What is natural gas?

In this Canstar Blue guide, we explain how natural gas works, what it is most commonly used for in Australia and whether it could benefit your home energy usage.

In this Canstar Blue guide, we explain how natural gas works, what it is most commonly used for in Australia and whether it could benefit your home energy usage.

Natural gas is Australia’s third-largest energy resource and export, after coal and oil. Due to its abundance and excellent cost and energy efficiencies, it’s a popular source of fuel for Australian homes and business. But as with any energy source, it pays to understand how it works and whether it’s the most cost-effective choice for your household before signing up to a plan with a gas provider.

To help you get your head around this topic, Canstar Blue breaks down everything you need to know about natural gas in Australia.

What is natural gas and what’s it used for?

Natural gas is an odourless, colourless fossil fuel energy source. It mainly consists of methane with varying levels of combustible hydrocarbon gases. Natural gas is Australia’s third largest energy source, after coal and uranium, and is commonly used to power household heating and cooking appliances, as well as for electricity generation at power stations and for fueling manufacturing.

How is natural gas sourced?

Natural gas is sourced from gas fields, which house either oil and gas wells or coal seam gas wells. Australia is home to a number of onshore or offshore gas wells, with each one drilled by companies that then on-sell natural gas to the Australian market or export it overseas. Natural gas is accessed by drilling into underground reservoirs of rock, within which the gas has naturally formed. It is then extracted and sent to homes and businesses via Australia’s vast gas pipeline network.

What is the difference between natural gas and LPG?

One of the key differences between natural gas and liquefied petroleum gas (LPG) is the way they are supplied to customers. Natural gas is typically sent to customers via underground pipelines, while LPG is delivered via gas cylinders – the kind you hook up to your barbecue or connect at the side of your house.

The reason for this difference is due to the different chemical makeup of natural gas and LPG. In Australia, LPG is a propane gas (in other countries it also contains butane) and is a by-product that is extracted from fossil fuels through a refining process. LPG needs to be safely pressurised into liquid form before being transported in cylinders to businesses and homes.

Natural gas, on the other hand, is much more stable, making it lighter and safe to transport through pipelines across the country.

Natural gas is well suited to power factories, industrial machinery and large homes, while LPG is best suited to small household appliances, such as barbecues and stoves, that don’t require a constant source of energy.

What are the benefits of natural gas?

There are a few notable advantages of using natural gas. These are:

Reduced carbon emissions: Natural gas power plants emit about half as much carbon dioxide (CO2) into the atmosphere as coal-fired power plants.
‘Cleaner’ fossil fuel: As it’s a natural fuel source and consists mainly of methane, natural gas is generally considered a ‘cleaner’ fossil fuel option. This may explain why gas use in Australia has increased significantly over the last 30 years.
Safer to transport: While other fuel sources, such as LPG, need stabilising treatments before they can be transported, natural gas is stable enough to be delivered to customers as soon as it has been extracted.
Cheaper to produce: Unlike electricity and oil, which increases in price during peak demand periods, gas prices can sometimes decrease in times of demand because gas is easier to distribute in larger quantities.

Natural gas plans in your state

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.

AGL Energy Limited | Value Saver

Distributed By Jemena Gas

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