Production & Distribution


LPG has two origins: approximately 60% is recovered during the extraction of natural gas and oil from the earth, and the remaining 40% is produced during the refining of crude oil. LPG is thus a naturally occurring by-product. In the past, LPG was destroyed through venting or flaring (i.e. the burning off of unwanted gas), wasting the full potential of this exceptional energy source.

Natural gas processing

When gas is drawn from the earth, it is a mixture of several gases and liquids. Commercial natural gas is mainly composed of methane. However, it also contains ethane, propane and butane in accordance with the specifications for natural gas in each country in which it is distributed. Therefore, before natural gas is marketed, some NGLs, including LPG (propane & butane) are separated out, depending on the ”wetness” of the gas produced: NGLs represent 1 to 10% of the unprocessed gas stream. Worldwide, gas processing is the source of approximately 60% of LPG produced.

Crude oil refining

In an oil refinery, LPGs are produced at various stages: atmospheric distillation, reforming, cracking and others. The LPG produced will be between 1 and 4% of crude oil processed. This yield will depend on the type of crude oil, the degree of sophistication of the oil refinery and the market values of propane and butane compared to other oils products. Worldwide, refining is the source of approximately 40% of LPG produced.

Although tied to the production of natural gas and crude oil, LPG has its own distinct advantages and can perform nearly every fuel function of the primary fuels from which it is derived. The fact that it can be easily liquefied makes LPG a a highly versatile energy alternative and thanks to a wide variety of packaging and storage options, LPG has numerous fuelling applications.


Step1 – Production

The production of “field grade LPG” is the result of the treatment of NGLs. This treatment is necessary to produce: a) Oils that are suitable for transport to refineries and b) Natural gases that correspond with commercial specifications.

Step 2 – Transportation

While crude oil is transported from the production sites to refineries by tankers or pipelines, LPG is transported to storage terminals by large LPG carriers, pipelines or train.

Step 3 - Refining and Storage

Butane and propane can also result from the oil refining processes. LPG storage terminals store products that are imported in large quantities.

Step 4 – Transportation

The LPG is then delivered by train, road, coastal tanker or pipeline to cylinder filling plants and intermediate-size storage areas.

Step 5 - Bottling and Storage

Cylinders are filled with butane and propane at bottling plants. LPG is generally stored in pressurised tanks (vessels or spheres) in intermediary storage centres.

Step 6 – Distribution

LPG can be transported virtually anywhere, either in cylinders or bulk. Trucks transport butane and propane cylinders from the bottling plant to retailers, as well as to private and professional customers. Meanwhile, small bulk trucks distribute LPG from the storage centres to various consumers.

Step 7 End Users

LPG is easily available to end users through cylinder sales points such as commercial stores or service stations close to their locations. Customers requiring larger volumes can purchase LPG in bulk.