Abstract The objective of this paper is to provide an overview as to why Alberta should be looking at NOL (natural gas liquid) upgrading. There are a number of factors in the global NGL environment as well as in Alberta that point to the need to add value. In addition, several approaches to NGL upgrading which have not been commercialized in Alberta or Canada are described. The emphasis will be commercial, not technical, and an attempt is made to put the project in an Alberta context. It should be noted that the projects described are examples only, and that there are a number oj other processes and projects which could add value to Alberta's NOLs. Finally, it must be emphasized that the analysis particularly the economics, should be considered directional and preliminary. Introduction There are several trends under way in the industry which may result in excess, NGL supply and pressure on NGL pricing. Increased Worldwide NGL Availability Since the late 1970s/early 1980s, many countries, particularly the major OPEC producers, have built facilities to extract NGLs from gas produced in association with oil. Saudi Arabia's "Master Gas System", with capability of approximately 38 000 m3/d of LPG (liquid propane gas), double previous capacity, is a prime example of this development. The facilities were built when OPEC was producing nearly double the amount of oil produced today, and when continued growth was expected. With much lower oil production, significant OPEC NGL extraction capacity, estimated at about 95 000 m3/d of LPG excluding Iran and Iraq, is underutilized. This represents roughly 15% of current consumption. As OPEC oil production increases over time, this capacity will be used to produce additional LPG, whatever the conditions of the market at the time. One result may be continuing pressure on prices, particularly prices relative to other energy products. The impact of excess LPG production may already be materializing as evidenced by the LPG/crude oil price trend. LPG and crude oil are roughly at price parity on a BTU basis, significantly lower than the approximate 1.2 ratio during the latter half of the 1970s and the 1.1 to 1.5 ratio over the last ten years. While price volatility makes it difficult to be precise about this trend, it does appear that a long-term drop in the ratio is under way. Reduced Gasoline Volatility in U.S.A. Because ozone levels in the U.S. exceed legal limits in areas containing over 40% of the country's population, the Environmental Protection Agency (EPA) has proposed to significantly reduce gasoline volatility. The mechanism would be to reduce the gasoline Reid Vapour Pressure (RVP) during the mid-May to mid September period in two steps: a 1 RVP drop in 1989 followed by an additional 1.5 reduction in 1992. This is a significant change in relation to the current RVP average of approximately 11. The easiest approach to reducing RVP is to back out direct blended n-butane from the gasoline pool. While n-butane has a high octane and is relatively inexpensive, it has a very high RVP, approximately 52.