The behaviour of an industrial refrigeration cycle with refrigerant propane has been investigated by the exergy method. An natural gas liquid 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 26.51 % indicating a great potential for improvements. The obtained simulation results reveal that the exergetic efficiencies of the air cooler(s) and chilling sections get the lowest rank among the other compartments of refrigeration cycle. Refrigeration calculations have been carried out through the analysis of T-S and P-H diagrams where coefficient of performance (COP) was obtained as 1.8. The novelty of this article include the suggestions for increasing efficiencies, along with the discussion about the reasons for deviation from ideal cycles and also the effect and sensitivity analysis of pressure drops on the coefficient of performance of the cycle. Copyright (c) 2006 John Wiley & Sons, Ltd.