Elgas LPG Gas Blog

Where Does LPG Come From & How is Propane Made?

LPG comes from drilling oil and gas wells.

It is a fossil fuel that does not occur in isolation.

LPG is found naturally in combination with other hydrocarbons, typically crude oil and natural gas.

LPG is produced during natural gas processing and oil refining.

It is isolated, liquefied through pressurisation and stored in pressure vessels.

How is LPG Made - LPG Production Process?

Where does LPG come from - production processLPG is made during natural gas processing and oil refining.

LPG is separated from unprocessed natural gas using refrigeration.

LPG is extracted from heated crude oil using a distillation tower.

This LPG can be used as is or separated into its three primary parts: propane, butane and isobutane.

LPG - Liquefied Petroleum Gas - is stored pressurised as a liquid in cylinders or tanks.

What is LPG Made of?

LPG gas bottels

LPG consists of a group of flammable hydrocarbon gases that are liquefied through pressurisation and commonly used as fuel.

There are a number of gases under the “LPG” label, including propane, butane, isobutane and mixtures of these gases.

LPG is stored in steel vessels ranging from small BBQ gas bottles to larger gas cylinders and tanks.

The LPG Name Game

What you get when you buy “LPG” can depend on the country you buy it in and/or the application.

In Australia, LPG is propane.  The exception is autogas, which can be a propane/butane blend.

In New Zealand, "LPG" is generally a propane/butane blend.

In the USA they call it "Propane", which is what they sell, and generally don't even use the term "LPG".

LPG may also be referred to as a Natural Gas Liquids - NGLs - along with propane, butane, isobutane, ethane, pentane and pentanes plus (natural gasoline).

It needs a little help to “find itself”…

Summary of the Origins of LPG (Propane)

Natural gas processing plantLPG is not made or manufactured, it is found naturally in combination with other hydrocarbons.

LPG is produced during natural gas processing and petroleum refining. 

Propane (LPG) is a naturally occurring gas but propane does not occur purely by itself.

LPG processing involves the separation and collection of the gas from its petroleum base.

About 60% is produced from the natural gas stream that comes out of the wellhead.

The other 40% is produced during the crude oil refining process.

LPG is isolated from the hydrocarbon mixtures by its separation from natural gas or by the refining of crude oil.

Natural gas liquids (NGL) range from 1% to 10% of the natural gas flow.

Similarly, LPG produced from crude oil refining constitutes between 1% and 4% of the crude oil processed.

Both processes begin by drilling oil wells.

Following its refinement, LPG is stored and distributed as a liquid under pressure until used, at which point it is utilised as either a liquid or a gas (vapour).

But there was a time when it went unappreciated...

Early Days of Wasted LPG

Flaring gas at a wellIn the early days of the petroleum business, there wasn’t an established infrastructure or market for LPG. 

The same was true of natural gas (methane).

As a result, the LPG and methane were wasted through flaring — the burning off of the unwanted gas. 

This early practice from long, long ago led some people to refer to LPG as a by-product.

LPG is not a by-product.  It is a valuable co-product of natural gas and oil production.

Sadly, flaring still goes on in some countries.

Now for the "how"...

LPG Stripped from Natural Gas

Separating the Gas from the Oil

The gas/oil mixture is piped out of the well and into a gas trap, which separates the stream into crude oil and "wet" gas, which contains LPG and natural gas.

The heavier crude oil sinks to the bottom of the trap and is then pumped into an oil storage tank for refining.

The "wet" gas, off the top of the gas trap, is processed to separate the gasoline (petrol) from the natural gas and LPG.

Processing the Methane

Impurities such as water, carbon dioxide, nitrogen and hydrogen sulfide must be removed before either the natural gas (methane) or LPG can be used.  Some of these can be sold as by-products.

The refined and purified natural gas, which is mostly methane, is fed into the pipelines that supply our cities and towns. 

Distribution of refined natural gas (methane) is typically handled by gas utility companies.

Processing the LPG

The LPG must be separated from an intricate mixture of hydrocarbons, which includes the methane, ethane, ethene, propene, isobutene, butadiene, pentane, and pentene. 

The plants that do the processing are frequently called “stripper plants”, as the LPG is stripped from the natural gas flow.

Impurities must also be removed from the propane and butane or they will prevent the LPG from liquefying properly.

The refrigeration technique is common for recovery of LPG from a natural gas stream.

With this technique, they refrigerate the gas stream to obtain the LPG.

Refrigeration is employed in three different processes: expander plants, low temperature separation and combined processes.

Other separation techniques may also be employed, including lean oil absorption.

This LPG can be used as a mixture or further separated into propane, butane and isobutane, as needed.

The LPG enters its own distribution network, where it eventually finds its way to end users, including 45kg home LPG and commercial LPG users all around Australia and the world.

LPG Processed from Oil Refining

Refining the Crude Oil

LPG processes from oil refining - DiagramCrude oil undergoes a variety of refining processes including fluid catalytic cracking, delayed cokers, and crude distillation.

One of the refined products is LPG.

After desalting, the heated crude oil is pumped into the distillation tower. 

Fractions of the flow are extracted from the side of the distillation tower at various heights between the bottom and the top. 

Each extraction point is temperature controlled to extract a specific fraction including gasoline, naphtha, kerosene, diesel, light gas oil and heavy gas oil. 

These are then sent to unique streams for storage or possible further processing. 

Refining the LPG

LPG, with the lowest boiling point, is extracted from the top of the distillation tower.

This LPG component can be used as a mixture or further separated into its three primary parts: propane, butane and isobutane. 

This further fractionation can be achieved with Depropaniser, Debutaniser and Deisobutaniser fractionators.

LPG Ready to Use


Propane molcule diagramIn Australia, LPG is propane.  

Propane is the gas that is supplied to virtually all homes and most businesses that purchase LPG in Australia.  

LPG is supplied in gas bottles that are either exchanged or refilled on site by LPG tankers. 

Large users may utilise bigger LPG storage tanks.  The chemical formula for propane is C3H8

LPG goes by a number of names in Australia including LPG, LPG gas, bottled gas, propane, BBQ gas, camping gas and LP gas. 

However, no worries, as it’s all the same gas. 


Butane molecule diagramButane is also considered to be LPG.  Butane is supplied to businesses that require butane, as opposed to propane. 

Butane has some specific applications where it has advantages over Propane.  

Aerosols and greenhouses both typically use butane.

The chemical formula for butane is C4H10.

Final Thoughts

For something that exists naturally, LPG takes a lot of work to get it to the point when it can be used.

However, its clean burning, portability and versatility truly make it worth the effort.




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The information in this article is derived from various sources and is believed to be correct at the time of publication. However, the information may not be error free and may not be applicable in all circumstances.