This paper provides an exergy analysis of the multistage refrigeration cycle used for Ethane and heavier hydrocarbons (C-2(+)) recovery plant. The behavior of an industrial refrigeration cycle with propane refrigerant has been investigated by the exergy method. The equations of exergy destruction and exergetic efficiency for the main cycle components such as evaporators, condensers, compressors, and expansion valves are developed. The relations for the total exergy destruction in the cycle and the cycle exergetic efficiency are obtained. An ethane recovery unit with its refrigeration cycle has been simulated to prepare the exergy analysis. Using a typical actual work input value; the exergetic efficiency of the refrigeration cycle is determined to be 43.45% indicating a great potential for improvements. The simulation results reveal that the exergetic efficiencies of the heat exchanger and expansion sections get the lowest rank among the other compartments of refrigeration cycle. Refrigeration calculations have been carried out through the analysis of temperature-entropy (T-S) and pressure-enthalpy (P-H) diagrams where coefficient of performance (COP) was obtained as 1.87. The novelty of this article includes the effect and sensitivity analysis of pressure drop and temperature on the exergy efficiency and coefficient of performance of the cycle. (C) 2010 The Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.