout
45kb/dofcondensatefromthegas,andthedrygasisexportedthroughEnisGreenstream.TheWaha
OilcompanyisawhollyownedsubsidiaryoftheLibyanNationalOilCompanywhichworksinconsortium
with ConocoPhillips, Marathon and Amerada Hess. The consortium plans further oil and gas
developments, of which the NC98 field is expected to increase condensate production further to
97.5kb/dby 2014. Shell ismoving forwardwithplanstodevelopgasfieldsintheonshoreSirtebasin,
includingupgradingoftheMarsaelBregaLNGplant,whileBPhascommittedtoinveststronglyingas
drilling,andplansanintegratedLNGprojectifsuccessful.
OthermultinationalandnationaloilcompanieshavealsosecuredacreageinLibyaduringthelicensing
rounds in 20052007. However, a continued political instability hampers the development. We have
assumed increasing utilisation rate for the Marsa elBrega NGL plant over the forecast period, with
outputreaching82kb/dovertheforecastperiod,stillconsiderablybelowthenameplatecapacity.
5.7.4 Algeria
Annual forecast growth in natural gas production in Algeria is 4% from 82bcm in 2008 to 107bcm in
2015.Algeriahasscaledbackitsoilproductiontargetinthepasttwoyears,asitfocusesonraisingits
naturalgasexports.
Algeriahas 4.5tcm ofproven gasreserves.Its largestnaturalgas field,Hassi RMel, wasdiscovered in

1956andholdsprovenreservesofabout2.4tcm.HassiRMelaccountsforaboutaquarterofAlgerias
totaldrynaturalgasproduction.TheremainderofAlgeriasnaturalgasreservescomefromassociated
and nonassociated fields in the south and southeast of the country. Algeria has a large range of new
natural gas developments, including In Salah, In Amenas, Gassi Touil, Ohanet, Ahnet, MLE, Timimoun,
Touat, Reggane, Rhoude Nouss and Tinrhert, some of which are developed, while final investment
decisions are pending for others, as they are technically challenging and costly to develop. Algeria
became the worlds first exporter of LNG in 1964. Currently one third of Algerias natural gas exports
derivefromtheirLNGplantsinArzewandSkikda,thelatterofwhichhasbeenoutofoperationsincean
explosionin2004,butwillsoonbebackonstream.Algeriacurrentlyhas39bcmofcrossMediterranean
export capacity through the Transmed and MaghrebEurope pipelines. Two new LNG trains are under
construction,oneatArzewandoneatSkikda,whichwillreplacethethreeoldliquefactiontrainsatthis
site.Thenewtrainswilladd12.5bcmofnaturalgasexportcapacityby2013.Algeriaplanstoincreaseits
pipelineexportcapacitythroughexpansionsinTransmedandtheMedgazandGalsipipelines.

82
Algeria production outlook for natural gas and NGLs

NGL (kbd) 588 628 668 705 728 745 762 780 192 4.1 %
NGL to gas ratio 41.4% 41.6% 48.1% 48.0% 46.8% 45.2% 43.7% 42.2%


We have aligned OMR production estimates
more closely with Algerian Ministry of
Petroleum reports of condensate and NGL
production. The revision is partly a
reclassification between crude and
condensate,andpartiallyadownwardrevision
ofNGLnumbers. The Ministryfigures are also
inlinewithavailableexternalsources.
Sonatrachoperatesanoil,condensateandNGL
pipeline network that links Hassi RMel and
other fields to Arzew. Condensate and other
NGLs are extracted at several field level
processing plants, and NGLs are fractionated
into LPG and ethane at a plant in Arzew.
Algeria is the worlds second largest exporter
ofLPG,andwasalsooneofthefirstcountries Source:Sonatrach
intheworldtoexportlargecargoLPG.
Algeria is currently investing heavily to increase its capacity to extract, transport and fractionate NGLs
and condensate. On 24August 2009 the first stage of the 500km pipeline that will raise capacity to
transport NGL from the Hassi RMel plant to the Arzew export terminal from 9mt/y to 15mt/y was
completed.ThesecondphasewasduebecompletedinJanuary2010.InJuly2009a5mt/y(135kb/d)
condensatesplitterinSkikdabeganoperations.Itwillproduce4mt/yofnaphtha,withjetfuelandgasoil
beingtheothermainproducts.Algeriannaphthahasahighparaffincontentandisconsidereddesirable
as petrochemical feedstock. The plant is supplied by a 650km pipeline from the Haoud El Hamra oil
fields,nearHassiMessaoud,tothecoast.Thenameplatetransportationcapacitywillbe18mt/y.
Algerian gas plant LPG and ethane production is Algeria NGL and condensate production
forecast to reach 13mt/y by 2012, which kboe/d
2,000 60%
corresponds to 413kb/d. The forecast is based on
statementsfromofficialandindustrysourcesaswell 1,500
as ongoing capacity expansions of LPG plants and 50%
pipelines. Growth in NGL production in 2013 and 1,000
onwardsisexpectedtobeinlinewiththenaturalgas 40%
500
production growth. Some new streams of
condensatewillcomefromfieldssuchasElMerkand - 30%
the MLE development, both in the Berkine basin. 2000 2002 2004 2006 2008 2010 2012 2014
However there is also ongoing decline in existing Natural gas kboe/d
NGL kb/d
production, and there is no suggestion that overall NGL to gas ratio (RHS)
condensate production will increase. However, no

83
statementsaregiventhatoverallcondensateproductionissettoincrease.Thenewcondensatesplitter
described above is an investment to increase the possibility for Algeria to exporttheir attractive high
paraffinicnaphthainsteadofcondensate.Condensateproductionisthereforeassumedtobestableat
315kb/dovertheforecastperiod.Allinall,ourliquidstogasratiofallsforAlgeriaafter2010.Various
newergasdevelopmentprojectsforwhichtherelativeamountsofdrygasandNGLisdescribed,likeIn
Amenas, Ohanet and MLE, show a liquids ratio below the current level of 40%, with the possible
exceptionoftheBerkinebasinprojects,ElMerkandblock405a/b.Around9bcmofnaturalgasfromIn
Salah is said to be dry without any associated liquids. Nonetheless, Algerian liquids output rises by
200kb/dduring20082015.
5.7.6 Nigeria
Nigeriaholds5.3tcmofprovengasreserves,thehighestinAfrica.Nigeriahasalotofplanstoincrease
naturalgasproduction,whichiscurrentlyat35bcmtowhichonemustadd15bcmofflaringand5bcm
ofgasreinjectiontoarriveasgrossproduction.Ofthemarketedgas,21bcmwasexportedasLNGand
14bcmwasconsumeddomestically.Adding5bcmofexportsthroughtheWestAfricaGaspipelineand
9bcmofincreaseddomesticconsumptionwouldyield49bcmby2015.Eliminatingflaringandextracting
economicvaluefromthe associated gas is amajorpriorityoftheNigeriangovernment,andin2008 it
announced a Gas Master Plan, involving the construction of three gas gathering and processing plants
andthreepipelinesystemstofeedgastopowerplants.Theprojectcouldboostnaturalgassupplyby
9bcmby2011.InadditiononecouldassumethattheLNGplantatBonnyIslandwouldworkclosertoits
nameplate capacity of 30bcm and that more LNG projects would come on stream. However, the
WEO2009 natural gas production forecast is much less optimistic. They forecast 2015 natural gas
productionof44bcm,anannualgrowthof3.2%.Itgoeswithoutsayingthatthenaturalgasforecastof
Nigeriaishighlyuncertainandcouldeasilyreachmuchhigherlevelsgivenamorefavourableinvestment
climate.
Nigeria production outlook for natural gas and NGLs

NGL (kbd) 160 273 387 408 419 420 421 410 250 14.4 %
NGL to gas ratio 26.2% 43.3% 59.6% 61.0% 60.7% 58.9% 57.3% 54.1%

ItishardtogetanoverviewoftheNGLextractionandfractionationcapacityofNigeria.ThelargestNGL
fractionation plant, which also has the most important export terminal for LPG, is located at Bonny
Island, in connection with the Bonny LNG plant. Four gas trunklines from the Niger Delta as well as
offshore pipelines feed the LNG plant with gas, but upstream natural gas development in Nigeria has
laggedtheexpansionoftheLNGplant,whichhasbeenoperatingbelowcapacityduetolackofgasand
otheroperationaldifficulties.ThestrippingofNGLsfromgaspriortoitsshipmenttoBonnyhasalsoleft
theNGLextractioncapacityatBonnyIslandunderutilised.ThecapacityattheNGLfractionationplantat
BonnyIslandwas2.25mt/ybeforetrain6camein2008,whichcorrespondsto72kb/d.Assumingthat
theNGLhandling capacity increased proportionallywiththe natural gas liquefaction capacity,the NGL
capacity at Bonny Island should now be about 90kb/d. Another nearby NGL plant is the 11kb/d
Cawtorne Channel plant, which deliver stripped gas to Nigeria LNG. The ObiafuObrikom gas plant is
locatedfurtherupintheNigerDelta,andprocessesgasfromtheproductionlicensesOML6063.Thegas

84
is used for power generation, and the gas

plant has the capacity to extract 10kb/d of
NGLmarketedlocally.
Recently the offshore East Area field

operatedbyExxonmobilandNNPChasadded
50kb/dofNGLextractioncapacity,andthese
NGL volumes are being fractionated at an
NGL terminal off BonnyIsland.TheNGLsare
extractedfromageingoffshorefieldsoutside
theNigerDelta,andmostofthenaturalgasis
reinjectedtosupportoilproduction.Thisisa
classicalprojectthatshowshowthetrendof
betterutilisationofassociatedgas,evenifits
for reinjection, impacts NGLs production.
TheWorldBankestimatesthatNigeriaflared
14.9bcm of natural gas in 2008, down from
21.3bcmin2005,butstillthehighestnatural
gasvolumeflaredafterRussia. Source:ArgusLPGWorld
TheEscravosplantislocatedfurtherwestinthecountry,closertoLagos,andsuppliesnaturalgasforthe
domesticmarketandtheWestAfricanGasPipeline,(seeillustrationfromChevronbelow).Thisplantis
assumedtohavethecapacitytoextract9kb/dofNGLs.
External sources suggest that the total LPG

production of Nigeria was 53kb/d 2006 and
76kb/d in 2007. According to the Nigeria
National Petroleum Company (NNPC)
statistical report the total NGL production in
2008 was only 37kb/d, but no assessment
can be made as to the reliability and
completeness of these figures. However, the
Nigeria LNG (NLNG or Bonny LNG) complex
was out of operation most of 2008, and the
new train 6 has not yielded any additional
LNG production from NLNG, since there is a
lackoffeedgas.Asanoutcomeofthisreview
the historical OMR NGL production profile
wasreviseddown.
TheonlycondensatestreamincludedinOMR
figures in 2008 was the Oso condensate
stream. Assessment of the volume here
variesamongothersources,butexistingOMR
estimates appear reasonable and have been
Source:Chevron
retained.
Forcondensate,theOsofieldisforecasttodeclinefromits2009levelof66kb/d.TheAkpofield,which
cameonstreamin2009willadd175kb/dover2009and2010,whiletheGbaran/Ubiedevelopmentis
forecast to add 70kb/d of condensate by 2012. It is not sure whether the oil from this project will

85
actuallybecondensateoralightcrudeoil,butinourforecastwehaveassumedittobecondensate.All
told,condensateincreasesfrom69kb/din2008to281kb/din2015,anincreaseof212kb/d.
ForthegasplantliquidsforecastweassumeahigherutilisationoftheNGLcapacityattheBonnyLNG
plant.Inadditiontothat40kb/dofNGLvolumesfromtheEastFielddevelopmentisadded,eventhough
theextenttowhichthisplantisintegratedwiththeBonnyLNGplantremainsuncertain.NoGTLornew
LNGplantsareassumedtocomeonstreaminNigeriaovertheforecastperiod.However,withsomany
projects at or beyond engineering stage, an improvement in the investment climate of Nigeria could
drasticallychangethesceneforthisresourcerichcountry.
5.7.7 Angola
ForAngolathereareveryfewavailablesources
for NGL data. Angolan gas production is very
modest at 2bcm. There is one field that
supplies NGLs, the SanhaBomboco field. The
2008 OMR figure for NGL is 30kb/d while the
condensate figure is 20kb/d, in line with
external sources. There is a consensus that
Angola LNG will come on stream in 2012 and
commercialise associated gas that is currently
being flared at various fields. Development of
the Angola LNG Project includes construction
of an onshore liquefaction train with storage
capacity for LNG, LPG and condensate.
Additionally, a pipeline will be built to
transport natural gas to Angola markets. The
assumed condensate and other NGL output
from Angola LNG is included in the forecast
Source:Chevron
that takes Angolas total NGL output from
50kb/din2008to92kb/dfrom2013onwards.
Angola production outlook for natural gas and NGLs

NGL (kb/d) 50 50 50 50 86 92 92 92 42 9.1 %
NGL to gas ratio 446.4% 442.4% 409.2% 392.6% 81.4% 87.0% 86.7% 86.1%

5.7.8 EquatorialGuinea
The Equatorial Guinea LNG plant started up in April 2007. The Alba field had come on stream earlier,
withnaturalgaspreviouslypartlyusedformethanolproduction,partlyreinjected.Now,thenaturalgas
fromtheAlbafieldmainlysuppliestheLNGplant,butstillproducesmethanolaswell,whileadeclining
amountofliquidsisextracted.

86
AccordingtotheannualreportoftheAlba
fieldoperatorMarathon,outof65kb/dof
liquidsproducedin2008,17kb/dwasLPG
and48kb/dcondensate(41.3atfield,6.3
at plant) and 17kb/d of LPG, in
accordancewiththeOMRfigures.
The Alba field is in decline, but it is

assumed that new gas will be supplied
from other fields during 20112012 as
mentionedbyMarathonandillustratedin
the picture below, stabilising NGL
production.ThepotentialAlbaLNGtrain2
isnotassumedtocomeonstreamwithin
the forecast period. Bioko Island is
situated near the Niger Delta, and might
theoretically be supplied by natural gas
fromitsmoreresourcerichneighbour,but
thatsolutionisnotdeemedlikely.
Source:Marathon
Equatorial Guinea production outlook for natural gas and NGLs
NGL (kb/d) 65 59 52 46 46 46 46 46 -19 -4.8 %
NGL to gas ratio 75.4% 68.5% 60.3% 53.4% 53.4% 53.4% 53.4% 53.4%

87
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 S OURCES
6 Glossary
APIgravity
API(AmericanPetroleumInstitute)gravityisinverselyproportionaltothespecificgravity(SG)ofaliquid.
APIgravityisameasureofhowheavyagivenvolumeofthisliquidiscomparedtothesamevolumeof
water,andiscalculatedbytheformulaAPIgravity=(141.5/SG)131.5.AcondensatewithanAPIgravity
of50hasaspecificgravityof0.78,i.e.alitreofthiscondensatewillweighnotmorethan0.78kilogram.
Associatedgas
Associatedgasisnaturalgasassociatedwithoilaccumulations,whichmaybeeitherdissolvedintheoil
ormayformacapoffreegasabovetheoil.
Biofuels
Biofuelsaretransportationfuelsderivedfrombiologicalsourcesincludingcereals,cellulosicmaterials,
sugar,oilseedcropsandorganicwaste.TheOMRsupplyanddemandbalancesincludethebiofuels
ethanolandbiodiesel.
Bitumen
Bitumensareexceptionallyheavyhydrocarbons,eithernaturallyoccurringcrudebitumen(crude
bitumenproducedfromoilsands),orderivingfromtheresiduerefiningprocess.Bitumenishighly
viscousorsolidandmustbeeiterupgradedtosyntheticcrudeoilordilutedwithforexamplecondensate
toallowpipelinetransportationandrefining.
Butane(C4H10)
Anormallygaseousstraightchainhydrocarbonextractedfromnaturalgasorrefinerygasstreams.The
boilingpointunderatmosphericpressureis0.5C.
CNG(Compressednaturalgas)
Naturalgasthatiscompressedtoapressureof200250barandstoredintanks,inmostcasestobe
usedinvehiclesrunningonnaturalgas.
Coalbedmethane(CBM)orCoalseammethane
A type of unconventional natural gas, formed in the coalification process and found on the internal
surfaces of the coal. Tor extract the gas water must be removed from the coalbed to reduce partial
pressure. The large quantities of water, sometimes saline, produced from CBM wells pose an
environmentalriskifnotdisposedproperly.
Condensate
The liquids dissolved in natural gas in the reservoir that condense to a stable liquid in atmospheric
pressure.ConsistsofmoleculestypicallyfromC5toC8,andmightalsobecharacterisedasalightcrudeoil
withAPIgravityabove50andalowsulphurcontent.

88
N ATURAL G AS L IQUIDS S UPPLY O UTLOOK 20082015 G LOSSARY
Condensatesplitter
Condensatesplittersaresimpledistillationtowerswithcutpointsadjustedtohandlingahighproportion
oflightproductandtoweroverheadssufficienttohandlethatvolumeflow.
Dilutionofbitumen
Dilution of bitumen is when naphtha or condensate or another light hydrocarbon is added to non
upgraded bitumen to make a fluid that can be transported by pipeline. The blend is called dilbit. The
diluenttypicallymakeup1732%ofthedilbit.
Downstream
Theoilindustrytermusedtorefertoallpetroleumactivitiesfromtheprocessofrefiningcrudeoilinto
petroleumproductstothedistribution,marketing,andshippingoftheseproducts(seeUpstream).
Drygas
Gas that does not contain heavier hydrocarbons or that has been treated to remove heavier
hydrocarbons.
Ethane(C2H6)
Anormallygaseousstraightchainhydrocarbonextractedfromnaturalgasorrefinerygasstreams.The
boilingpointunderatmosphericpressureis88.6C.
Fieldcondensate
Condensate may be extracted from a gas stream at the field or at a gas processing plant. Condensate
which is recovered as a liquid from natural gas in field separation facilities is referred to as field
condensate.Fieldcondensateisthesameasleasecondensate,whichisthetermusedintheUSA.
Flaring
Burning off unused natural gas, typically at an oil producing field where the associated gas cannot be
economicallyutilised.Sometimesgasisflaredasasafetymeasuretomitigateoverpressureofothergas
systems.
Fractionation
SeeNGLfractionation
Gasliquids
If we talk about gas plant liquids and refinery LPG and ethane alike we may refer to all of it as gas
liquids,asopposedtothetermnaturalgasliquidsthatincludeonlytheliquidsthatwederivefrom
naturalgas.
Gasplantcondensate
Condensate may be extracted from a gas stream at the field or at a gas processing plant. Condensate
thatisextractedatagasprocessingplantisreferredtoasgasplantcondensate.
Gasplantnaphtha
Naphthamaybeproducedbothatarefineryandatagasprocessingplant.Naphthathatisproducedata
gasprocessingplantisreferredtoasgasplantnaphtha.

89
Gasprocessingplant
Afacilitydesignedtorecovernaturalgasliquidsfromastreamofnaturalgaswhichmayormaynothave
passedthroughfieldseparationfacilities.Thesefacilitiesalsocontrolthequalityofthenaturalgastobe
marketed.
GastoLiquids(GTL)
GastoLiquidstechnologyinvolvestheproductionoflowemissiondieselandnaphthafromnaturalgas
reserves.ProductionofthesefuelsisincludedinboththesupplyanddemandsideofOMRbalances.
Hub
Physicalorvirtuallocationwheremultiplenaturalgaspipelinesinterconnectornaturalgasisassumedto
bedeliveredbetweenmultipleparties.
Hydrocarbons
An organic compound containing only carbon and hydrogen. The term is often used commonly for
naturalgas,oilandcoal.
Isobutane(C4H10)
Anormallygaseousbranchchainhydrocarbon.Itisacolourlessparaffinicgasthatboilsatatemperature
of11.7C.Itisextractedfromnaturalgasorrefinerygasstreams.
Leasecondensate
Seefieldcondensate.
LPG(LiquidPetroleumGases)
LPGisacommontermforpropane(C3H8),butaneandisobutene(C4H10)oramixofthose.
Methane(CH4)
Thelightesthydrocarbonmolecule.Theprimarycomponentofnaturalgasandparticularlyofdrynatural
gas.
Midstream
The midstream is the part of the oil and gas value chain that lies between the upstream and the
downstream.Typically,thisreferstoinfrastructuresuchaspipelines,butalsothewholeentirerangeof
oilgasseparatorsandgasprocessingplants.TheNGLfractionation,wherebyNGLsaresplitintoLPGand
other products, is strictly speaking a part of downstream operations, but the NGL extraction and
fractionationoftentakespartatthesamecomplex.
Naphtha
Apetroleumdistillationfractionmostcommonlyusedasfeedstockdestinedforthepetrochemical
industry(e.g.ethylenemanufacture).Naphthacompriseshydrocarbonsinthe30Cand210Cdistillation
rangeorpartofthisrange.

90
Naturalgas
Light paraffinic hydrocarbon mixture, mainly methane, small quantities of ethane and propane and in
variableproportionsnitrogen,carbondioxideandhydrogensulphide.Naturalgascanbeassociatedwith
crudeoilorbefoundaloneinnonassociatednaturalgaswells.
Naturalgasliquids(NGL)
Natural gas liquids (NGLs) are light hydrocarbons that are dissolved in associated or nonassociated
natural gas in a hydrocarbon reservoir, and are produced within a gas stream. They comprise ethane,
propane,butaneandisobutene(collectivelyLPG),pentaneplusandgascondensate,i.e.moleculeswith
28carbonatoms(C2H6C8H18).Abovethegroundtherichgasstreamisunstable,asheaviercomponents
will condense,while lighter componentsnormally remain gaseous, and willhavetobe separated from
thedrygasinagasprocessingplant(GPP).Hence,therearetwocategoriesofNGLscondensateand
otherNGLs.AscondensatehasmanycharacteristicsthatmakeitdifferentfromotherNGLs,itisusefulto
distinguishbetweenthetwo.
Naturalgasoline
Naturalgasolineisanaturalgasliquidwithavaporpressureintermediatebetweennaturalgas
condensateandliquefiedpetroleumgasandhasaboilingpointwithintherangeofgasoline.Thetypical
gravityofnaturalgasolineisaround80APIandthemaincomponentsaretypicallyhydrocarbonsinthe
rangeC5C6.Naphthaissometimesreferredtoasnaturalgasoline.
NGLextraction
TheprocessbywhichNGLsareseparatedfromnaturalgas.
NGLfractionation
TheprocessbywhichNGLsareseparatedintodistinctproducts,or"fractions,"suchaspropane,butane,
andethane.
Nonassociatednaturalgas
Naturalgasthatisnotincontactwithcrudeoilinthereservoir.Naturalgasthatisproducedfromawell
thatdoesnotproduceotheroilthanNGLs.
Olefins
Aclassofunsaturatedaliphatichydrocarbonshavingoneormoredoublebonds,producedbycracking
naphthaorotherpetroleumfractionsathightemperatures(e.g.propylene,ethylene).
Paraffinichydrocarbons
StraightchainhydrocarboncompoundswiththegeneralformulaCnH2n+2.
Pentane(C5H12)
Astraightchainhydrocarbon.Itisacolourlessparaffinicgasthatboilsatatemperatureof36.1C.Itis
extractedfromnaturalgasorrefinerygasstreams.

91
Pentanesplus
Amixtureofhydrocarbons,mostlypentanesandheavier,extractedfromnaturalgas.Includes
isopentane,naturalgasoline,andplantcondensate.
Petrochemicalfacilities
Facilitieswherepetrochemicalsareproduced.
Petrochemicals
Organic and inorganic compounds and mixtures that include but are not limited to organic chemicals,
cyclic intermediates, plastics and resins, synthetic fibers, elastomers, organic dyes, organic pigments,
detergents,surfaceactiveagents,carbonblack,andammonia.
Play
Asetofknownorsupposedaccumulationsofhydrocarbonssharingsimilargeologicproperties,suchas
sourcerock,migrationpath,trappingmechanism,andhydrocarbontype.
Propane(C3H8)
Anormallygaseousstraightchainhydrocarbonextractedfromnaturalgasorrefinerygasstreams.Itisa
colourlessparaffinicgasthatboilsatatemperatureof42.1C.
Reinjection
Reinjectionistheactofputtingproducedgasbacktothereservoirfromwhich itcame ortoanother

reservoir. Gas is reinjected either to support pressure in the reservoir or because the gas can not be
economicallyusedelsewhere.
Salesgas
Drygasmarketedundercontrolledqualityconditions.
Salesgasspecification(spec)
Thesalesgasspecification(spec)isthequalityspecificationswithwhichthedrygashastobecompliant
in order to be marketed. The spec will regulate the calorific content, acidity, dew point and other
characteristicsofthegas.
Segregatedcondensate
Condensatemarketedassuch.
Shalegas
Natural gas that is produced from reservoirs predominantly composed of shale (a finegrained
sedimentaryrock),ratherthanfrommoreconventionalsandstoneorlimestonereservoirs.
Specificgravity
SpecificGravityistherelativeweightperunitvolumeofwater(ordensity)ofanygivensubstance.With
waterhavinganSGof1.0,mostoilslieinanSGrangeof0.61.0.ThelowertheSG,thelightertheoil.

92
Sourgas
Naturalgasthatcontainssignificantamountofhydrogensulphide.
Spikedcondensate
Condensateblendedwithcrudeoilandmarketedasacrudeoilblend.Thecondensatemightbespiked
asaviscositycutterorinorderfortheblendtoobtainatargetAPIgravity.
Unconventionalgas
Unconventional gas is gas that is more technologically difficult or more expensive to produce than
conventional gas. Unconventional gas resources can be divided into coalbed methane, tight gas, shale
gasandmethanehydrates.
Upstream
OilsectoractivityintheOMRisdefinedasexploration,appraisal,developmentandproductionactivities
pertainingtoreservesofcrudeoil,naturalgasliquidsandcondensates.Processing,transportationand
marketingactivitiesareexcluded.
VeryLargeGasCarriers(VLGC)
A Very Large Gas Carrier is an LPG vessel with capacity above 60,000 scm. An LPG vessel is used to
transport ammonia and liquid gases (ethane, ethylene, propane, propylene, butane, butylenes,
isobuteneandisobutylene).Thegasesaretransportedunderpressureand/orrefrigerated.
Wetgas
A mixture of hydrocarbon compounds and small quantities of various nonhydrocarbons existing in the
gaseous phase or in solution with crude oil in porous rock formations at reservoir conditions. The
principal hydrocarbons normally contained in the mixture are methane, ethane, propane, butane, and
pentane. Typical nonhydrocarbon gases that may be present in reservoir natural gas are water vapor,
carbon dioxide, hydrogen sulfide, nitrogen and trace amounts of helium. Under reservoir conditions,
naturalgasanditsassociatedliquefiableportionsoccureitherinasinglegaseousphaseinthereservoir
or in solution with crude oil and are not distinguishable at the time as separate substances. Wet gas
mightalsobereferredtoasrichgasorsimplynaturalgas.

93
7 Sources
MinistriesofEnergy
UKdepartmentofEnergyandClimateChange
MinistryofOilandMines,Algeria
VenezuelanMinistryofOilandMines(PODE)
MinistryofEnergyandEnergyIndustries,Trinidad&Tobago
Hidrocarburos,Bolivia
Regulatoryagenciesetc.
ABARE,Australia
ANP,Brazil
BPMigas,Indonesia
DanishEnergyAgency(DEA),Denmark
EnergyInformationAdministration(EIA),USA
EIA report Natural Gas processing: The crucial link between Natural Gas Production and Its
TransportationtoMarket2006
EnergyPolicyandPlanningOffice(EPPO),Thailand
IAPG,Argentina
NationalEnergyBoard(NEB),Canada
NorwegianPetroleumDirectorate(NPD),Norway
Perupetro,Peru
PetroleumDirectorateofOman(PDO)
StatisticalAgencies
StatCan,Canada
StateStatscommittee,Uzbekistan
Annualreportsofnationaloilcompaniesandotheroilcompanies,companyfactbooksandwebpages
AmeradaHess
AngolaLNGwebpage
AtlanticLNGwebpage,Trinidad&Tobago

94
Banagas,Bahrain
BG
BP
Chevron
ChinaNationalOffshoreOilCompany(CNOOC)
ChinaNationalPetroleumCompany(CNPC)
ConocoPhillips
EGAS(Egypt)
ETAP(Tunisia)
ExxonMobil
GASCO(UnitedArabEmirates)
Gassco(Norway)
Gazprom
KuwaitNationalPetroleumCompany(KNPC)
Lukoil
Marathon
NigerianNationalPetroleumCompany(NNPC)
Novatek(Russia)
Pemex(Mexico)
Pertamina(Indonesia)
Petronas
Petrortrin(Trinidad&Tobago)
SaudiAramcoAnnualreport
Shell
Sibur(Russia)
Sinopec(China)
Sonatrach(Algeria)
Statoil

95
IEApublications
WorldEnergyOutlook(WEO)2009
GasMarketReview2009
MediumTermOilMarketReport(MTOMR)2009
Sourcesthatwesubscribeto
OilandGasJournal,directoryofgasprocessingplants
FACTs:LPGdatabook,Condensatedatabook
ArabOilandGas
ArabOilandGasDirectory
OilandGasJournal(OGJ)
OilgramNews
OilDaily
MEES
PetroleumReview
Interfax(Russia)
VariousArgusPublication;ArgusFSUE
CISdatabooks
IndianOil&Gas
Reportsonflaring
PFCEnergy(2007),UsingRussiasAssociatedGas
CERA(2008),ArisingtideSignificantGrowthExpectedinRussianLPGProduction,Consumption,and
Exports
CERA(2007),PutinlowerstheboomonFlaringbutwhattodoaboutallthatassociatedgas
CERA(2007),ReversingthecurseRussianOilCompaniesWidenEffortstoExtractValuefromGrowing
AssociatedGasStream

96
Purposeboughtsources:
ArgusLPGworld:Fortnightlypublicationwithsearchabledatabasebackto1998.
CondensateEastofSuez,multiclientstudybyAlTroner,AsiaPacificEnergyConsultants(APEC)
ArabOilandGasDirectory(2009)
Other
Petrochina geologists ZHANG ShuiChang and ZHU Guang You (2008), Natural gas origins of large and
mediumscalegasfieldsinChinasedimentarybasins
Notesonuseofestimatesandstatisticsfromothersources
Allhistoricallevelsofnaturalgasproduction,oilproductionandNGLproductionarefromtheIEAAnnual
OilStatistics(AOS),MonthlyOilStatistics(MOS)orMonthlyOilDataService(MODS).
All oil production forecasts are based on Medium Term Oil Market (MTOMR) Update from December
2009.
All natural gasproductionforecasts including splits inassociated andnon associated gas, conventional
andunconventionalgasoncountryorregionlevelareforecastsformarketedgasproductionmadefor
thepurposeoftheIEApublicationWorldEnergyOutlook(WEO)2009.Thefigureswereneitherinitially
preparedto be usedonthe disaggregated level in whichtheyhave been used inthis study,nor to be
usedforsuchashorttermoutlook.
All reserves estimates quoted are from Cedigaz, which was also the main source for WEO2009. For
referencereservestablesfromBPandOGJhavebeenused.
AllflaringlevelsquotedarefromtheWorldBank,GlobalGasFlaringReductionProgramme.

97

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NaturalGasLiquids

2008 NGL production by category and reporting practice

World Supply of Condensate and other NGLs 2008-2015

A field processing centre can vary in

depend on the composition of the hydrocarbon Atthefieldprocessingfacilityattheplatformoil,gasand

Unlikecrudeoilandfield condensate, a rich,orwet, gas streamwill alwaysrequiretransportation in

Definition of dry gas, NGL, LPG and non- hydrocarbon gases

Natural hydrocarbon gases from methane to pentane

Name Chemicaldenotation Illustration Boilingpoint

Methane C1H4 161.6C

Ethane C2H6 88.6C

Propane C3H8 42.1C

Butane C4H10 0.5C

Isobutane C4H10 11.7C

Pentane C5H12 36.1C

The balance oftheLPGmarket ishighlysensitivetochanges inLPGpricingdue to highdegreeof fuel

infrastructuretooptimisevaluecreationfrom allhydrocarbons.This approach was alsouseful to do a

Natural gas forecast from World Energy Outlook 2009 (bcm/y)

As oil production declines in many countries compared to gas production, traditional

NGL from LNG projects 2008 - 2011

Indonesia Tangguh LNG Bintuni Bay, Papua 2009 10.3 5 3%

Peru Peru LNG Pampa Melchorita 2010 6.0 80 78%

Australia Pluto Burrup Peninsula 2011 6.5 8 7%

World Supply of Condensate and other NGLs 2008-2015

Australia 74 79 83 87 91 95 99 104 30 5.0%

Non-OECD Europe 15 15 14 14 13 12 10 9 (6) -6.5%

USA - - 3 7 - 70 (50) (108) (145) (188) (231)

Australia - - - - - 5 (2) (13) (14) (15) (16)

Russia 65 61 58 58 65 154 214 150 173 198 223

Total non-OPEC 109 130 88 121 134 259 139 52 98 100 80

compounded annual growth rate of 7.6%. This 7,000

4.2 NonOPEC Non-OPEC NGL production

0.4mb/d over the forecast period, a 7,000

compounded annual growth rate of 1.0%, 6,000

includes only those condensate volumes

TotalNGLproduction in NorthAmerica isexpectedtofallbya compoundedannualrate of0.8%from

OECD North America natural gas OECD North America NGLs

USA production outlook for natural gas and NGLs

US NGL production is forecast to decline from the 2009

Canada production outlook for natural gas and NGLs

Mexico production outlook for natural gas and NGLs

Natural gas kboe/d NGL kb/d

Eurasia natural gas Eurasia NGLs

800 30% 15 10%

Thetwomostimportantnewgas fields inNorwayareGja (2010)andSkarv(2011),butalsoTyrihans

Norway production outlook for natural gas and NGLs

2010, although the upgrade is aimed at 0 -10%

UK production outlook for natural gas and NGLs

Netherlands production outlook for natural gas and NGLs

Russia production outlook for natural gas and NGLs

Grand Total 89.0 536.3

Source: Web pages and annual reports of the companies

Assumed liquids content and volumes of Russian associated vs non-associated gas

Kazakhstan production outlook for natural gas and NGLs

everdiscoveredoutsideoftheMiddleEast, isassumedtocomeonstream withintheforecastperiod,

Azerbaijan production outlook for natural gas and NGLs

Turkmenistan production outlook for natural gas and NGLs

Uzbekistan production outlook for natural gas and NGLs

Latin America natural gas Latin America NGLs