What is LPG?

Whether you’re firing up the barbeque, flicking on a heater or turning on the hot water tap, most of us use liquid petroleum gas (LPG) every day. But where does this gas come from, what are its benefits and how can you use it in your home? We answer these questions and more in this Canstar Blue guide.

What is LPG?

LPG is a common form of gas used for household and commercial purposes. It is produced in two ways: extracted during the natural gas production process or produced during the oil refinement process.

LPG is used in many household appliances, including air conditioners, heaters, stoves and barbeques. It’s also commonly used for industrial purposes, such as fuelling machinery and vehicles.

LPG usually consists of two ingredients: propane gas and butane gas. However, in Australia it is purely propane gas. This is because butane gas isn’t as effective in colder weather and cannot vaporise efficiently when temperatures drop.

How is LPG sourced?

LPG is sourced through the refinement of fossil fuels, namely, in two ways: It is extracted during the natural gas production process or it is produced during the oil refinement process.

About 80% of Australia’s LPG is extracted from natural gas, with the remaining 20% derived from refining crude oil.

LPG from natural gas

After natural gas has been drilled from underground reservoirs of rock, it goes through a refining process where LPG is released as a secondary product.

Although it is sourced from natural gas, LPG has a different chemical makeup and qualities. Chiefly, it is far denser than natural gas. It only requires a small amount of pressure to liquify and does so at a higher temperature than natural gas (37.8C vs -162C). This makes it much easier and safer to transport in gas bottles for homes and businesses.

LPG from crude oil

LPG is extracted from crude oil through a process called cracking. The University of Western Australia explains: “Cracking breaks down heavy, long hydrocarbon molecules from crude oil into lighter, shorter ones such as LPG and gasoline.”

A government report on Australia’s gas supply states that “about 3% of a barrel of crude oil is refined into LPG. Both refined and naturally sourced LPG are interchangeable and can be used in transport or as a domestic, commercial or industrial heating fuel”.

What is the difference between LPG and natural gas?

There are a number of differences between LPG and natural gas. One of the most important differences to note is that natural gas is methane (CH4) and LPG is propane (C3 H8) or butane (C4 H10) (remember in Australia, LPG only contains propane). Another key difference is the way each product is sourced and supplied to customers. While LPG is sourced from natural gas and transported via canisters in liquid form to customers, natural gas is a naturally occurring fossil fuel obtained from underground reservoirs. Unlike LPG, natural gas is transported in its gas form to homes and businesses via an underground network of pipelines known as the gas mains.

Natural gas is generally better suited to power larger home systems such as heating and hot water, as these can be supplied with gas through a connection to the gas mains. LPG on the other hand, is typically better suited to smaller appliances with a specific connection point, such as barbeques or stovetops.

LPG also burns at a higher temperature than natural gas, making it more energy efficient. In other words, LPG uses less gas to produce the same amount of heat as natural gas.

What are the benefits of LPG?

Here are a few advantages of using LPG in your home:

Convenient and efficient: With easy transportation, storage and higher heating levels, LPG is consistent and efficient, particularly when cooking.
Produces less greenhouse gas emissions: As LPG is a low-carbon fossil fuel, it produces less greenhouse gas emissions than other gas sources.
Easily accessible: Due to its transportation via cylinders, remote and rural communities that may not be connected to the gas mains can still access a gas source with LPG.
Cheaper to run: In some cases, it may be cheaper to use LPG over natural gas as customers only need to pay for a refill when they need it.

Is LPG a renewable energy source?

While it is classified as a lower-carbon fuel source, LPG is not a renewable energy source as it is produced as a by-product of fossil fuels. A 2014 study by researchers in the United Kingdom discovered a way to produce propane via a renewable process. However, this technique has not yet been employed on a mass scale.

LPG use in Australia

Around two million Aussie households use LPG indoors, while 18.1 million gas and LPG appliances, including barbeques, are in use across Australia, according to Gas Energy Australia.

Household energy

LPG is a common form of household energy in Australia. Items such as ovens, stovetops, barbeques, heaters and hot water systems are generally compatible with an LPG connection in Australia. Part of LPG’s popularity comes from its affordability and accessibility, particularly in rural areas, where it can be stored in cylinder tanks outside the home and refilled when needed.

Industrial heating and power generation

LPG can be used for a range of industrial uses in Australia, from simple heating to gas engines in forklifts and to power industrial boilers. Because of its high heat levels and efficiency, LPG is used by many businesses in Australia that require a consistent, high-quality energy source. Gas Energy Australia reports that LPG contributes more than $3.5 billion a year to the national economy. Some companies may also use LPG as a back-up or off-grid energy source as a supplement for renewable energy.

Which companies supply LPG in Australia?

Here are some of the larger companies that offer LPG in Australia:

Keep in mind there may be other LPG suppliers operating in your area and some of these companies above may not operate in all regions of Australia.

How often do you need to replace LPG?

Replacing your LPG cylinder will generally come down to personal factors, such as, how big your gas tank is and how often you use it. Some companies offer cylinder refills when levels are running low, while others will simply replace the cylinder with a new one. If you’re not regularly using LPG, you can choose to purchase as you go, or for those with higher gas usage needs, your provider may be able to determine a refill cycle based on past consumption habits.

Is LPG cheaper than natural gas?

Natural gas generally works out cheaper per megajoule (MJ) than LPG. That being said, LPG does work out to be cheaper than natural gas for households with smaller gas usage requirements. This is because natural gas has an additional cost known as a daily supply charge, usually costing between 40 and 60 cents. Customers must pay supply charges even if they don’t use any gas as a fee for being connected to the distribution network. Delivering LPG may also incur a service cost, which can become pricey if households burn through their supply quickly. If you need help determining which gas will be better suited to your needs, visit our natural gas v LPG page for more information.

If you’re interested in comparing natural gas prices in your area, see some of the cheapest options available per state below:

NSW VIC QLD SA WA

Here are some of the cheapest gas deals on our database for NSW. These estimated annual costs are based on the Jemena Gas Network in Sydney and yearly gas usage of 18,800 MJ/year, but prices will vary depending on your own circumstances. We show one product per retailer, listed in order of lowest estimated cost. These are products from referral partners†. Our database may not cover all deals in your area, and please check retailer websites for up to date information.

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Distributed By Jemena Gas

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