# Natural Gas Liquids (NGLs)

**Source:** Buckhead Energy Oil & Gas Encyclopedia (https://www.buckheadenergy.com/learn) — canonical: https://www.buckheadenergy.com/natural-gas-liquids

Natural gas liquids (NGLs) are the heavier hydrocarbon components — ethane, propane, butanes, and natural gasoline (pentanes) — that are separated from the raw natural gas stream at a processing plant and sold as distinct, often more valuable products, which is why an owner's royalty check on a wet-gas well frequently lists NGLs as a separate line from residue gas.

## The valuable liquids inside the gas
Raw natural gas coming out of many wells is "wet" — it carries heavier hydrocarbons mixed in with the methane. At a gas processing plant, those heavier components are separated out as natural gas liquids: ethane, propane, butanes, and natural gasoline. What is left, mostly methane, is the "residue" or "dry" gas that goes into the pipeline.
NGLs matter because they are often worth more per unit of energy than the residue gas, and they feed petrochemicals, heating (propane), and fuels. A wet-gas well can earn a meaningful share of its value from NGLs rather than from gas alone.

## Why NGLs appear on your royalty check
If your minerals produce wet gas, your royalty check will often show separate lines for residue gas and for NGLs (sometimes broken into individual products), each with its own volume and price. That is normal — you are being paid on both the dry gas and the liquids extracted from your gas.
It also means post-production costs can appear, because processing gas to extract NGLs has a cost that some leases pass through. Understanding that your gas was processed into residue plus NGLs explains both the extra revenue lines and any processing deductions.

## How NGLs are priced
NGL prices track their own markets — propane and butane have seasonal heating demand, ethane tracks petrochemical demand, and a common benchmark point is Mont Belvieu, Texas. NGL value is often quoted as a percentage of crude oil. Because each component prices differently, the blended NGL price on your check reflects the mix your gas yields and where it is processed and sold.
This is why two gas wells can pay quite differently: a well producing richer gas (more NGLs) can be worth more than a dry-gas well at the same gas volume.

## What it means for owners
For a mineral owner, NGLs are usually a plus — extra product value from the same well — but they come with processing arrangements and, on some leases, processing deductions. When valuing minerals over wet-gas wells, the NGL yield is part of the income, so it is worth knowing whether your production is wet or dry.
Buckhead Energy accounts for NGL yield and processing terms when valuing minerals over gas wells. This page is educational information, not financial advice.

## Frequently asked questions

**What are natural gas liquids (NGLs)?**
The heavier hydrocarbon components — ethane, propane, butanes, and natural gasoline — separated from raw natural gas at a processing plant and sold as distinct products. What remains, mostly methane, is the residue or dry gas that goes to the pipeline.

**Why are NGLs on my royalty check?**
Because if your minerals produce wet gas, you are paid on both the residue gas and the liquids extracted from it. Your check often shows separate lines for gas and NGLs, each with its own volume and price. Processing to extract NGLs can also bring post-production deductions on some leases.

**Are NGLs worth more than natural gas?**
Often, per unit of energy, yes. NGLs feed petrochemicals, heating, and fuels and frequently command more than residue gas. A well producing richer (wetter) gas can be worth more than a dry-gas well at the same gas volume because of the NGL value.

**How are NGLs priced?**
Each component trades in its own market — propane and butane have seasonal heating demand, ethane tracks petrochemicals — with a common benchmark at Mont Belvieu, Texas. NGL value is often quoted as a percentage of crude oil, and the blended price reflects your gas's mix and where it is processed.

**Do NGLs increase what my minerals are worth?**
Usually — NGLs add product value from the same well. They come with processing arrangements and sometimes processing deductions, so when valuing wet-gas minerals the NGL yield is part of the income. Knowing whether your production is wet or dry matters.

## Related terms
- [How to Read Your Royalty Check](https://www.buckheadenergy.com/how-to-read-your-royalty-check)
- [Post-Production Costs](https://www.buckheadenergy.com/post-production-costs)
- [Natural Gas](https://www.buckheadenergy.com/natural-gas)
- [Oil and Gas Royalties](https://www.buckheadenergy.com/oil-and-gas-royalties)
- [Oil & Gas Encyclopedia — all terms](https://www.buckheadenergy.com/learn)

_Educational information only, not legal or tax advice. Buckhead Energy is a direct buyer of oil & gas mineral and royalty interests._