Natural gas: Extraction

Why deep, hot basins hold gas rather than oil

Natural gas is mostly methane. It forms like oil but at higher temperatures, so deep basins tend to be gassier. It occurs on its own, alongside oil as associated gas, or locked in shale and tight sands that need horizontal wells and fracturing. Raw gas is processed to strip water, CO2, hydrogen sulphide and heavier liquids such as ethane, propane and butane, which are sold separately. Some fields also yield helium. For the same energy, gas fills about 1,000 times the volume of oil, so moving it is the central problem (Geman). Where no pipeline exists, associated gas is often flared.

Gas reaches buyers by two linked routes. First it must be produced: from conventional onshore and offshore reservoirs, as a by-product of oil wells, from shale rock with horizontal drilling and fracking, or in small amounts from coal seams. Then it must be moved. Pipelines are cheapest over land and moderate distances but lock buyer and seller together. Liquefaction turns gas into LNG that can cross oceans to any terminal, at a cost of several dollars per million Btu. This transport cost is why gas, unlike oil, still has distinct regional prices in North America, Europe and Asia.

Methods compared

How each method works

Wells drilled into gas reservoirs flow under their own pressure, often for decades. Large fields feed pipelines or LNG plants. Russia's West Siberian fields, Iran's South Pars, Qatar's North Field and Norway's Troll are examples; India's KG-D6 and ONGC's western offshore fields are smaller ones.

Large, cheap, long-lived supply; remote fields need costly pipelines or LNG plants.

Gas comes up with crude and is separated at the wellhead. It is processed and sold, reinjected to hold reservoir pressure, or flared where there is no outlet. US Permian shale oil wells are now a major source of US gas.

Cheap but its volume follows oil drilling, not gas demand; flaring wastes gas and emits CO2.

As with shale oil, long horizontal wells are fracked in stages. The Marcellus and Haynesville basins turned the US from an LNG importer into the largest producer and exporter. Wells decline fast so drilling must continue.

Flexible, fast supply that keeps US gas cheap; fracking is restricted or banned in parts of Europe.

Pre-treated gas is cooled in trains of 4-8 Mt a year each. Ships carry it to regasification terminals, many of them floating units. Contracts run 15-25 years, so the plant can be financed before it is built.

Lets any coastal country import gas, but adds several dollars per mmbtu and exposes buyers to chokepoints such as Hormuz.

Gas held in coal seams is released by pumping out water. Queensland's CBM feeds the Gladstone LNG plants; India has small CBM fields in Raniganj and Jharia.

Uses existing coal basins; large water volumes and many wells needed.

Who does it: global

Who does it: India

India produced 32.4 bcm and consumed 70.3 bcm in 2024, importing 37.9 bcm as LNG (Energy Institute 2025). Qatar supplied nearly 40% of India's LNG, so the March 2026 Ras Laffan shutdown forced Petronet to declare force majeure and threatened supply cuts of up to 40% to industrial and city gas users (Business Today, March 2026).