Where does LP Gas come from?
LP Gas is a derivative of two large energy industries: natural gas processing and crude oil refining.
When natural gas is drawn from the earth, it is a mixture of several gases and liquids. Methane, which is sold by gas utilities as “natural gas” constitutes about 90 percent of this mixture. Of the remaining 10 percent, 5 percent is propane and 5 percent is other gases such as butane and ethane.
Before natural gas can be transported or used, the LP Gases (which are slightly heavier than methane, the major component of natural gas) are separated out. Depending on the “wetness” of a producing gas field, gas liquids generally contain 1%-3% of the unprocessed gas stream.
Some LP Gases are also trapped in crude oil. In order to stabilise the crude oil for pipeline or tanker distribution, these “associated” or “natural gases” are further processed into LP Gas. Worldwide, gas processing is a source of approximately 60% of LP Gas produced.
In crude oil refining the LP Gases are the first products produced on the way to making the heavier fuels such as diesel, jet fuel, fuel oil, and gasoline.
Roughly 3% of a typical barrel of crude oil is refined into LP Gas although as much as 40% of a barrel could be converted into LP Gas. Worldwide, crude oil refining is the source for the other roughly 40% of LP Gas supplies although the ratio between gas processing and refining varies among regions.
LP Gas production from these sources is a natural derivative. That means production of LP Gas is assured since the primary motive for gas processors and refiners is to produce fuels other than LP Gas but first the LP Gases are produced. Although tied to the production of natural gas and crude oil, LP Gas has its own distinct marketing advantages and can perform nearly every fuel function of the primary fuels from which it is derived.