Petroleum Gas (Natural Gas, LNG, and LPG): Industry-Structure Report (Current Edition)

Updated: 2026-09-05 Scope: Natural gas produced and transported as a gas; LNG (liquefied natural gas); and LPG (liquefied petroleum gas, propane and butane).

Evidence coverage in this edition

This report combines the existing physical-network hypotheses with primary-source research conducted for this edition. Evidence depth varies by stage: some processes have support for specific company relationships, while others are supported only by industry-wide statistics or regulatory descriptions. Verified (confirmed by primary sources) and lead (not adopted as evidence here, or an individual connection or transaction remains unverified) are treated separately and are not mixed in the conclusions.

Physical-network corrections

Primary-source research supported the existing physical-network links from natural gas to inorganic chemicals such as ammonia and from natural gas to power generation. No changes were made to those edges.

Two additional uses were checked: city-gas distribution through low-pressure networks to homes and businesses, and use of LPG as petrochemical feedstock to make olefins such as ethylene and propylene from propane and butane. However, the specific downstream classification or process node to receive either edge is not yet defined. To avoid adding unsupported supplementary edges, neither link was added to the graph. They remain candidates for review once downstream-node definitions are established.

Conclusion

One petroleum-gas product classification contains two products with different properties and logistics. Natural gas is transported as a gas by pipeline; liquefied and carried by ship, it becomes LNG. LPG (propane and butane) is a separate liquefied gas separated from gas fields or refineries. Unlike LNG, it is handled as a pressurized liquid rather than a cryogenic liquid, and its uses extend from heating and transport fuel to petrochemical feedstock. They are often grouped under the word “gas,” but their equipment, transport, and customers differ, so they need to be treated as distinct supply chains.

The central structural fact is that natural gas branches into three different infrastructures: pipeline transport as a gas, LNG terminals that liquefy gas for export, and distribution networks that deliver city gas to individual premises. Large U.S. LNG exporters disclose more than 40 million tonnes per annum (mtpa) of combined capacity at operating liquefaction facilities, showing that export liquefaction and shipping infrastructure exists at a scale separate from domestic consumption. By contrast, residential and commercial supply does not go through liquefaction: local distribution companies (LDCs) deliver more than 90% of end-use gas through an entirely different logistics route.

Overall flow

Gas field (associated / non-associated gas; reserves disclosed by company)
  └─ Production and processing
       ├─ Pipeline (gas remains gaseous)
       │    ├─ High-volume, high-pressure transport for industry and power → Gas-fired power plant
       │    └─ LDC low-pressure network → Residential/commercial city gas
       ├─ Liquefaction (LNG) → Storage → LNG carrier (internationally regulated vessel)
       │    → Importing-country regasification terminal → Domestic demand
       └─ Gas processing separates LPG (propane and butane), etc.
            ├─ Heating · hot water · cooking · transport fuel
            └─ Petrochemical cracker feedstock (for ethylene, propylene, and other olefins)

Some natural gas → Inorganic chemicals such as ammonia (steam reforming as a hydrogen source)

Operational by-products: methane leakage · flaring (associated gas released without recovery)

Industry structure by stage

1. Upstream: gas fields and production

Natural gas comes both from gas associated with oil fields and from non-associated fields developed specifically for gas. Companies disclose reserves, while national production and consumption are also aggregated. These views complement each other: company reserves indicate future supply potential, while national production and consumption statistics indicate the current balance.

For example, Woodside Energy reported 7,637.1 billion cubic feet (Bcf) of proved equity natural-gas reserves at year-end 2025, of which 5,494.7 Bcf was undeveloped. These are reserves, not daily capacity or actual operating output. Woodside Energy Annual Report 2025

At the national level, U.S. natural-gas production was 37,803,268 million cubic feet (MMcf) and consumption was 32,619,417 MMcf in 2023. Production exceeding consumption indicates volume available for exports or uses outside the reported domestic consumption total, but these national aggregates do not show the capacity of an individual company or field. EIA: Natural gas statistics

2. Midstream: liquefaction, storage, pipelines, and LPG separation

At this stage, upstream natural gas branches into several routes. One remains gaseous and moves through pipelines; another is cooled to a very low temperature, liquefied into LNG, and exported by ship. In addition, gas processing separates LPG such as propane and butane, which becomes a product with logistics and uses distinct from natural gas.

Cheniere Energy’s Sabine Pass terminal in Louisiana illustrates LNG scale. Its six operating trains have approximately 30 mtpa of LNG production capacity. The site has five LNG storage tanks, regasification equipment, and three marine berths. The terminal connects to the 94-mile Creole Trail Pipeline and to multiple interstate and intrastate pipeline networks.

Cheniere’s Corpus Christi terminal in Texas has three operating trains with about 15 mtpa of LNG capacity. Stage 3 is under construction and is planned to add more than 10 mtpa when complete. That figure is planned capacity under construction, not current operating capacity. Cheniere Energy annual disclosures

Across the United States, annual reporting to the regulator identifies 186 operating LNG facilities. This is an administrative count of facilities and reported storage capacity, not LNG export-liquefaction capacity. PHMSA: LNG facilities and total storage capacities

For LPG separation, the existence of uses is confirmed: propane and butane are used for heating, hot water, cooking, and transport fuel, as well as feedstocks for petrochemical crackers producing olefins such as ethylene and propylene. However, this review did not obtain primary sources at the level of individual facilities and contracts showing which processing sites separate what volume and supply which buyers. The use itself is verified; its scale and specific supply relationships are not. EIA: Uses of hydrocarbon gas liquids

3. Main demand: power generation and city gas

The two major demand channels for natural gas transported in gaseous form are power generation and city-gas distribution. Although both use the same gas, their supply chains differ. Power plants receive large volumes directly through high-pressure pipelines; LDCs deliver gas to homes and shops through low-pressure distribution networks.

For power generation, natural gas was the largest U.S. fuel source in 2023, accounting for 43% of electricity generation. Among gas-fired plants, efficient combined-cycle facilities had an average capacity factor of about 56% in 2022; the newest fleet that entered service in 2014–2023 reached about 66%. Their heat rate was below 7,000 Btu per kWh generated. EIA: Natural gas-fired electricity generation

For city-gas distribution, LDCs delivered 94% of natural gas for residential and commercial end use in 2023, equivalent to 20.3 Bcf per day. EIA distinguishes the LDCs’ low-pressure networks directly connected to homes and businesses from pipeline companies’ large-volume, high-pressure transport mainly for industry and power plants. EIA: Pipeline and LDC deliveries

4. Chemical feedstocks: ammonia and petrochemicals

Natural gas and LPG are used as chemical feedstocks as well as fuels. Natural gas is a major input to ammonia production. More than 70% of global ammonia production is estimated to use natural-gas-based steam reforming, consuming about 170 billion cubic meters (bcm) per year—roughly one-fifth of industrial natural-gas demand. About 40% of the input energy serves as feedstock hydrogen in the ammonia product. This use is supported by industry estimates, but no individual contract from a specific natural-gas supplier to a specific ammonia plant was confirmed. IEA: Ammonia Technology Roadmap

Propane, an LPG, is used as a petrochemical-cracker feedstock to produce olefins such as ethylene and propylene. Butane is used as a petrochemical or refinery feedstock and in gasoline blending. Ammonia feedstock use of natural gas and petrochemical feedstock use of LPG are different substances and processes, even though both appear within the same “petroleum gas” classification. They should not be conflated. EIA: Uses of hydrocarbon gas liquids

5. Standards and regulation: onshore facilities and maritime transport

Petroleum-gas supply chains, including LNG and LPG, are regulated both on land and at sea. In the United States, FERC regulates pipelines, storage, and LNG facilities, as well as interstate natural-gas transport, rates, and facility abandonment. It issues authorizations to entities planning interstate pipeline and storage construction or operations. FERC: Natural gas regulation

For LNG import and export facilities, different agencies are involved in reviewing and approving the siting, construction, and operation of onshore and coastal facilities and authorizing exports by vessel. Other agencies address federal minimum pipeline safety, waterway suitability, and facility security plans. Additional requirements depend on the circumstances of each project. FERC: Permitting agencies for FERC-jurisdictional LNG projects

At sea, the International Maritime Organization’s IGC Code applies to gas carriers constructed on or after July 1, 1986. It sets international standards for the design, construction, and equipment of ships carrying LNG, LPG, and other liquefied gases in bulk. This confirms the existence of an international safety code; it does not establish the capacity of a specific vessel or a charter contract between shipowner and cargo owner. IMO: IGC Code

6. End-of-life: methane leakage and flaring

Primary sources reviewed did not establish a distinct end-of-life stage for petroleum gas comparable to product disposal or recycling. The main environmental issues identified are instead methane leakage and flaring (burning associated gas) during operations.

The IEA estimates methane emissions from natural-gas operations at 36 million tonnes (Mt) in 2025. It estimates that methane reduction across oil and gas operations could make nearly 100 bcm of gas available each year, with elimination of non-emergency flaring making an additional 100 bcm available. These are global estimates, not emissions or recovery capacity at individual facilities. IEA: Global Methane Tracker 2026

In U.S. guidance current as of May 2026, the regulator clarified that routine flaring of associated gas from new oil wells could continue in limited circumstances even after the May 7, 2026 phase-out deadline. This is a U.S. rule, not a global ban. EPA: Air rules for oil and natural-gas operations

Specific facts on disposal or recycling of containers and equipment were not obtained in this primary-source collection and remain a gap.

7. How to evaluate companies

Companies should be evaluated by their role, not as a list of well-known names.

Primary materials confirmed in this review include Woodside Energy and Cheniere Energy with company names and quantitative evidence. Primary sources from gas-processing/LPG-separation companies, LNG-carrier operators, and individual city-gas distributors were not obtained and remain for future collection.

8. Bottlenecks and business opportunities

9. Data caveats

Sources