Liquified natural gas (LNG) is the gas that comes out of the ground naturally. When natural gas is separated from the natural soil, it is called “liquefied”. There are many different types of LPG and they come in many forms. In this article I will compare the cost per barrel of LPG and natural gas.
Natural gas has a high price per barrel. Most people think that because it is called natural gas it doesn’t cost anything. It is true, until you compare it to other fuels such as propane. It is slightly cheaper than oil and about equal in price to coal when you consider the efficiency.
The cost per barrel for this gas is very high, but not as much as one gallon of oil. If you look at the transportation costs you will be shocked by what you find. You have to pay at least three to four dollars per gallon just to haul it. This includes the cost for fuel, your truck, tax, etc. When you compare this to the cost of propane, it is clear to see that LPG is a much higher price per barrel.
Another thing to compare is the infrastructure required to extract natural gas. It is much easier and more efficient to use this method than any other. Also, due to its accessibility and economy of scale it is much cheaper to use than most other types of gas. So this makes sense that if you produce more natural gas than you need, then you can sell it to a company that produces LPG. This is where the major price differential comes from.
LPG is liquefied natural gas that is extracted from the ground. How this gas is extracted from the ground varies. Some companies dig the natural gas out of the ground using a high pressure method. This extraction method results in gas that is very flammable and poses a great risk to the environment. Many countries such as India and Australia have made it illegal to export LPG into their countries.
How then can LPG be liquefied? Well the answer is simple. Most companies extract it from the air. A compressor then converts the liquid to a gas. The compressed natural gas is then injected into wells to recover the natural gas. This process however is not without its own problems.
One of the biggest environmental concerns with this method is the method used to extract the natural gas from the ground. This method involves trucking trucks over terrain that is not flat and is near to areas where the natural gas is in high tension. This causes the natural gas to be squeezed out. To prevent this problem many companies now have injection systems in their rigs that use pressurized water to force the liquefied gas into the well.
This whole process for liquefying the natural gas and transporting it to oil rigs can sometimes cost more than the gas itself. One solution to this is to send the liquefied natural gas through a series of chemical processes. One such chemical process is known as transesterification. This process converts the natural gas to a product that can be easily marketed. The company selling the liquified natural gas will pay the company injecting the gas to pay for it. This is one way to reduce the price of LPG.
There are a few different ways that companies are reducing the cost of the gas. First the transportation costs are being reduced and this has had a great effect on the gas price. Also the cost to install the infrastructure to bring the natural gas to the places that need it is less expensive than putting in the infrastructure before. All of these combined make the gas much more affordable to the consumer.
In addition, the liquified natural gas can be sold overseas at a much higher price than most people realize. Because the United States has so many oil refineries in other countries the gas is sent to them for processing and then exported back to the US at a profit. Many companies are finding it more lucrative to sell the gas overseas rather than trying to process it in the United States. This has caused the gas price to stay relatively high.
As you can see the price of liquefied natural gas does fluctuate quite a bit. The best thing you can do if you are interested in investing in it is to talk with a professional in the industry. They can help you analyze the current prices of the natural gas and help you invest in the most efficient way possible. The liquefied natural gas is becoming an increasingly popular way to get natural gas from the United States to the places that it needs to go. Be sure to talk with a professional that understands the natural gas market to get the best analysis on the commodity.