Natural gas and electricity fundamentals

Learn the essentials about the characteristics and value chain of natural gas and electricity.

Natural gas

Natural gas will play a key role in the transition to a lower carbon economy, constituting a natural alternative to coal and acting as a back-up to the intermittent nature of electricity generation.

What is natural gas?

Natural gas is a mixture of light hydrocarbons found underground, in which the percentage of methane is over 70% by volume.


Natural gas is found underground, in accumulations in porous rocks, isolated from the outside by impermeable rocks. It is the result of the degradation of organic matter in an anaerobic way, originating from extraordinary quantities of micro-organisms; organic matter that degraded away from contact with air, at high temperatures and under strong pressures.


The composition of natural gas can vary depending on the field in which the gas is produced, the production process, conditioning, processing and transportation.

Generally, it has a density less than 1 (lighter than air) and a high calorific value between 8,000 and 10,000 kcal/m³, depending on the heavy content, in particular ethane and propane, and inert materials, such as nitrogen and carbon dioxide.

Value chain

To reach end customers, natural gas passes through a complex set of processes and activities, which vary depending on the distance and transportation resources available.

Natural gas is transported through a gas pipeline and, for longer distances, by means of LNG vessels. Transportation by sea requires the gas to be subjected to a cooling process (-160°C) to maintain the liquid state (liquefied natural gas) at a pressure slightly higher than atmospheric pressure.

At the destination terminals, the gas is transformed once again to the gaseous state so that it can be injected into the distribution network.

Learn more about our sources of supply

The existence of a high-pressure gas pipeline connection near the processing and distribution sites is the most important factor in configuring the natural gas value chain.

In the proximity of consumption sites, natural gas is distributed through a complex network thousands of kilometres long that covers the main areas of consumption, i.e. industrial and residential customers.

Learn more about the regulated distribution infrastructures management activity.


Worldwide energy consumption is undergoing a process of electrification, supported by the transition to digital technology in recent years. At the same time, the renewable energy industry has developed, and its competitiveness with fossil fuels has been increasing, supported not only by cost reductions but also by public policies to meet environmental targets.

What is electricity?

Electricity is the set of physical phenomena associated with the presence and flow of electrical charge, which includes lightning, static electricity and electric currents.

Electrical energy results from the existence of negative electrical charges (electrons) which, when in contact with an electric conductor, form an electric current due to the potential difference between its ends.

Electricity can be produced using different energy sources:

  • Renewable origin: Solar, wind, hydraulic and geothermal.
  • Fossil fuels; Coal, oil or gas.


Value chain

The value chain in the electricity sector integrates production, transportation, distribution, sales and marketing, and the consumption of electrical energy.

The National Transmission Network (NTR) in Portugal is operated under an exclusive concession regime assigned by the Portuguese State, and is currently granted to Redes Energéticas Nacionais (REN).

Production is operated in a competitive context, and is divided into ordinary and special regimes.

Distribution is by means of the National Distribution Network, constituted by high, medium and low pressure infrastructures. These are operated under concession agreements between municipalities and distributors.

Electricity retailers buy and sell electricity freely in the market, and have access to the transmission and distribution networks through the payment of tariffs established by the ERSE regulator. Galp’s is present in this latter part of the value chain through its electricity supply activity. Get to know more about it.