Unit 1 1

Notes

Basic Concepts
Objectives
After reading this unit, you will be able to:
y Understand what is petroleum, what are its
constituents, and their significance.
y Know about composition and characteristics of oil and
gas.
y Understand what are the main products from oil and
gas and their uses.
y Get familiar with some of the common concepts,
definitions and terminologies used with respect to oil
and gas.

Introduction
Oil industry is perhaps the most exciting industry in the
history of civilization. Although the history of oil traces back
to seepages of oil as early as 3000 B.C., the real thrill of it
started with the oil boom in the USA. When Rockefeller
was asked to tell very briefly how people get rich, he replied
“Some people find oil, some don't”.

It's amazing how much oil and gas has penetrated into our
lives today. The toothbrush we use to start the day, the suit
we wear, the fuel we use in our cars to drive to office, the car
interiors, back home with cozy furniture, tapestry, and
mattress of the bed we sleep on - all are petrochemicals
i.e. chemicals from petroleum.

Fig. 1.1
Petrochemicals in our Lives

Polyester Clothing Nylon Can

PVC Pipes Acrylic Carpet

 Understanding Oil & Gas Business

2 Oil business has been responsible for prosperity, war,

Notes intrigues and adventure.

Search of oil and gas leads us to some of the most exotic

forests, deserts, and ocean. Perhaps some of the most
beautiful man made sights in the world are offshore
platform in deep ocean, array of offshore rigs in a remote
desert or jungle or an illuminated petrochemical complex at
night.

Fig. 1.2
Offshore Jackup Rig

Let us understand the importance of oil and gas industry by

looking at its share in the energy supply to the world (Fig.
1.3). More than 60 % of the energy needed in the world is
provided by oil and gas.
Fig. 1.3
Distribution of Energy Supply
 UNIT 1 Basic Concepts

And it is not really as expensive as it sounds (Fig. 1.4). 3

Notes
Fig. 1.4
Price Comparison

To understand oil and gas business, one needs to

understand a whole spectrum of activities from oil well to
petrochemicals.

It is also important to understand the trend and future of the

industry in terms of technology, economics and pricing of
energy resources. Energy price is very important for the
economy of any country. As stated earlier, oil and gas
provide over sixty percent of the energy requirement of the
world. Oil had been the dominant component of the mix. Oil
prices have been controlled from time to time to a high level
by the petroleum exporting countries (OPEC). But one
positive development is that now natural gas is overtaking
oil. During the year 2000, the increase in the energy
consumption of the world was 180 Million Tons of oil
equivalent. Out of this, share of oil was 20%, share of gas
was 55% and that of coal was 15%. Its is expected that gas
will replace oil as dominant energy provider in near future.
It is cleaner, cheaper and new discoveries and reserves of
gas field are coming up in many parts of the world including
India.

Very often the question comes up how long the

hydrocarbon resources (oil and gas) will last. Many
predict oil and gas will start depleting in another 20 to 30
years.
 Understanding Oil & Gas Business

4 But the world is keeping on adding new hydrocarbon finds

Notes and developing technology to recover more hydrocarbons
from existing oil and gas fields. Also major R&D work is
going on to find how to exploit huge reserves of ‘Methane
Hydrates’ i.e. an unstable compound of water and
methane, lying untapped deep below the ocean in many
parts of the world including coastal areas of India.

It is a fact that although the oil and gas industry will

continue to dominate for several decades from now, at
some point of time other forms of energy will take over. Oil
and gas industry generates wealth, and a part of the wealth
is being put into R&D to innovate for the future. We shall
cover the topic in a later section on future trends. Let us not
call the industry just oil and gas industry - it is energy
industry.

Let us start on the path of understanding oil and gas

business. The first step is to understand what is oil and
what is gas, how it originated and what we get out of it.
Unit 1 focuses on getting to understand the basics.
 UNIT 1 Basic Concepts

What is Petroleum 5
Activity 1a
Petroleum is a word derived from the Latin words Petra
(rock) and Oleum (oil). It essentially comprises of naturally
occurring hydrocarbons i.e. compounds made of carbon
What is the difference
and hydrogen atoms. These hydrocarbons are trapped
between crude oil and
below the surface of the earth, in porous rocks, in the form
vegetable oil in terms
of oil and gas. of composition and
properties?
From where did the hydrocarbons come? There are
various theories. The most accepted theory is the organic
theory:

6 Hydrocarbons came from remains of the bodies of pre-

historic land based animals, marine organisms
(plankton) and vegetation, which were washed away
and buried below the earth during upheavals on the
earth's surface millions of years ago.

6 In the course of time the buried organic matters

decomposed and the carbon and hydrogen present in
these reacted under heat and pressure to form various
compounds, generally hydrocarbons.

6 The hydrocarbons got trapped in the porous rocks and

were covered by hard sedimentary rocks that formed
over it. They acted as “cap” or seal to prevent
hydrocarbons from escaping.

As explained later, carbon and hydrogen atoms can join

together to form molecules of various sizes and structures.
Hydrocarbons could be a small molecule with combination
of one or a few carbon atoms with hydrogen (e.g. Methane
CH4 , Ethane - C2H6). Or it could be very large molecule by
combination of dozens of carbon and hydrogen atoms (e.g.
Wax - C20H42) or even thousands of carbon and hydrogen
atoms (e.g. Polythene).

Petroleum is essentially composed of hydrocarbons with

some other impurities. The words ‘petroleum’, ‘oil and
gas’ and ‘hydrocarbon’ are all used synonymously in the
oil and gas industry.
 Understanding Oil & Gas Business

6 Hydrocarbons in petroleum could be in gaseous, liquid

Notes or solid form depending on the type and size of
hydrocarbon molecule:

6 It can be in gaseous form as natural gas, which can be

associated with oil in an oil field or found free of oil in a
gas field.

6 It can be in liquid form as crude oil (dark and viscous), or

condensate (clear and volatile like motor gasoline).

6 The solid and semi-solid forms of petroleum are called

asphalt and tar.

Petroleum as a general term is used for all three mentioned

above.
Table 1.1
Light and Heavy Hydrocarbon Molecules

Name Formula Phase

Methane CH4 Gas
Hexane C6 H14 Liquid
Octane C8 H18 Liquid
Wax C20 H42 Solid

Reservoir, Well and Well Fluid

Through the burial and decomposition of organic material,

huge amount of hydrocarbons are formed below the
earth's surface. Movements and convulsions below the
earth's surface resulted in different types of geological
formations , where the hydrocarbons are trapped. In these
formations, the hydrocarbons are contained by porous
rocks known as source rock, covered with strata of hard
sedimentary rocks known as cap rock which settled over
them.

When huge quantity of recoverable hydrocarbon is trapped

in rock formations below the earth, it is called Reservoir.
Fig. 1.5 depicts a typical formation of a reservoir. The
surface on earth above the reservoir is called oilfield or
gas field or condensate field depending on what it
produces.
 UNIT 1 Basic Concepts

Fig 1.5 7
Hydrocarbon Formation Notes
Well pipe Earth Surface

Sediments forming
impervious layer called
Cap Rock.

Water
Earth movements cause
folds in earth crust.

Gas

Oil

Hydrocarbons trapped by
the Cap Rock, in the ‘pores’
of sedimentary rock act as
a reservoir.

It must be noted that the reservoir in an oil field is not like a

pool of liquid or a container filled with gas. It is oil or gas
trapped in pores of porous sedimentary rocks, covered by
impervious cap rock.

To produce oil from the reservoir, wells are drilled through

the surface of the earth. A well is then perforated at right
location from where the oil or gas enters the well pipe and
rushes out because of high pressure.

Formation of reservoir structure is explained in greater

detail in Unit - 3.

What is Well Fluid?

The fluid that comes out of the well in an oilfield or gas field
is called well fluid.

Well fluid is a mixture of crude oil, natural gas and

saline water along with small amounts of sand and
sludge. The water is called formation water or produced
water.

Points to Remember

If the crude oil had been just made of hydrocarbons,

processing to get the final products would have been easy
and at low cost. But a number of undesirable components
come out with the well fluid, which increases the processing
blocks and processing cost.
 Understanding Oil & Gas Business

8
Activity 1 b 6 Other components like sulfur compounds, carbon
dioxide, nitrogen, traces of metals are also present.
Is Helium a useful Their removal constitutes part of processing.
chemical? What are
its uses? 6 Proportion of oil, water and gas may vary widely from
one field to other. It changes substantially with time
during production.

6 Normally, well fluid comes out on its own pressure, which

depletes with time. Artificial methods of recovery are
used in later stages of production.

Crude Oil and Natural Gas

The first processing step in an oilfield is separation

between crude oil, natural gas and produced water.

What is Crude Oil?

Crude oil is a mixture of about 500 organic chemicals,

predominantly hydrocarbons (molecules made of
carbon and hydrogen). It is recovered from underground
reservoirs, normally 1000 - 5000 meters down the earth.

Crude oil can be of wide variety and characteristics. It could

be very fluid, very viscous or semisolid. The colour could be
black, dark brown, amber or light brown.

It is also called Petroleum.

What is Natural Gas?

Natural gas is a mixture of the lightest hydrocarbons like

methane, ethane, propane and butane. It also contains
water to its saturation limit. It may also contain hydrogen
sulphide (H2S), carbon dioxide (CO2), nitrogen (N2) and
occasionally small amounts of helium (He).

When natural gas comes out of the well along with crude
oil, it is called associated gas. Associated gas is produced
along with crude in a field which is essentially an oil
producing field.
 UNIT 1 Basic Concepts

When the well produces mainly gas with very little liquids, it 9
is called free gas. Free gas production can be shut when Notes
we do not want it.

When acid gases like CO2 and H2S are present in

substantial quantity, the gas is called sour gas. Otherwise
it is called sweet gas.

Various Forms of Natural Gas

There often exists a lack of understanding regarding the

various terminologies or nomenclature used in the industry
in describing components or forms of natural gas. The
most commonly used ones are NGL, LPG, LNG, and
CNG. Let us understand what are these and how they differ
from natural gas.

NGL: During production or transportation of gas, the

heavy components such as pentane or hexane, condense
due to natural cooling and separate out as liquids. This is
called NGL (Natural Gas Liquids).

As the name suggests, this is not really a gaseous

component, but volatile liquid.

LPG: The propane/ butane component of the natural gas

is liquefied under moderate pressures and is supplied as
cooking gas fuel.

This is called LPG (Liquefied Petroleum Gas)

LNG: Natural gas in bulk is liquefied under very low

(cryogenic) temperature for transportation in large
quantities by marine tankers. This is bulk of the natural gas
in liquefied form and is re-vaporized after receiving it at its
destination from tankers, to be used as natural gas. The
objective of converting the gas to LNG is transportation in
large quantities or export by marine tankers.

This is called LNG (Liquefied Natural Gas).

 Understanding Oil & Gas Business

10 CNG: Natural gas is compressed to high pressures for use

Notes as automotive fuel or for transportation in small quantities.
This is natural gas in highly compressed form but not
liquefied.

It is called CNG (Compressed Natural Gas).

Elementary Concepts on Hydrocarbons

Now that we know crude oil is made of around 500

components, mainly hydrocarbons and natural gas is
mainly light hydrocarbons, it becomes important to
understand a little basic about hydrocarbon molecules.

The whole petroleum and petrochemical industry

revolves around

6 Starting with the hydrocarbon molecules as produced

naturally from the well.

6 Rebuilding them into valuable products by various

types of processing.

What is Hydrocarbon?

Hydrocarbons are compounds made of carbon and

hydrogen. The hydrocarbon molecules are formed by-

6 Bonding of hydrogen atoms to carbon atoms.

6 Bonding of a number of carbon atoms to form chain or

cycle or a combination of chain and cycle.

6 The number of carbon atoms bonded together can be a

few or many, in various combinations, creating
numerous chemicals.

6 The bonding of carbon atoms could be in the form of a

straight chain, branched chain or cyclic manner.
 UNIT 1 Basic Concepts

Typical hydrocarbon structures are depicted in Fig. 1.6. 11

Notes
Fig. 1.6
Hydrocarbon Structure

Straight Chain Hydrocarbon Cyclic Hydrocarbon

H H H H H H
| | | | | |
H - C- C- C- C- C- C - H (C6H14)
| | | | | |
H H H H H H
Toluene
C 7H 8

The phase (solid, liquid or gas) of the hydrocarbon

depends on the number of carbon atoms joined together
in a chain e.g.

CH4 (METHANE) : GAS

C6H6 (BENZENE) : LIQUID
C20 H42 (WAX) : SOLID

Crude oil is made of a mixture of more than 500

components, mainly Hydrocarbons, which are the
desired components. Crude oil contains from light
components as dissolved gases (LPG) , light liquids
(Petrol, diesel) to heavy stock like wax, tar and resins.

The more carbon atoms a hydrocarbon molecule has,

6 the "heavier" it is (the higher is its molecular weight).
6 and the higher is its boiling point.

Composition of Crude Oil

Crude oil is predominantly made of hydrocarbons.

It is composed of three main hydrocarbon groups:

6 Paraffins
6 Naphthenes
6 Aromatics
It also contains unstable hydrocarbons called olefin.

Paraffins are straight chain compounds, chemically

stable. Lighter ones (CH4 , C2H6) are gas. Heavier
molecules are liquid (oil) or solid (wax).
 Understanding Oil & Gas Business

12 Naphthenes consist of carbon rings, with/without side

Activity 1d chains. Saturated with hydrogen, naphthenes are also
chemically stable. Lighter naphthenes are liquids and
Write down structural heavier ones could be solid.
formula of seven
hydrocarbons made Aromatics are compounds having a ring of six carbon
of six carbon atoms atoms with alternating double and single bonds and six
hydrogen atoms. They are relatively unstable.

Olefins are double bonded hydrocarbon chains, normally

produced during high temperature processing of
petroleum. Olefins are unstable and polymerize easily i.e. a
large number of olefins can combine together easily to form
large gummy or plastic molecules.
Fig. 1.7
Types of Hydrocarbons
Paraffins Olefins

Methane Ethane Propane Propylene

CH4 C 2H 6 C 3H 8 C 3H6

Normal Butane
nC4H10
Isobutane
Aromatics

Cyclohexane
C6H12 Dimethyl Cyclopentane
C7H14
Naphthenes

Benzene Xylene
C 6H 6 Toluene C8H10
C 7H 8
 UNIT 1 Basic Concepts

Some Important Concepts on Crude Oil 13

Notes
Carbon Numbers

The hydrocarbons are often referred in terms of number of

carbon atoms rather than whole formula.

Example:

C1 = Methane
C4 = Mixture of Butane and hydrocarbons with 4
carbon atoms
C7 = Mixture of all hydrocarbons with 7 carbon
atoms.

For further clarity let us put down some of the paraffin

hydrocarbons the symbol (-) indicating carbon to carbon
bonds:

Methane CH4 CH4

Ethane C 2H 6 CH3 - CH3
Propane C 3H 8 CH3CH2CH3
Butane C4H10 CH3 - CH2 - CH2 - CH3
(normal butane or n-butane)

Butane structure can also be

branched chain type as
given below:

CH3 - CH - CH3
CH3
(Isobutane or i-butane)

Both the structures of butane have same number of carbon

atoms and same number of hydrogen atoms i.e. C4H10.

The only difference is how the carbon atoms are bonded

with each other. This makes them different chemical
entities but with very similar and close physical properties
like boiling point and vapor pressure. The branched chain
hydrocarbons of same carbon numbers, same number of
hydrogen atoms and same chemical formula are called
isomers.
 Understanding Oil & Gas Business

14 Now let us look at Pentane.

Notes
Pentane C5H12 CH3 - CH2 - CH2 - CH2 - CH3
(n-pentane)

Pentane can have quite a few isomers:

CH3 - CH - CH2 - CH3 CH3 - CH - CH3

CH3 CH2
CH3

Thus one can have more and more isomers as the number
of carbon atoms in the chain increases.

In addition to the numerous isomers, there are other types

of hydrocarbons like olefins (double bonded or triple
bonded hydrocarbons). C5 and higher hydrocarbons can
have cyclic structures (naphthenes and aromatics) and
there could be molecules with combination of cyclic and
straight chain hydrocarbons.

For example C6 hydrocarbon can be compounds of -

6 Normal paraffinic chain structure (e.g. normal hexane)

6 Isomers (iso-hexanes)

6 Olefinic structures or structures with double bond

(hexenes)

6 Cyclic structure (benzene)

Thus just saying C6 means a number of hydrocarbons with

six carbon atoms put together in various forms.

That explains:

6 How innumerable varieties of hydrocarbon molecules

are possible.

6 How with same number of carbon atoms, say C8,

numerous hydrocarbon compounds are possible.

Higher the number of carbon atoms, more numerous is the

possible hydrocarbon compounds.
 UNIT 1 Basic Concepts

Classification of Crude Oil 15

Activity 1e
Various crude oils are often referred by their API Gravity.
API Gravity is expressed as (141.5/ Sp. Gravity - 131.5).
As specific gravity is in the denominator, API Gravity is
higher for lighter crude and lower for heavier crude.
Calculate API Gravity
A comparative idea of this gravity unit can be obtained by of crude oils with
comparison with water: specific gravity of
0.8, 0.9 and 0.95
Water: 10 API

Typical API Gravity figures for crude oil are

Mumbai High Crude : 40 API - Light Crude

Arabian Crude : 34 API - Medium Crude
Venezuelan Crude : 15 API - Heavy Crude

There could be sub-categorization as Medium Heavy or

Light Medium.

Another common classification is based on

Characterization Factor, which depends on API Gravity
and Boiling Point.

The crude oils are also classified in terms of chemical

nature e.g.

6 Paraffinic base

6 Asphaltic base

6 Intermediate base

6 Naphthenic base

Crude oils for which the residue after distillation contains

paraffin wax is called paraffinic. If the residue contains
asphalt, it is called asphaltic base and so on.

Refinery processing scheme and product yields depend

on type of crude in terms of chemical nature and gravity.
It also indicates the type of product it can yield.
 Understanding Oil & Gas Business

16 As typical example:
Notes
6 Paraffinic base crude do not yield good bitumen (road
tar) and is not good for lubricating oil manufacture. But it
is good for diesel.

6 Light crude contains more of gasoline.

6 Medium crude is good for diesel production.

6 Heavy crude may give better bitumen.

6 Naphthenic crudes are good for lubricating oil.

Cut or Fraction

Crude Oil and its products are mixtures of several

components. Each component has a boiling point. It is
interesting to examine what would be the boiling point of
mixture of several liquids.

Q - What is the boiling point of a mixture of two liquids A and

B mixed 50-50, A and B having a boiling points of 70oC and
o
80 C respectively?

Q - What is the boiling point of a mixture of four liquids in

equal parts having boiling points of 100,200,300 and
o
400 C?

None of the above mixtures will have a single boiling

point. If you start boiling such a mixture, it will start boiling
close to the boiling point of the lightest component. The
lightest component will start vaporizing faster and as it gets
removed (along with some of heavier components), the
boiling temperature will keep rising. Towards end the last
bits of the heaviest component will be left behind and will
boil at close to its boiling point.

Thus mixtures do not have a single boiling point, it has a

boiling range - from the initial boiling point to the final
boiling point.
 UNIT 1 Basic Concepts

Liquid mixtures are identified with their boiling range. 17

Crude oil being a mixture, has a boiling range. Each Notes
product like gasoline or kerosene are also mixtures and
have a boiling range.

Cuts, Fractions and Carbon Numbers

Crude oil is a mixture of over 500 components. It has a

boiling range of around 40-600oC. Each product from
Crude oil is also mixture of several components
(hydrocarbons). The hydrocarbons range from C1 to C65
in terms of carbon numbers.

Product of a particular boiling range taken out of crude is

defined as cut or fractions.

The products are identified as cuts from crude of certain

boiling ranges and carbon numbers.

Table 1.2
Petroleum Product Cuts and Carbon Numbers

Product / Cut Boiling Range Carbon Number

Natural Gas <20 oC C1- C4
Gasoline 40 - 200 oC C5 - C10
Kerosene 180 - 250 oC C10 - C15
Diesel (Gas Oil) 240 - 350 oC C14 - C20
o
Jet Fuel (ATF) 170 - 240 C C10 - C15
o
Lube Oil 350 - 450 C C20 - C30
Bitumen/Tar 450 oC+ C30 ++

Petroleum Products

Crude oil (Oil) and natural gas (Gas) mixed along with
water, comes out of the well as well fluid. Crude oil and
natural gas together can be broadly referred as petroleum.
Petroleum is just a raw material. Let us see what products
we get from oil and gas that comes out from well head.
 Understanding Oil & Gas Business

18 Well Head to Energy and Petrochemicals

Notes
There are two distinct uses of well head oil and natural gas -
as fuel and as high value products. Primary use of the
petroleum products in the early days of its exploration has
been as fuel. But later with the development of
petrochemical area (plastics, fibers etc.), emphasis has
shifted to greater valorization of the raw material. Let us
look at the table below to understand this.

Table 1.3
Petroleum as Fuel and as Value Products
Fuel and Products Calorific Value Price
(Kcal/Kg) US Dollars/Ton
Coal 6,500 80
Crude Oil 10,400 150
Fuel Oil 10,000 120
Motor Gasoline 11,000 180
Polythene Not fuel 500
Polystyrene Not fuel 550

The high calorific value of the petroleum products, its low

cost in the past and its suitability for use as relatively clean
fuel created incentive to consume as fuel. But in the current
economic scenario, valorization to higher value products
has become integral part of oil and gas industry.

It is important to note that besides producing fuel and

automotive products like gasoline or diesel, both crude oil
and natural gas provide feed stock for petrochemicals.
Feed stocks are component of crude oil and natural gas
that are converted into high value petrochemical products
like polythene, polyester, synthetic rubber and synthetic
fiber etc. It is apparent from the table above, there is
substantial valorization once the oil or gas is converted to
petrochemicals.

The macro-system from well head to Petrochemicals has

been dealt in detail in the next section. For an initial
understanding of the petroleum products let us have a look
at the simple block diagram given in Fig. 1.8.
 UNIT 1 Basic Concepts

Fig. 1.8 19
Petroleum Utilization Blocks Activity 1f

Oil
Reservoir Oil field Transportation
Processing
Gas Name five items of
daily use made from
Oil
Gas petrochemical source
Naphtha Refinery and name the petro-
Refinery Products
chemical -
Petrochemical
Gas Feed stock Petrochemical Petrochemical e.g. Toothbrush is
Processing (Ethane / Propane) Complex Product made from nylon.

Gas Power Power

Generation

The various blocks in overall system are:

6 Well fluid is processed at the oilfield first. Oil and gas

are separated, made transportable and despatched to
the Refinery and Gas Processing Facility respectively.

6 Refinery produces products like petrol, diesel oil,

lubricating oil etc. It also produces feed stock (Naphtha)
for petrochemical (plastic, fiber etc.) manufacture.

6 Gas Processing Facility purifies the gas from

undesirable components and separates feedstock for
petrochemical production.

6 Petrochemical feed stocks from Gas Processing or

Refinery or both are sent to a Petrochemical Complex
for production of petrochemical.

6 The balance gas is used as fuel for power generation or

as industrial fuel.

Each individual block in the above diagram could be a

separate company. And each of these blocks could be
located far away from each other in the same or different
countries.

This makes the oil and gas industry a real global industry.
 Understanding Oil & Gas Business

20 Some important terms often used in oil and gas industry

Notes with respect to the block diagram -

Offshore : Oil or gas field situated in the sea / ocean.

Onshore : Land based oil or gas field.

Upstream :The blocks covering reservoir, production,

processing and transportation of oil and gas is referred as
upstream blocks.

Downstream:Gas Processing, Refinery and

Petrochemical Facilities are referred as downstream
blocks.

Products from Natural gas

The natural gas is made mainly of the four lightest

hydrocarbons i.e C1 (Methane), C2 (Ethane), C3
(Propane) and C4 (Butane). As gas separates out of the
crude oil, it pulls out a little bit of heavier hydrocarbons like
C5, C6 etc.

Table 1.4 shows the typical composition of gas and use of

various components towards high value product.

Table 1.4
Gas Composition and Utilization

Component Composition Utilization

Volume %
Methane (C1) 50-96 Fuel, Petrochemical
feedstock, power generation
Ethane (C2) 2-15 Petrochemical feedstock
Propane (C3) 1-12 Petrochemical feedstock,
LPG
Butane (C4) 0.5-3 Petrochemical feedstock,
LPG
Heavies (C5+) (NGL) 0.1-1 Refinery blending stock,
petrochemical feedstock
Hydrogen Sulfide (H2S) 0-15 Toxic, corrosive and
undesirable component
Carbon Dioxide (CO2) 0-30 No fuel value, corrosive,
undesirable component
Nitrogen 0-30 No fuel value, corrosive,
undesirable component
Water Saturated Undesirable component
Total 100
 UNIT 1 Basic Concepts

The points to note here are that: 21

Notes
6 There is a wide range of gas composition, varying from
field to field and well to well.
6 Only consistent trend is the reducing pattern of the
hydrocarbon constituents from the lightest to the heavier
ones e.g methane followed by ethane and heavier
hydrocarbons.
6 Utilization of gas as fuel is the easiest but lowest in the
value chain.
6 Utilization of gas to make petrochemicals is the highest
in the value chain.

Hence very often the components of the gas are separated

by gas processing to be used for manufacture of
petrochemicals.
While Table 1.4 gives a range for gas composition, typical
gas composition are given in Table 1.5.
Table 1.5
Typical Gas Composition
Component Methane rich Associated gas Sour gas Gas with high
(Volume%) Sweet Gas (mildly sour) N2
Methane (C1) 94.5 76.5 71.5 62.5
Ethane (C2) 2.8 12.2 10.2 4.2
Propane (C3) 1.0 6.5 5.7 2.5
Butane (C4) 0.2 1.8 1.0 0.5
Heavies (C5+) (NGL) Traces 1.0 0.5 0.1
Hydrogen Sulfide(H2S) Nil Nil 3.5 Nil
Carbon Dioxide 1.5 2.0 7.6 5.4
Nitrogen Nil 300 ppm Nil 24.8
Water Saturated Saturated Saturated Saturated
Total 100.0 100.0 100.0 100.0

Obviously each of these gases will have different

processing techniques and problems in the Gas
Processing Plant. These will be dealt with later. But let us
look at the obvious -

6 The methane rich gas will have very little feedstock for
petrochemicals.
6 The associated gas is rich in petrochemical feedstock
and LPG.
6 The sour gas will need treatment to remove highly toxic
and corrosive Hydrogen Sulfide.
6 The nitrogen rich gas will have low calorific value.
 Understanding Oil & Gas Business

22 Products from Crude Oil

Notes
The five hundred odd components mostly hydrocarbon
ranging from C1 to C65 gives wider range of products.
Each of the product by itself is a composite of numerous
hydrocarbons. The crude oil is processed in the refinery to
separate the base stock (raw products) by distillation into
'cuts'. Then the various product base stocks are processed
and treated to meet specifications.

Table 1.6
Products from Crude Oil Refining

Product Use Key Specifications

LPG Domestic fuel, Vapor Pressure
Petrochemical
feedstock
Naphtha Petrochemical Boiling range,
feedstock composition
Motor gasoline Automotive fuel Octane number
Kerosene Domestic fuel, Smoke point
lighting
Aviation Turbine Aero plane fuel Freezing point
Fuel

Diesel oil Automotive fuel Cetane number

Fuel oil Industrial fuel Viscosity

Lubricating oil Industrial lubricants Viscosity
Bitumen (asphalt) Road tar Penetration Index

Paraffin Wax Medicine, cosmetics Pharmaceutical specs.

The important petroleum products produced in bulk in a

refinery are presented in Table 1.6. Each of the products
has to meet certain performance specifications. Only one
typical specification is stated in the table for a preliminary
understanding of its significance with respect to the usage.
It must be remembered that besides performance
specifications, there are strict specifications to meet
environment and emission norms. These are related to
polluting components like sulfur, aromatics etc.
 UNIT 1 Basic Concepts

Petrochemical Products / Petrochemicals 23

Activity 1a
What are petrochemicals? Petrochemicals are usually
plastic products and chemicals that are derived from
petroleum and natural gas and are made on a large scale
(approximately >10,000 tons per annum upwards). As
indicated in the earlier sections, certain components from
gas processing plants and refinery are used as feedstock
for manufacture of petrochemicals (e.g ethane, propane,
naphtha).

Petroleum products from refinery and natural gas, supply

over 50% of the feedstock for the entire chemical industry
and more than 50% of organic chemicals.

As you can see in the next table, petrochemical products

have permeated into every facet of our lives.

A vast majority of them are polymers, whose molecules are

tailored by reaction process to suit specific characteristics
or properties.

Table 1.7
Petrochemicals
Types Bulk Petrochemicals Use

Plastics Polythene Bags, laminates, boxes,

Polypropylene shoes, fibers, toys, electronic
Polystyrene goods, engineering items,
PVC numerous items of daily use
Polycarbonate

Fibers Polyesters Fabric, clothing, bags,

Polypropylene ropes, carpets, and
Nylon numerousother irtems
Polyurethane
Cellulose
Polyacrylonitrile

Units Specifically Used in Oil and Gas Industry

Oil industry uses certain specific units for production rates
and volumes which will be bused frequently in our text. Due
to past history of oil and gas industry which is
predominantly the history of exploitation of hydrocarbon
resources by the companies of American origin, the
American units are more often used in the industry rather
than Metric Units. Here are some important units
commonly used with which one must get familiar.
 Understanding Oil & Gas Business

24 6 Crude-oil volume is usually measured in barrels.

Notes
6 One barrel holds 42 gallons (159 liters).

6 Weight or mass of crude in India is in metric tons

(tonne).

6 A barrel of average crude oil weighs 0.150 ton, as a

thumb rule. It must be remembered that it depends on
the density of the crude oil.

6 Million Barrels of Oil Equivalent (MBOE) means

amount of gas or any other fuel whose calorific value or
heating value is equivalent of one million barrels of
crude oil.

6 Oil production capacity or refinery capacity are often

expressed in Barrels Per Day (BPD) or Barrels Per
Standard Day (BPSD). Roughly 20,000 BPSD is
equivalent to 1 Million Tons per year of crude, taking an
average density of crude. [Note: It obviously will depend
on density of crude oil.]

6 Some typical conversion figures used in the oil industry

are given in Table 1.8.

Table 1.8
Commonly Used Measurement
Units in Petroleum Industry

Unit Weight or Volume Conversion Factor

1 Metric Ton (Tonne) = 7.33 Barrels
= 1.165 Cubic Meters
1 Barrel (Bbl) = 0.136 Tonnes
= 0.159 Cubic metres
= 1 Kilo Liter (KL)
1 Cubic Meter (CuM) = 0.858 Tonnes
= 6.289 Barrels
1 Million Tonne of Crude = 1.111 Billion CuM of Natural Gas
= 39.2 Billion Cubic Feet Natural Gas
= 0.805 Million Tonnes LNG
= 0.90 Million Tonnes Crude Oil
1 Billion CuM of natural gas
= 0.73 Million Tonnes LNG
= 1.38 Billion CuM of Natural Gas
1 Million Tonne of LNG
= 1.23 Million Tonnes Crude Oil
1 Million Tons Per Year of = 20,000 Barrels per standard day of
crude crude
 UNIT 1 Basic Concepts

Summary 25
Notes
In this section we talked about the origin of petroleum (oil
and natural gas) and its composition. Oil and gas are made
mainly of hydrocarbons that originated from decomposed
organic material buried under earth's surface. Elementary
chemistry was touched upon to clearly define what is
hydrocarbon.

We defined the various forms in which gas is used like

LPG, LNG, NGL or CNG. Also the various products from
oil and gas were identified. Petrochemical products were
defined and how oil and gas provides the feedstock for
manufacturing valuable petrochemical products was
explained.

We learnt the definition and concepts regarding:

Reservoir Reservoir Rock Cap Rock Trap

Well Fluid Crude Oil Natural Gas Produced Water
Associated Gas Free Gas Sweet Gas Sour Gas
NGL LNG LPG CNG
Boiling Range Cuts Fractions
Offshore Onshore Platform FPSO

Besides common terminologies, commonly used units for

measurement of weight and volume of petroleum was
explained.

Questions

Since this section explains elementary concepts about

crude oil and defines certain basic terminologies used in
the industry, an objective type questionnaire or quiz is the
best way to judge the competence attained by the
participants.

Objective type questions

Please circle the correct answer or answers. Each

question has one or more correct answers.
 Understanding Oil & Gas Business

26 No. Question Answer

Notes 1 Total number of chemical (a) 100
components in crude oil is- (b) 500
(c) 250
2 The predominant components in (a) Paraffin
crude oil are known as (b) Aromatics
(c) Hydrocarbon
3 Reservoir or hydrocarbon deposits (a) True
below the earth surface are found as (b) False
huge lakes or sea of oil. (c) Partly true
4 LPG is made of (a) Propane and Ethane
(b) Propane and Butane
(c) Butane
5 The largest constituent of natural gas (a) LPG
is (b) Ethane
(c) Methane
6 FPSO is preferred for use in (a) Marshy lands
(b) Shallow waters
(c) Deep waters
7 Octane number of petrol used in cars (a) Above 100
in India is (b) Between 85 and 95
(c) Below 85
8 FPSO stands for (a) Floating Process
System Offshore
(b) Floating Production
and Storage Offshore
(c) Floating Production &
Storage Offloading
9 Arrange the following in decreasing (a) LPG
density i.e from heaviest downwards. (b) CNG
(c) NGL
10 Oil and gas are contained in (a) Reservoir Rock
(b) Cap Rock
11 5 Million Tons per year of crude (a) 20,000 Barrels per
means day
(b) 100,000 Barrels per
day
(c) 75,000 Barrels per
day
12 Which of the following is used as (a) Naphtha
feedstock to make Petrochemicals (b) Kerosene
(c) LPG
(d) Ethane
(e) All of above
13 Which of these items can not be (a) Insulating Material for
made from Petrochemicals furnaces
(b) Optical Lens
(c) Pressure Vessels
(d) Gas Turbine blades
14 Crude oil price during the current (a) 15 to 35 US$/Barrel
year has been in the range - (b) 22 to 35 US$/Barrel
(c) 15 to 25 US$/Barrel
(d) 15 to 22 US$/Barrel
15 Conversion of Gas to LNG is made (a) Making Petrochemical
for (b) Transportation of Gas
(c) To generate power
16 Which are the products from a (a) Motor Gasoline
Petroleum Refinery (b) Ethylene
(c) Naphtha
(d) Propylene
(e) Lube Oil
(f) Polypropylene
17 To transport gas from Qatar to (a) Transcontinental
Japan, use is made of pipeline
(b) Marine Tankers
(c) CNG
 UNIT 1 Basic Concepts

18 Naphthenes are (a) Hydrocarbons 27

(b) Straight Chain Notes
Hydrocarbons
(c) Non-hydrocarbons
(d) Hydrocarbons with
cyclic structure
19 MTOE means (a) Million Tons of Oil
Export
(b) Metric Tons of Oil
Equivalent
(c) Million Tons of Oil
Equivalent
20 The most predominant component of (a) Methane
natural gas is (b) Ethane
(c) Propane
(d) Butane
21 Which of the following gases is (a) Nitrogen
heavier than air (b) Ethane
(c) Butane
22 LPG contains mainly (a) Methane
(b) Butane
23 Which of the following is heavier (a) 1 cubic Meter of gas
at 2 bar and 30 deg C
(b) 0.2 cubic Meter of
same gas at 20 bar
and 30 deg. C
24 LPG is used as domestic fuel (a) It is liquid at
because atmospheric pressure
(b) It is gas at ow
l
pressure
(c) It is liquid at moderate
pressure
25 Which is the heaviest crude of the (a) 45 API
three (b) 35 API
(c) 37 API