05/09/2026
🔷 1. Production (Extraction)
Propane is not produced on its own — it's a byproduct of:
Natural gas processing
Crude oil refining
a. Natural Gas Processing
Natural gas from wells contains methane (main component) and natural gas liquids (NGLs) like ethane, propane, butane.
These are separated at gas processing plants.
Propane is extracted from the NGL stream.
b. Oil Refining
Crude oil is processed in a refinery, producing gasoline, diesel, kerosene, and LPGs (including propane).
Propane is a byproduct during cracking and distillation.
🔷 2. Storage at Supply Terminals
After production, propane is stored in large salt caverns or pressurized tanks at major storage hubs and terminals.
Key U.S. storage hub: Mont Belvieu, Texas (a major propane pricing and distribution point).
🔷 3. Transportation
Propane is moved from processing facilities to regional distribution points by:
Pipeline (most cost-effective over long distances)
Railcars (common in areas without pipelines)
Barges or ships (for international transport)
Transport trucks (for regional and final delivery)
🔷 4. Regional Distribution (Bulk Plants)
Propane is offloaded to bulk distribution plants or local terminals.
These facilities store propane in large tanks and load it into smaller delivery trucks (bobtails).
🔷 5. Local Delivery to End Users
Delivered by bobtail trucks (specialized propane tankers) to:
Homes (heating, cooking, water heaters)
Farms (crop drying, heating)
Businesses (forklifts, heating, cooking)
Industrial users
Propane can also be dispensed into cylinders (like BBQ tanks or forklift bottles) at retail refill stations.
🔷 6. End Use
Common uses include:
Residential: Heating, cooking, water heating
Commercial: Restaurants, laundromats, temporary heating
Agricultural: Crop drying, greenhouse heating
Industrial: Forklift fuel, space heating
Transportation: Autogas (alternative vehicle fuel)