Question

Describe how the commodity, Natural Gas, is created, grown, mined, etc. Including details about commodity supply chain.

Answer 1

Ans -  A commodity is a basic good or raw material in commerce that individuals or institutions buy and sell. Commodities are often the building blocks for more complex goods and services.

Natural Gas-

Natural gas can come from exclusive deposits of natural gas, or it is also often present wherever there are natural deposits of oil. However, mines that contain only natural gas are much more beneficial as they tend to have a longer lasting supply of the product.Natural gas is mined much in the same way that oil is. First a large piece of drilling equipment is used to drill through the soil and rocks to reach the natural gas deposit. According to the Natural Gas Website, there are two different kinds of natural gas deposits, deep and conventional. While conventional gas is usually closer the surface and easily accessible by conventional drill bits, most deep gas deposits are located deep within the earth's surface. Some of these deposits can range as far as 15,000 feet into the ground. This makes most deep gas deposits more expensive on the market due to the extra work needed to gain access to the deposit.

Trade agreements are almost always followed by supply chains for delivering subject of trade physical flows of natural gas. Flows through natural gas supply chain are using either pipelines or LNG (Liquefied Natural Gas) transport form of transportation and warehousing. Supply chain of natural gas is complex and important part of natural gas sector. Just transmission and distribution of natural gas to final consumers, accounts for more than 30 percent of natural gas price . Huge distances, many supply chain members, different technological, logistical and economical processes, complex law and professional regulations in different countries on the way to final consumer contribute to complexity and potential risks in natural gas supply chains. To mitigate complexity, to clarify position and processes, and to ensure maximum possible optimization of natural gas supply chain, practitioners and scientist use mapping method in creating a picture of natural gas supply chain.