Natural gas is a form of fossil fuel, such as oil and coal, but it primarily consists of methane gas and other combustible hydrocarbons. Like fossil fuels, it takes millions of years for natural gas to form.

Typically found in rock formations, natural gas is a by-product of the decomposition of animal and plant remains, as well as silt and sand. The resultant gas moves into and accumulates in large crevices and cracks deep beneath rock formations and earth layers. They become trapped underneath the Earth’s surfaces. Although some pockets of natural gas are easy to locate and extract, the majority of natural gas deposits lay deep down the earth’s surface and are difficult to find.

Natural Gas Industry

Natural gas is a globally important source of energy. Over two decades, the global production of natural gas steadily rose to around 4 trillion cubic meters in 2019 from just 2.27 trillion cubic meters in 1998. Global consumption has kept pace with its production which is estimated to be nearly 3.9 trillion cubic meters. The global natural gas market is valued at around $13.7 billion and is forecasted to grow to $17.9 billion by 2027.

As the energy demand continues to soar, the natural gas industry is seen as a sweet spot for investors. Furthermore, the industry is seeing radical changes as it veers away from historic utility services supply monopolies to government-sponsored regulated market structures. This transformation creates a competitive environment for electricity and gas supply players.

Natural Gas: Major Business Processes

Unlike the oil or coal business, the natural gas business is different in various important ways. Quite obviously, the physical and chemical properties of gas, oil, and coal mean that the extraction, production, handling, transportation, and storage are different. Specialists at the natural gas software company, Trellis Energy, noted that the natural gas business has a more meticulous supply chain, tedious processes, and costlier infrastructure.

Here we take a look at how the natural gas business works.

Finding natural gas

Firstly, geologists locate potential areas or geologic formations that likely stores natural gas deposits.  They study seismic surveys on both lands and underneath oceans to identify places for drilling natural gas and oil wells. Using seismic surveys, geologists evaluate the potential contents of rock formations. This process uses a thumper truck for seismic surveys on land and sonic waves for undersea surveys.

Once an area is deemed to have a potential for harnessing natural gas, an exploratory well is drilled and tested. The test result gives information on the quantity and quality of natural gas available on the site.

Drilling

If the exploratory well shows that the geologic formation consists of a considerable volume of natural gas enough to make a profit, production wells are drilled. Depending on the gas deposit, wells can be drilled horizontally and vertically. In general, the fuel gas flows easily through the wells, the pipeline, and to the surface.

There is also the process of fracking or hydraulic fracturing, wherein natural gas is produced by forcing chemicals, water, and sand into shale or sedimentary rock formations to release natural gas. This unconventional production method breaks up the formation and releases trapped natural gas, thereby allowing it to move up to the surface. At the surface of the well is a system of pipelines that gathers the natural gas and is sent into processing plants.

Processing and sale

Natural gas gathered from the wells is called wet natural gas because it contains water vapor and natural gas liquids, such as butanes, ethane, pentanes, and propane. It may also contain unwanted non-hydrocarbon chemicals like carbon dioxide, helium, sulfur, and nitrogen. These chemical compounds are not fit for energy production and should be removed before natural gas is sold to the market.

Wellhead natural gas goes through an intricate system of pipelines and is sent to processing plants. Here, non-hydrocarbon compounds and water vapor are removed. Likewise, natural gas liquids are extracted and sold individually. In some cases, wellhead natural gas is already pure and dry and does not require any processing.

Natural gas that has been fully processed is called pipeline quality, consumer-grade, or dry natural gas. Odorants are infused into the natural gas to make it easier to identify and detect natural gas types. Consumer-ready natural gas travels through pipelines to storage facilities or to distribution companies who then retail it to consumers.

The natural gas business follows a complicated process – from finding the source to extraction down to processing and distribution. At every stage of the process, careful coordination, management, and monitoring are vital. There are also tons of people, providers, and stakeholders involved in running this business. Fortunately, IT solutions geared towards this industry can help streamline and boost the efficiency of many of these aspects, thereby ensuring a lucrative natural gas business.