LNG vs Propane for Industrial Fuel
Propane stores easily at ambient temperature under modest pressure, making it the simple choice for small and intermittent loads. LNG requires cryogenic handling but delivers natural gas, which emits about 117 pounds of CO2 per million Btu versus about 139 for propane per EIA coefficients, and has generally cost less per unit of energy. For large continuous demand, LNG usually wins on both cost and emissions.
Which is cheaper, and how to work it out for your site
Propane holds more energy per gallon than LNG. Propane carries 91,420 Btu per gallon at higher heating value. LNG is measured by weight at 23,726 Btu per pound and weighs roughly three and a half pounds per gallon, which works out near 83,000 Btu per gallon. So propane carries about ten per cent more energy in the same volume, and a delivery of either fills a broadly similar trailer.
That means the comparison is not settled by logistics. It is settled by the price of the molecule and by how much of it a site burns.
The molecule. LNG is natural gas, so its price follows natural gas. Propane follows the NGL barrel, which moves with crude oil and petrochemical demand. The two do not track each other. Per million Btu delivered, natural gas has historically been the cheaper energy, which is the structural reason LNG tends to win once volume is high enough.
The volume. Delivered LNG carries a fixed cost that propane does not: cryogenic storage and a vaporizer on site. Spread over a small annual load, that equipment dominates the delivered price. Spread over a large one, it disappears into it. Propane storage is a pressure vessel, simpler and cheaper, so propane starts lower and stays flat.
The practical result is a crossover. Below it propane is cheaper. Above it LNG is cheaper. Where the crossover sits depends on three things and nothing else:
- Annual consumption in million Btu, and whether load is continuous or intermittent.
- Distance from the nearest supply point, which sets the transport share of delivered cost.
- Whether the site pays for the storage and regasification equipment or buys delivered gas with the equipment included in the price.
The third one changes the answer more than people expect. Where the equipment is provided as part of the supply arrangement, the capital cost disappears from the comparison and reappears inside the delivered price per million Btu, which is a different and usually better shape for a site that does not want the asset on its books.
How to compare two quotes properly. Convert both to dollars per million Btu before comparing. Propane at a given price per gallon is that price divided by 0.09142. LNG at a given price per gallon is that price divided by 0.083. Comparing price per gallon directly will mislead you by about ten per cent in propane's favour, every time.
Figures from the Alternative Fuels Data Center fuel properties table, US Department of Energy.
Storage and handling
Propane liquefies under pressure alone, so tanks are cheap and unmonitored sites are common. LNG needs vacuum insulated cryogenic tanks and boil off management, which providers supply as a leased service. Below roughly a few hundred gallons per day of equivalent demand, propane's simplicity usually prevails; above it, LNG logistics scale better.
Cost and emissions
Propane prices track natural gas liquids and crude markets, and per unit of energy propane has generally cost more than natural gas in U.S. markets. On emissions, EIA coefficients put propane at about 139 pounds of CO2 per million Btu against about 117 for natural gas, roughly 16 percent higher. Large propane users converting to LNG typically cut both fuel spend and reported emissions.
Which is cheaper for an off-grid facility?
Propane is usually cheaper at lower or intermittent consumption, because it avoids the cost of cryogenic storage and regasification. LNG usually wins at high continuous consumption, because natural gas has historically been the cheaper molecule per million Btu and the equipment cost spreads across more energy.
Equipment compatibility
Many burners and engines are convertible between propane and natural gas with orifice and control changes, since both are gaseous fuels at the burner tip. Facilities planning an eventual pipeline connection often prefer LNG because no second conversion is needed when pipeline gas arrives.
VP Ventures supplies both delivered LNG programs and wholesale propane, so it can price either side of this comparison for a specific site and load.
Frequently asked questions
When is propane the better choice?
Small, intermittent, or widely scattered loads where cheap ambient storage outweighs the higher fuel cost per unit of energy.
When does LNG beat propane?
Large continuous loads, sites planning a future pipeline connection, and users targeting lower fuel cost and CO2 per unit of energy.
Can equipment switch between propane and natural gas?
Usually yes with burner modifications, since both burn as gases. Confirm with the equipment manufacturer.
Which has lower emissions?
Natural gas, at about 117 pounds of CO2 per million Btu versus about 139 for propane, per EIA.
Is LNG or propane cheaper for an off-grid facility?
No. Propane is usually cheaper at lower or intermittent consumption, because it avoids the cost of cryogenic storage and regasification. LNG usually wins at high continuous consumption, because natural gas has historically been the cheaper molecule per million Btu and the equipment cost spreads across more energy.
What changes the answer?
Consumption volume, distance from supply, and whether the storage equipment is bought or provided as part of the supply.
Is LNG always cheaper than propane?
No. Propane is usually cheaper at lower or intermittent consumption, because it avoids the cost of cryogenic storage and regasification. LNG usually wins at high continuous consumption, because natural gas has historically been the cheaper molecule per million Btu and the equipment cost spreads across more energy.
Does propane or LNG hold more energy per gallon?
Propane, by about ten per cent. Propane holds 91,420 Btu per gallon and LNG about 83,000. Energy density is not the reason to choose LNG.
How do I compare an LNG quote to a propane quote?
Convert both to dollars per million Btu. Comparing price per gallon will overstate propane's advantage by roughly ten per cent.