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Gas Value Chain

We all enjoy the benefits of natural gas in one way or the other, directly or indirectly, without questioning how the BTU of natural gas is made available to us. However, a lot of integrated processes requiring huge investments along the whole value chain are involved before it reaches us. First, the E&P companies need to explore, drill and extract natural gas from the ground. Then the transmission companies link the gas fields to major consuming areas either via pipelines or LNG. Finally, the Local Distribution Companies (LDCs) deliver the natural gas to our respective homes.

Gas Value Chain

The natural gas market is very dynamic and it requires liquidity, flexibility and transparency for it to function effectively. It therefore needs multiple supply sources, multiple users and comprehensive infrastructure for transmission & distribution. The natural gas market is highly developed in U.S., Europe and Asia.

What are the major uses of natural gas?

  1. Power generation for industrial and residential usage;
  2. Fuel for furnaces and boilers in a variety of manufacturing industries;
  3. Feedstock for Petrochemicals plants, methanol;
  4. Fuel used in Natural Gas Vehicles (NGVs)/ CNG

Why is natural gas the fastest growing and preferred energy source?

It is abundant

The natural gas resources base can last for about 234 years at the current consumption rates supported by the technological innovation that allowed additional extraction of natural gas in unconventional rock formations like shale, tight sands and coal beds.

It is clean

It is the cleanest burning conventional fuel, producing 45% less CO2 emissions than coal and 30% less CO2 emissions than oil when combusted. The use of natural gas therefore mitigates some adverse climatic changes often attributed to burning of fossil fuels.

On a kilowatt hour basis, natural gas produces up to 65% less emissions than coal and 25% less emissions than oil when used to generate electricity.

It is versatile

Natural gas can be used in variety of ways from electricity generation, running of the manufacturing plants, feedstock for a range of products, heating & cooling as well as fuels for transportation.

Even where renewable energy sources are used for power generation, natural gas is always there to complement the unreliable nature of renewable energy sources when for example the sun does not shine or the wind does not blow enough to make meaningful power generation.

It is affordable

On an energy-equivalent basis and the recent gas prices, abundant supplies of natural gas are available at lower prices when compared to energy content of other fossil fuels.

It is efficient

Of all the conventional energy sources, natural gas is the most efficient (reaching up to 60% efficiency) when combusted in the internal combustion engine of gas fired power plants. This allows the utility companies to generate more electricity with less fuel consumption.

What is Natural Gas?

Natural gas is a colorless, shapeless, and odorless combustible, gaseous mixture composed of simple hydrocarbon compounds, usually found in deep underground reservoirs.

The “rotten egg” smell associated with natural gas is due to the addition of an odorant called mercaptan to facilitate the detection of natural gas during leakages for example.

Like oil and coal, natural gas is a fossil fuel widely believed to have been formed when the remains of plants & animals that lived billions of years ago are compressed under the earth, at very high pressure for a very long time through a process called thermogenic methane.

Is Natural Gas a new source of energy?

Natural gas has been used in homes since the first century A.D. in Persia following its seepage from the ground and its ignition by lightning, thus producing continuous flame that burned day and night. Thus natural gas has been the fuel of the past, present and of course the future.

Major constituents of Natural Gas

Natural gas is composed almost entirely of methane, but does contain small amounts of other hydrocarbon gases such as ethane, propane, butane, pentane and non-hydrocarbon impurities.

Difference between Conventional & Unconventional Gas?

Both conventional and unconventional gases are the same in terms of their chemical composition which is majorly methane. The notion 'unconventional gas' is used to signify the fact that these types of gas resources are found within the source rock where they are generated and cannot move due to ultralow permeability while for conventional gas they migrated, over a geological timeframe,  through a suitable path and accumulate in a reservoir rock capped by a seal. Because of their unusual geological locations, they require special technologies and techniques before they can be extracted.

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