Natural gas is a fossil fuel formed from plants, animals, and microorganisms that lived millions of years ago. It is formed underground, under intense heat and pressure which causes the carbon bonds in the organic matter to break down into methane.

Conventional natural gas is found within large cracks and spaces between layers of overlying rock. Shale gas is found where natural gas occurs in the tiny pores within some formations of shale, sandstone, and other types of sedimentary rock. Associated natural gas occurs with deposits of crude oil.

Geologists identify likely formations via seismic surveys. If the site displays potential an exploratory well is drilled. Results from the test well determines if the formation is commercially viable and if so one or more production wells are drilled horizontally or vertically. In conventional deposits, the natural gas generally flows easily up through wells to the surface and is captured on site.

Natural gas is most commonly extracted by drilling vertically from the Earth’s surface. In such cases the well is limited to the gas reserves it encounters. Horizontal wells may improve production and generally have less environmental impact. Hydraulic fracturing uses processes to further expand the amount of gas that a well can access. However this practice can have negative environmental consequences.

Wet natural gas that comes directly from the well is sent to processing plants and processed to separate natural gas liquids (NGLs) and other impurities. Dry, consumer-grade, or pipeline quality natural gas is then usually sent through pipelines to underground storage fields or to distribution facilities for final consumption.

After natural gas is extracted, it is most frequently transported through pipelines (from 2 to 60 inches in diameter) from production fields to markets. When natural gas arrives at locations where it will be used, it flows into smaller diameter mains pipes and then into smaller service lines that go directly to homes or buildings.

Natural gas is stored in large volumes in underground facilities and in smaller volumes in tanks above or below ground. Most underground storage is in depleted natural gas or oil fields close to consumption areas. Alternatives are Salt cavern storage facilities and Water aquifers.

Methane gas is processed into LNG by cooling it to −161°C, at which point it becomes a liquid. This reduces the volume of the natural gas by a factor of more than 600. The reduced volume facilitates economical transport by sea or road to places that do not have pipelines.