Butane is a gaseous component of natural gas in the same manner as gasoline is a component of crude oil.

While petroleum products like gasoline are refined, natural gas products like butane are extracted. Butane can also be produced from crude oil, but in much smaller quantities.

Normal butane is a hydrocarbon obtained from natural gas or by refining petroleum. It can be liquefied at room temperature by compression.

There are two structural isomers of butane: In normal butane, or n-butane, the four carbon atoms are joined in a continuous, unbranched chain; in isobutane (or 2-methylpropane) three of the carbon atoms are joined to the fourth by single bonds, resulting in a branched structure.

The two isomers differ in certain chemical and physical properties. For example, liquid n-butane has a higher boiling point (-0.6°C) at atmospheric pressure than that of liquid iso-butane (-10.2°C).

Iso-butane meanwhile, is a hydrocarbon obtained from natural gas or by refining petroleum that is used in refinery alkylation.

Butane is one of dozens of gases derived from raw natural gas. It is often combined with propane to form LPG. This is the bottled gas sold for use in camping stoves and outdoor gas-powered grills.

Propane may deliver more energy than butane, but butane’s property makes it ideal for containment. When butane is compressed, it becomes a liquid very quickly. Once it is released into the air, it reacts with an ignition source to become a highly flammable gas.

While butane and propane are different chemical compounds, their properties are similar enough to be useful in mixtures. Butane and propane are both saturated hydrocarbons and do not react with each other. Butane is less volatile, while propane is more volatile and boils at -42°C.

The latter is also used as a petrol component, as a feedstock for the production of base petrochemicals in steam cracking, as fuel for cigarette lighters and as a propellant in aerosol sprays such as deodorants. Very pure forms of butane, especially iso-butane, can be used as refrigerants and have largely replaced the ozone layer-depleting halomethanes, for instance in household refrigerators and freezers.

Conventional n-Butane is used in calibration gas mixtures for the petrochemical industry; used in environmental emission monitoring, industrial hygiene monitors and trace impurity analysers.

Supply and demand
The global butanes business is operated by oil and natural gas companies from the public and private sectors. For most regions of the world, information on butanes is usually included as part of statistics on the entire liquefied petroleum gas (LPG) stream.

LPG consumption is forecast to grow at an average annual rate of 2.5% per year in the next five years. This growth will be largely due to increased commercial and residential use throughout the world, as well as increased usage in the Middle East-Asia region as a petrochemical feedstock.

In terms of global supply, natural gas processing continues to be the largest supply source of LPG, accounting for close to 55% of total worldwide production in 2008.

Refineries accounted for the remaining world production of LPG. In the next few years, LPG will also be recovered from LNG and growth in LNG facilities around the world will subsequently increase LPG production.

Butane prices reached their highest levels ever in mid 2008, because of high LPG prices resulting from high crude oil and natural gas prices. A considerable drop in butane prices was experienced in the last two months of 2008 and for a few months in early 2009, due to the fall in crude oil prices at the hands of the global recession.

Future butane prices will fluctuate according to the rise or fall of crude oil prices, as well as natural gas competition.

China is currently the largest LPG producer and consumer in Asia. All LPG production in China is from the domestic refinery sector, where existing refineries have been expanded and new refineries are being built to accommodate the expanding economy and demand for fuels.

LPG production in China is expected to grow by around 6% per year from 2010 to 2014.