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Mastering the Commodities Markets by Francesca Taylor

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What Is Natural Gas?

Natural gas is colourless, shapeless and odourless in its pure form. It is combustible and when burned gives off a great deal of energy. Natural gas burns cleanly and produces 30 per cent less carbon dioxide than oil and 40 per cent less than coal.

Natural gas is a combustible mixture of hydrocarbon gases; it is formed primarily of methane but it can also include ethane, propane, butane and pentane. The composition of natural gas may vary widely, but Table 4.1 shows the typical components of ‘raw’ natural gas before any refining takes place.

Table 4.1 Typical composition of natural gas

tab4.1

Source: HSBC and Thomson Reuters

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