What is Natural Gas?
Natural gas is a hydrocarbon gas, and mainly consists of methane and other gas types.
Natural gas is an abundant and a naturally occurring fossil fuel found deep underground in rock formations or associated with other reservoirs.
Natural gas exists in many different formations, some harder to access than others. Shale gas, which is gas that's stored in shale rock formations. Coalbed methane is gas found in coal deposits.
Wells are drilled into the ground to remove the gas. From there, the natural gas is transported through pipelines to a plant where it is processed (liquids and gases are separated) and is then transported to consumers for use in products like fertilizer and heating fuel.
Natural gas is used as heating fuel, cooking and in electricity generation. Before it can be used natural gas must be processed to remove impurities.
What are Natural Gas Liquids?
Natural gas liquids (NGLs), comprising ethane, propane, butane and pentane plus, are primarily obtained during the production and processing of natural gas. Canadian natural gas liquids (NGLs) are priced at Edmonton or Sarnia posted prices, the common pricing reference point for Canadian NGLs. US NGLs are priced at Mont Belvieu, Texas, and Conway, Kansas the typical price reference points for North American NGL markets. The level of natural gas production, the amount of liquids in the gas and imports and exports are the key factors influencing supplies of NGLs. NGL prices are mainly affected by crude oil and natural gas prices and petrochemical demand.
The Cochin, Enbridge and Alliance pipelines transport NGLs from Alberta to Sarnia, Ontario and to the United States. Cochin transports individual products such as propane and butane. Although Enbridge is mainly a crude oil pipeline, it also transports an NGL mix and propane in batches. In the high-pressure Alliance natural gas pipeline, NGLs are transported within the natural gas and are extracted at Aux Sable's Channahon Extraction Facility at the end of the pipeline near Chicago, Illinois.
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