A system is disclosed in which water-saturated desiccant in a dehydration unit, having previously been used to dehydrate natural gas, is regenerated in a closed loop process using liquid petroleum gas (LPG). LPG is pumped from a storage tank, vaporized and superheated. The superheated LPG gas enters the dehydration unit such that the hot gas passes over the desiccant thereby regenerating the desiccant. An overhead stream from the dehydration unit passes to a condenser where the temperature of the hot gas from the dehydration unit is dropped to form a fluid stream containing LPG, water and non-condensable gases. The fluid stream passes to a three phase separator for separating the fluid stream into a gas stream, a water stream, and a liquid stream containing LPG which is then returned to the storage tank for reuse in the closed loop process.