Problem statement: Companies want to frack oil wells and then export natural gas overseas using transport via high pressure pipeline followed by liquefaction at a terminal port.

If the methane component in natural gas ($\ce{CH4}$) can be converted to propane $\ce{C3H8}$, that would leave $\ce{H2}$ which can be combined with nitrogen to create ammonia-based fertilizer.

If the process is done at the well, propane could also be reverse-fed to wells in liquid form to use in place of water for fracking, after which the propane could be drawn off by lowering the pressure (such that it is then in the gas phase) and recompressed to liquid at $160 \ \mathrm{psi}$. This reduce water contamination and propane would not be lost.

In the liquid phase at $160 \ \mathrm{psi}$, propane has a volume $\frac{1}{250}$ as it does in the gas phase, and consequently propane would require a pipeline much smaller than natural gas for same volume sent.

On the receiving end, propane has a higher value for its ease of transport and storage as well as larger consumer base.

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    $\begingroup$ One might suspect that the oil and gas companies have calculated out the economics pretty well, including all the handling and converting of LNG to LPG. (And the required costs of capital investments - a point often missed). $\endgroup$ – Jon Custer Sep 21 '16 at 16:47
  • $\begingroup$ I'm voting to close this question as off-topic because there's no question there, just a bunch of statements. $\endgroup$ – Todd Minehardt Apr 13 '19 at 21:02

Gas to liquid technology is known, but propane isn't a good choice of end product

The idea of converting natural gas (which is mostly methane) into liquids is widely used not least because the earth has, inconveniently, located the best natural gas fields some way from the places that most want to use natural gas.

Right now (in 2016), though, it seems it is still not desperately uneconomical to convert the methane into a liquid by refrigeration and ship it to customers in the largest known thermos flasks (LNG tankers). Both the ships for transporting liquefied natural gas (LNG) and the plants to create it are very expensive (tens of billions of dollars for the minimal economic scale). There are something like 410 of these ships and there seem to be dozens of new units being built every year (see this report on the industry for more detail: warning pdf).

But there are some examples of plants that convert the local gas supply directly to more transposable liquids. Shell, for example, have developed a process that converts gas directly into clean liquid fuels (the initial plants produce very clean diesel, but other fuels are possible). See this description of the Shell process. Some other firms are operating similar processes.

So it seems that, right now, LNG is the best economical option. But if you are going to use a technology to go directly to something more transportable than methane, it is better to go the whole hog to a widely used fuel (diesel and petrol are both basically longer chain hydrocarbons than propane).

This may, of course, change.

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