Natural gas: Characteristics
Sold by heat, not volume, and why ethane pays extra
What this tab covers The supply and physical characteristics of the commodity. Supply: current production, inventories and stocks, capacity utilisation, geographic and producer concentration, how fast supply responds to price, the project pipeline and capital spending, and logistics and export flows. Material: the physical and chemical properties that set its grade, price and end uses (for example purity and conductivity for metals, API gravity, sulfur and energy content for fuels, moisture, protein and fibre quality for crops).Supply volume characteristics
| Characteristic | Figure | What it means | Source |
|---|---|---|---|
| Current production volume | about 4,124 bcm (2024) | The US produced about a quarter and Russia 15%. Qatar's Ras Laffan LNG complex was shut by attacks from 2 March 2026 and only partly restarted by mid-2026. | Energy Institute Statistical Review 2025; LNG Prime; Rabobank 2026 |
| Inventory and stock levels | EU storage must be 90% full before winter; EU storage capacity about 100 bcm, roughly a quarter to a third of annual EU use (indicative); India has no strategic gas storage | Gas is costly to store, so stocks follow the season: filled in summer, drawn in winter. India relies on LNG cargoes and contract flexibility instead, which left it exposed when Qatari supply stopped in 2026. | EU Gas Storage Regulation; GIE AGSI (indicative); Energy Institute 2025; this tile's lessons |
| Capacity utilisation | LNG liquefaction about 83% before 2026 (about 411 Mt traded against about 495 Mt/yr capacity, 2024, indicative) | Qatar's 77 Mt/yr of capacity, about 15% of the world's, went offline in March 2026, so effective world utilisation dropped and spot LNG prices jumped. Many regasification terminals run well below capacity, often under half (indicative). | IGU World LNG Report 2025 (indicative); QatarEnergy; this tile's lessons |
| Geographic and producer concentration | US 25.5%, top-3 (US, Russia, Iran) 47.2%, HHI 1,057 (production); LNG exports: Qatar 30.5%, Australia 23.9%, US 15.5% of value | Production is moderately concentrated, but traded LNG is concentrated in three suppliers. QatarEnergy and Cheniere are the largest LNG sellers; Petronet holds 8.5 Mt/yr of long-term Qatari contracts for India. | World Mining Data 2026; UN Comtrade 2024; company reports |
| Supply elasticity | short run: low (storage and fuel switching only); long run: 4-5 years from LNG investment decision to first cargo | US shale gas wells respond within a year, but export capacity is fixed by liquefaction plants. LNG supply comes in waves after clusters of investment decisions. | this tile's lessons; IGU (indicative) |
| Project pipeline and CapEx | about 300 bcm/yr of new LNG capacity due by 2030, about half from the US and a quarter from Qatar (IEA, indicative) | Named projects: Qatar North Field East (32 Mt/yr, from 2026), Golden Pass in Texas (about 18 Mt/yr), Plaquemines LNG in Louisiana (about 27 Mt/yr peak) and Corpus Christi Stage 3 (above 10 Mt/yr). In India, new regasification terminals and the national gas grid are expanding. | IEA Gas Market Report 2025 (indicative); company announcements (indicative) |
| Logistics and export flows | LNG trade about 544 bcm, about 13% of output; pipeline trade roughly 450 bcm (indicative); about one fifth of LNG passed Hormuz before 2026 (indicative) | LNG ships carry about 170,000 m3 each. Chokepoints are Hormuz, Bab el-Mandeb with Suez, and the Panama Canal. Pipeline gas locks buyer and seller together: Russian flows to Europe fell from 191 bcm in 2019 to 51 bcm in 2024. | Energy Institute 2025; UN Comtrade 2024; this tile's lessons |
Material characteristics Energy commodity
Natural gas is mostly methane, sold by energy content rather than volume. What matters commercially is heating value, the interchangeability of gas from different sources (Wobbe index), and the removal of water, CO2, hydrogen sulphide and heavier liquids before transport. Liquids such as ethane and LPG can earn more than the gas itself.
| Property | Value / specification | Why it matters | Source |
|---|---|---|---|
| Heating value | about 37-40 MJ/m3 (gross); 1 million Btu = 1.055 GJ; 1 bcm is about 36 PJ | Gas is priced per million Btu, so heating value turns volume into money | Energy Institute conversion factors; ISO 6976 |
| Wobbe index | about 47-54 MJ/m3 in most European specifications (indicative) | Burners only work within a Wobbe range, so LNG and pipeline gas must match it | EN 16726 (indicative) |
| Methane and heavier hydrocarbons | pipeline gas typically 85-95% methane; rich gas contains ethane, propane and butane | Liquids are stripped and sold separately; rich gas needs processing before export | Industry practice (indicative) |
| Impurities | hydrogen sulphide below about 4-5 ppm; CO2 usually below 2-3% in pipeline specifications | Sour gas corrodes pipes and is toxic, so it must be treated | US interstate tariffs (0.25 grain/100 scf) (indicative) |
| LNG density and expansion | about 450 kg/m3 at minus 162 C; 1 t LNG is about 1,360 m3 of gas or about 52 million Btu | Sets cargo sizes and the conversion of tonnes to energy | IGU (indicative) |
| Water dew point | pipeline gas must be dried to avoid hydrates and corrosion | Wet gas cannot be transported safely at high pressure | Industry practice (indicative) |