Natural gas & LNG: Energy sources and raw materials for industry

Together with crude oil and coal (lignite and hard coal), natural gas still forms the basis of the global energy supply. Currently, the three energy sources contribute around 77 percent to meeting primary energy consumption (source: Federal Environment Agency, as of 2021).

For the federal government, the use of natural gas has long been a "flexible bridging technology in the transition to renewable energy supply." This is because natural gas has the lowest specific CO₂ emissions of all fossil fuels. Until Vladimir Putin invaded Ukraine. It quickly became clear: the focus on the "bridging technology" in the 2010s led to a fatal dependency. However, for many companies, there is no way around it; they rely on natural gas. But what needs to be considered? And could LNG be an alternative?

L-gas and H-gas

Natural gas is divided into two categories: L-gas and H-gas. L-gas (low caloric gas) has a methane content of 80.1 to 87 percent by volume, while H-gas (high caloric gas) is over 87 percent by volume. Generally, L-gas is cheaper but also has a lower calorific value. L-gas mainly comes from German and Dutch deposits. However, production has been declining for years. Switching from L-gas to H-gas is not quite so trivial, as heating systems and gas stoves need to be converted.

Natural gas is considered a secure resource, as annual production of around 3.8 trillion cubic metres is offset by reserves of about 200 trillion cubic metres. In 2024, Germany consumed around 78.6 billion cubic metres of natural gas (source: BP Statistical Review of World Energy). This makes us the world's natural gas consumer - mainly for heat generation. German companies cover 90 per cent of the demand through imports.

Norway: 50 per centNetherlands, Belgium, France, Denmark: approx. 33 per cent

Until the Ukraine war in 2022, Germany was the largest purchaser of Russian natural gas in Europe.

USA ahead of Russia in natural gas production

Since 2009, the USA has been at the forefront of natural gas-producing countries. This is mainly because deposits such as shale gas and tight gas are also exploited there - thanks in part to the controversial fracking technology. In fracking, water, sand, and chemicals are pressed into rock, releasing gas and oil. In 2020, this resulted in 914.6 billion cubic metres.

Russia follows in second place with 638.5 billion cubic metres, followed by Iran (250.8 billion) and China (194 billion). But Qatar (171.3 billion), Canada (165.2 billion), and Australia (142.5 billion) are also among the world's largest natural gas producers.

Unconventional natural gas

“Conventional” natural gas refers to the natural gas that is found in coarse-grained reservoirs beneath an impermeable layer. Usually in so-called gas traps.

In contrast, there are “unconventional” natural gas deposits: shale gas and tight gas. These are found in non-gas-permeable rock. Tight gas is similar in some respects to shale gas, but the difference is that shale gas is still in its source rock, while tight gas has migrated into the rock from below in earlier times.

Therefore, tight gas is referred to as secondary deposits, while shale gas is referred to as primary deposits. In addition, the gas permeability of the rock is somewhat higher in tight gas. It is often dense sandstones and carbonates, while shale gas occurs in clay stones.

LNG - liquefied natural gas

Germany imports its natural gas exclusively in gaseous form via pipelines. Another option is to liquefy natural gas (LNG - liquefied natural gas) and transport it by ship. In doing so, the raw material is cooled to minus 160 degrees, which makes LNG more expensive.

Worldwide, trade in LNG increased by almost 10 percent in 2017 and now accounts for about one-third of global natural gas trade. The largest purchasing countries for LNG are Japan (116 billion m3), China (54 billion m3), and South Korea (52 billion m3).

However, tankers with liquefied natural gas can only dock at special terminals. Germany does not yet have any of these, but they are in planning.

Difference between LNG, LPG, and CNG

LNG (Liquefied Natural Gas) is liquefied natural gas, which is natural gas cooled to minus 160 degrees.

LPG (Liquefied Petroleum Gas) refers to a liquefied mixture of propane and butane and is a refinery product that arises during crude oil distillation.

CNG (Compressed Natural Gas) is compressed and dried natural gas. It is used as fuel for natural gas-powered vehicles. The energy content of 1 kg of CNG corresponds to about 1.3 litres of diesel or 1.5 litres of petrol.

Who uses natural gas for what purpose?

In Germany, natural gas is primarily used for the production of heat and hot water. Gas is the most commonly used energy source in this country when it comes to heating. Heat and cold generation account for almost half of the energy consumed in Germany. According to the industry association BDEW, around half of all residents of flats in Germany still heat with gas. However, natural gas is also used for electricity generation and as a fuel for transport. In the first quarter of 2023, 14.6 percent of the electricity consumed in Germany was generated from natural gas.

31 percent of the energy used by industry is natural gas. It is therefore the most important raw material for industry, for example to produce plastics, fertilisers or adhesives. Almost 70 percent of industrial energy is used for process heat in specialised processes, such as melting, annealing, hardening, forming, drying and baking. This mainly affects the metal, cement, glass, ceramics, food and textile industries.