Where Does Propane Come From

Important Note:

Effective January 23, 2017, the federal law relating to propane tanks was changed.  Propane tanks are now valid for 10 years from the date of manufacture.  After that point they may not be refilled unless they have been re-certified.  It is typically not economically reasonable to re-certify a tank.

The applicable tanks used to be good for 12 years.  This change includes tanks which may be stamped “Valid for 12 years from the date of manufacture” such that they now expire in 10 years rather than 12 years.

A unique feature of propane is that it is not produced for its own sake, but is a by-product of two other processes, natural gas processing and petroleum refining. The figure above shows a diagram of where propane comes from and how it gets to the consumer.

Natural gas plant production of propane primarily involves extracting materials such as propane and butane from natural gas to prevent these liquids from condensing and causing operational problems in natural gas pipelines. Similarly, when oil refineries make major products such as motor gasoline and heating oil, some propane is produced as a by-product of those processes. It is important to understand that the by-product nature of propane production means that the volume made available from natural gas processing and oil refining cannot be adjusted when prices and/or demand for propane fluctuate.

In addition to these two processes, demand is met by imports of propane and by using stored inventories. Although imports provide the smallest (about 10 percent) component of U.S. propane supply, they are vital when consumption exceeds available domestic supplies of propane. Propane is imported by land (via pipeline and rail car from Canada) and by sea (in tankers from such countries as Algeria, Saudi Arabia, Nigeria, and Norway).

Source: US Dept of Energy

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