Propane Production and Distribution

Propane is a by-product of natural gas processing and crude oil refining, with almost equal amounts of production derived from each of these sources. Most of the propane consumed in the United States is produced in North America. In addition to conventional propane, renewable propane—which is produced from renewable feedstocks—is also being explored.


Propane is produced from liquid components recovered during natural gas processing. These components include ethane, methane, propane, and butane, as well as heavier hydrocarbons. Propane and butane, along with other gases, are also produced during crude oil refining.

Chemically identical to conventional propane, renewable propane is produced from biomass-based feedstocks, including used cooking oil, animal fats, or 20% dimethyl ether. Although the number of producers is small, renewable propane is currently produced in biodiesel refineries.


Propane is shipped from its point of production to bulk distribution terminals via pipeline, railroad, barge, truck, or tanker ship. Propane marketers fill trucks at the terminals and distribute propane to end users, including retail fuel sites.

Find propane fueling station locations.

U.S. Energy Information Administration schematic of propane distribution showing propane originating from three sources: 1) gas well and gas plant, 2) oil well and refinery, 3) imports. Propane from each of these three sources then moves to underground storage, pipeline station, pipeline terminal, transport (10,000 gallon tanker truck shown), retail plant (30,000 gallon stationary tank shown), transport via bulk truck (3,000 gallons) or cylinder truck, and finally to the retail customer (shown as a residential home).

Schematic of a typical propane distribution route (Source: EIA)