What is compression?
USA Compression Partners (USAC) defined compression in its investor presentation as “a mechanical process where natural gas from a lower pressure is ‘smashed down’ (compressed) to a smaller volume, which results in a higher pressure.”
The description added that “in a nutshell, compression is used to boost the pressure of a volume of gas from a lower suction pressure to a resulting higher discharge pressure, shrinking the volume.”
Where is compression used?
Compression services are utilized all along the natural gas production cycle to the transport of gas to the end user. Archrock Partners (APLP) utilizes 80% of its compression fleet in natural gas production, gathering, and processing processes.
As the above graph shows, the remaining 20% of APLP’s fleet is utilized in gas lift processes in crude oil wells.
Now let’s next analyze factors that could drive demand for compression services in the US.